Health | March 2010 | By Sam Oches

Local vs. Organic

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Jeff Simmons, president of food technology firm Elanco Animal Health and author of the white paper “Food Economics and Consumer Choice,” says that flexibility is key for any chain looking to offer local or organic ingredients.

“From a practical perspective … to fill a global supply chain like some of the large quick-service restaurants, you’re going to need to make sure that it’s managed appropriately and not something that’s mandated [across all units] because it wouldn’t be something that’s practical,” he says.

Both types of ingredients, however, have a number of benefits for customers and quick serves alike. For organic, the USDA regulations assure that the food is produced according to specific guidelines and is better for the earth. Local ingredients are both good for the environment—the food travels a shorter distance, creating a smaller carbon footprint for the restaurant—and infuse dollars into the local economy.

Burgerville’s Graves says that while the brand has in the past thrived on a local supply chain that boosts the local economy, modern customers are becoming more interested in hot-button issues like the environment.

“People are getting more in tune with their carbon footprint and saying, ‘OK, how far did this have to travel before I bought it here at the restaurant?’” he says.

At Eat’n Park, Moore says that the focus on local ingredients is one aspect of a greater goal of the chain: getting involved with the community. “One of the things we look at is giving back to the community,” he says. “Giving back to the community is utilizing the businesses that are within the community.”

Because of the market that burger concepts like Eat’n Park and Burgerville serve, community involvement is something that resonates more than aspects like the food safety or healthy soil benefits in organic ingredients.

“Organic isn’t something that our customers are demanding,” Moore says. “In our eyes, local is more important to our customers at this point. We hear very little about organic. It might just be our segment of business.”

While Burgerville does use some organic ingredients, like cranberries and spinach, Graves says the company doesn’t bother marketing the organic element because it just is not as strong as the local element.

“It’s just not been a top-of-mind priority for us,” Graves says. “We don’t see the value in that at the moment anyway. But we sure do see the value in local, because that means something to people.”

Numbers alone show that even during the recession, organic still had a solid market. A 2009 report from the Organic Trade Association says that 73 percent of U.S. families buy organic ingredients at least occasionally. Also, a recent report from market research firm Mintel shows that 40 percent of respondents have not changed organic purchasing habits during the recession.

At Organixx, which opened in 2009, Putman says the organic ingredients—many of which are sourced from Colorado—are the overwhelming reason why customers choose to eat there.

“One of the things we asked them was, ‘What appealed to you most when you came here? Is it because we’re trying to do local, or is it because of the organic ingredients?’” she says. “I would say 75 percent of our respondents said that it was the organic element more than anything.”

Indeed, because of the higher cost of organic ingredients—which push the average price for sandwiches and salads at Organixx to about $9—the ingredients become the primary selling point of the concept.

“At this point, because of the cost of organic ingredients, it’s purely a marketing-driven concept, that you’re bringing people in the door because of that,” Putman says.

But Simmons says that organic success like that at Organixx purely reflects a niche market. According to data his firm collected for Food Economics and Consumer Choice, 95 percent of people want food to be affordable and nutritious. Only 5 percent want it to be a luxury choice.

“It probably never will get significantly bigger than the 5 percent,” he says. “Be careful that you don’t react to the loud minority voice. Let’s keep things in context. The majority want affordable and, in quick serves’ case convenient, nutritious foods.”

Local ingredients, most believe, are an agreeable middle ground for consumers, who can still get affordable food with a back-story that makes them feel good. “Consumers want to connect with their food,” says Barbara Haumann, senior science writer and editor for the Organic Trade Association.. “They want to hear the story behind their food.”

According to a 2010 Green Shopping Trends report conducted by Mambo Sprouts, 40 percent of natural and organic food customers said they would choose to buy local/nonorganic food over organic/nonlocal food. Thirty-two percent of respondents said they would choose the latter option, and 28 percent weren’t sure.

“There’s a visceral connection to supporting the community and buying in the communal way that people really like,” says Mambo’s Saline.

Although locally sourced foods, as the NRA What’s Hot in 2010 survey suggests, are the top trend for the restaurant industry, organic food was still a $22.9 billion industry in 2008, according to the Organic Trade Association, and is expected to grow by 19 percent by 2013.

The difference between the success of local and organic ingredients today, it seems, might only be education. While customers generally know what they’re getting into with local, they don’t always know with organic.

“People want information to be really easy and easy to understand, they don’t want to have to work too hard for it. If we can figure out how to do that, [organic will] succeed,” Putman says.

The NRA’s Riehle says that with organic ingredients, it is possible to see them become as popular in the future as locally sourced ingredients are today.

“If you think back 20 years, would anybody have dared to forecast that fresh produce would be available as side or dessert items in national quick-service chains? The answer is probably not,” he says.

“So if you think about 20 years in the future, is it possible that there will be organic items at nation quick-service chains, not only nationally but internationally? I think the answer to that would have to be yes.”

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