Organic Brands | Dairy Milk | brandchannel.com

Leaping Milk Sales
Horizon Organic was the first to offer organic milk to Americans nationwide. The effect was such that it set up an ever-growing network of farms and processing plants to meet skyrocketing demand. Other like-minded dairies also grew – and continue to expand – to keep up with the consumer clamor for organic.

The "Happy Cow," Horizon Organic's bovine mascot leaping across its product packaging, heads the company's brand positioning. "This logo is fun, appeals to a broad range of consumers and helps make our products easily identifiable," said marketing product manager Gwen Scherer. With US milk sales projected at US$ 110 million for 2002, Horizon has 52.8 percent of the national market share for fluid organic milk.

Horizon's closest national competitor, Organic Valley, has also seen business soar. The company is currently in the number two spot for fluid organic milk sales, capturing approximately 30 percent of the market.

With sales for fluid organic milk alone projected at US$ 68 million for 2002, Organic Valley is not surprisingly anxious to continue to attract consumers to its offering in the busy refrigerated section of the supermarket. "We have just completed an 18-month consumer research and brand study [and] we will be upgrading our logo," explained Theresa Marquez, vice president of sales and marketing. The current look and feel of its packaging features an idyllic farm scene, which reinforces the company's dedication to supporting small family farms. Marquez explains that "stories about our farmers or about the environment" grace carton sides and keep the consumer connected to the product and how it was produced.

The remaining competition consists of private label organic milk, capturing the number three spot nationally and comprising less than 10 percent of the market share. "Private label sales vary dramatically by market, depending on the retail chains…and whether or not they offer a private label organic milk," said Horizon Organic's Scherer.

Consumer Culture
Think about who buys organics, and think again. The organic consumer is educated and more mainstream than you may think; new and expectant mothers are the fastest-growing category. Horizon Organic describes its consumers as "concerned about toxic pesticides, growth hormones and antibiotics in their food and in the environment, and place[ing] value on animal welfare and ecological sustainability."

For Organic Valley, these "cultural creatives" represent nearly one-quarter of the population, with approximately 70 percent having some college education. Some industry analysts have broadly termed this cultural category as LOHAS: Lifestyle of Health and Sustainability.

Mission Driven
Fast-paced growth is only part of the organic milk success story. Behind the scenes lies a purpose that fuels every aspect of business. "As a cooperative, we are structured to nurture farming families for years to come, not to grow the company as large as we can and sell," said Organic Valley's Marquez. The company goes a step further by partnering with the Waterkeeper Alliance, a grassroots organization dedicated to protecting water from pollution. Their mission pairs well with organic farming's role in protecting water sources from the chemical run-off typical of commercial farms.

Also on the path of social integrity, Horizon Organic emphasizes the use of renewable resources as well as soil and water conservation "to enhance environmental quality for future generations," said Scherer. Horizon Organic makes sure the Happy Cow is more than a logo by "allowing [the cows] to make milk the natural way, with access to plenty of fresh air, clean water and pasture," according to the carton panel.

A National Teach-In
Educating the public about what organic really means is at the heart of organic milk sales. At about a dollar more per half gallon (25-30 percent markup), consumers need to know why reaching deeper into their pockets makes sense. For many organic retailers, this is the hardest part of the sell.

Both Organic Valley and Horizon Organic preach from their cartons, with one or two panel sides dedicated to teaching consumers that their health is worth the extra cash.

In mid-October consumer education was taken to a new level when the USDA's national labeling system for organic products hit shelves. The four-category labeling system includes a round "USDA Organic" seal, so the public will know at a glance what percentage of a product is made with organic ingredients. The system is designed to further boost consumer confidence in knowing that organic products sold in the US are all held to the same government standards.

Beyond Milk
Both Horizon Organic and Organic Valley continue to expand their product offerings well beyond milk. From butter to cottage cheese, both companies offer a full line of dairy products in addition to juices and eggs. Organic Valley has gone even further by adding meats to its product lineup.

Global expansion is also on the menu. Interest in organics is on the rise in Japan where Organic Valley sells cheese and Horizon Organic licenses its brand for use on organic dairy products. Organic Valley has gone off shore to market milk in Puerto Rico. Likewise, Horizon Organic has gone further a field to expand its presence in the UK under the Rachel's Organic brand name.

From family farms to cleaner water and happy cows, organic milk is convincing consumers by the herd that voting with the wallet is good for one's health. One thing's for certain, consumers are hungry – and thirsty – for organic.

[25-Nov-2002]

Erin S. Ihde is a freelance writer and former VP of Environmental Affairs at Green Team Advertising, NY. She holds an MA in Environmental Education from NYU.


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