Irvine, Ca – “The apparent recession doesn’t seem to have affected consumer interest in organic foods, leading to the clear conclusion that consumers see healthier foods as imperative items and not luxury goods that can be pared from the grocery list in cost-cutting times,” stated SmallCap Sentinel analyst Brian Kelly. “As consumers battle rising food and gas prices, many traditional purchases such as vacations are out- but not organic foods.”
“In a new study that was released recently at the inaugural Healthy Foods International Exposition and Conference which tracked 1,000 consumers from November 2007 to May 2008, data gathered supports the premise that organic foods are essential items,” Kelly added. “With study participants indicating they are willing to pay a premium for healthy foods, the study suggests to the organic industry that they market products in a way for consumers to manage their health conditions; offer more private-label and prepared-food solutions in the healthy foods category; and make more locally grown and natural products available at the supermarket.”
"According to trade publication Supermarket News, the study found that respondents indicated they were spending approximately 7.7% more on healthy foods in May than they did in November — $191.45 per household per month, compared with $177.69. “This appears to be both an acceptance of actual inflation in organic food prices and a deepening desire to find alternatives to conventionally produced goods. The survey indicated that 97.7% of respondents spent a portion of their grocery budgets on healthy foods in May, up from 96.5% in November; it also said 47.6% of households reported that at least half their purchases consisted of healthy foods.
“Additionally, the fact that the data in the study asserts that organic and healthy foods are invulnerable to present reductions in recessionary spending has to be viewed as bullish toward an increase in organic purchases throughout the recession and perhaps in greater quantities when the recession has subsided,” said Kelly. “It would seem reasonable to expect consumers to further increase their healthy food spending if and when there is greater discretionary income.”
The U.S. organic food & beverage industry continued to show dramatic growth in 2007, reaching $18.9 billion in consumer sales. As this dynamic growth continues, reliable sourcing of top quality, certified safe, and certified organic ingredients is a major problem for manufacturers. While 2007 was another year of stellar expansion for the U.S. organic industry, with most organic product categories experiencing double-digit growth, the supply side of the industry has not kept up with the growing organic demand.
“Companies such as Organic Alliance, Inc. (Pink Sheets: ORGC) which sources various organic products through arrangements with farmers, co-ops and other growers must be emboldened by this study,” Kelly added. "Factor in difficulties in obtaining organic foods for market in many instances and the opportunity for organic growers and suppliers is clear."
The hallmark of Organic Alliance is top quality, safe tested and certified organic at the source -- prior to customer shipment utilizing USDA certification in conjunction with the in-house OAI Quality Team. Company CEO Tom Morrison was formerly CEO of Superior Farming of Bakersfield, CA, the largest organic farming company in the world in the '90s.
For a more information on Organic Alliance visit this link:
http://stockupticks.com/profiles/6-11-08.html
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This report is neither a solicitation to buy nor an offer to sell securities but is for information purposes only and should not be used as the basis for any investment decision. MP is not an investment advisor, analyst or licensed broker dealer and this report is not investment advice. MP has been paid twenty-two thousand dollars by Organic Alliance Inc. for preparation and distribution of this report and other advertising services over a forty-five day period. This constitutes a conflict of interest as to MP’s ability to remain objective in its communication regarding the subject company.
Editor's Note: This commentary relied heavily on facts stated in articles published by Elliot Zweibach of SuperMarketNews.com
