Consumer Unwilling to Pay Big Organic Premium

SYDNEY - Feb 3/06 - SNS -- The premium consumers are wiling to pay for organic food products may not be as large as the industry thinks, discovered a survey of Australian consumers commissioned by Nourish Food Pty. Ltd.

Overall, most organic consumers believe current general prices for organics are around 16% to 50% more than conventional (or non-organic) products: 37% believe organics have a current price premium of 26%-50%; while 29% believe the premium is 16%-25%; and 14% believe the premium is 51%-100%.

"Most organic consumers are willing to pay a premium for organic products and seem to have made a lifestyle decision (eg, organics is better for my health, quality and taste is better) to rationalize the higher expenditure," said James Meldrum, co-founder of Nourish. "But they appear reluctant to tolerate high prices for too long."

Around 55% of organic consumers believe organics should, in general, be priced only between 6% and 15% more than conventional products. Indeed, around 20% of organic consumers believe there should be no price premium between organic and conventional products, while 37% think the organic premium should be less than 10%.

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