The Perils of Perception

23 January 2014


The Importance of Perception


A recent post to this blog [1] argued that the success of Ford’s new, fuel efficient F-150 series of light trucks will depend on buyers’ perceptions of how tough aluminum is. The technology itself is well proven in military and other demanding applications. It’s not the technology; its peoples’ perceptions that matter in the marketplace.


The importance of perception weighs heavily on many Green products and Green issues. Global Warming, for example, is perceived by some as a serious and immediate scientifically verified threat to the entire world. Others perceive Global Warming as Chicken Little-ism at best, never mind what the science says. Organic foods provide another example.


Organic Foods


A United States Department of Agriculture consumer brochure [2] describes organic foods this way:


“What is organic food? Organic food is produced by farmers who emphasize the use of renewable resources and the conservation of soil and water to enhance environmental quality for future generations.  Organic meat, poultry, eggs, and dairy products come from animals that are given no antibiotics or growth hormones.  Organic food is produced without using most conventional pesticides; fertilizers made with synthetic ingredients or sewage sludge; bioengineering; or ionizing radiation.  Before a product can be labeled ‘organic,’ a Government-approved certifier inspects the farm where the food is grown to make sure the farmer is following all the rules necessary to meet USDA organic standards.  Companies that handle or process organic food before it gets to your local supermarket or restaurant must be certified, too.” (Italics mine … CH)


Organic Food Sales GraphThis certainly has a common sense appeal. But it does raise the question “are ordinary supermarket foods good to eat, or not?” A recent Motley Fool post [3] says that the science doesn’t find any difference in the safety (or taste) of ordinary supermarket grade foods and their organic counterparts. So, the science and common sense are at odds in this matter too. And it looks like perception is leaning increasingly toward common sense. Organic food sales have grown to nearly a 30 billion dollar industry in the U.S., approaching 5% of total food sales. Between 1998 and 2012, organic food sales grew at a 14.7% compounded annual rate, while total food sales grew at a 2.9% rate.


Organic Pizza RestaurantA sustained 14.7% compounded growth rate for a premium priced Green product group across a period that includes the Great Recession impresses me. Further, I see that specialized organic foods stores now compete with mass market outlets (Wall Street favorite Whole Foods Market is America’s #1 retailer of organic foods — mass marketer Kroger supermarket group is now #2). I also see more and more restaurants serving organic foods — and not just restaurants catering to vegetarians and flower children. A local pizza restaurant chain comes quickly to mind.


Industrial Agriculture vs. Sustainable Agriculture


The rise in organic foods production and sales, the absolutely amazing rise of bottled water sales in the U.S. in recent years, along with significant resistance to genetically modified foods (GMOs), all suggest a growing concern for the healthfulness of our food and the integrity of our food supply.


Wheat Yields in Developing CountriesIn fact, the world’s food supply has grown very rapidly over the last 50 years, far eclipsing the surging world population growth. Many more people are eating much better today than they did 50 years ago, due in large measure to the “Green Revolution”, which combined synthetic fertilizers with hybrid crop varieties, pesticides and irrigation practices. [4] It is fair to say that the “Green Revolution” has “industrialized” agriculture. It is also fair to say that it has worked, in as much as hundreds of millions of people have benefitted from having considerably more to eat than they would have otherwise.


The definition of organic foods cited above suggests that organic farming provides a form of sustainable agriculture. However, the world’s population continues to grow, with an additional two billion humans expected by 2050. The question, then, is how to reconcile concerns for the healthfulness of our foods and the environmental sensitivity of its production with production rates available from “industrialized” agricultural practices. That is, how to combine the healthy, Green perception of organic foods with the industrial – strength throughput of the “Green Revolution”? “Either – or” isn’t an option. This is one of the great challenges facing all of us today — a challenge that is at the heart of what Sustainability means.


Implications for Smaller Manufacturers


>> Perception trumps science — People tend to embrace scientific evidence when it supports their perceptions. Otherwise, they tend to become circumspect toward scientific evidence.


>> How manufacturers are perceived — Manufacturing, especially manufacturing facilities, are often perceived negatively. Images of sweat shops, fumes and regimentation come to many minds. Strongly held perceptions are usually quite difficult to change.


>> Opportunities for differentiation — The success of organic foods demonstrates that products can be differentiated on perceived cleanliness, healthfulness or “fairness[5] . The sources of such products need to be likewise favorably perceived. In many instances, those products may command premium pricing.


Thoughtful comments and experience reports are always appreciated.


…  Chuck Harrington
(Chuck@JeraSustainableDevelopment.com)


P.S
: Contact me when your organization is serious about pursuing Sustainability … CH


This blog and associated website (
www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published on Wednesday evenings.



[2]  U.S. Department of Agriculture, National Organic Program — Consumer Brochure: Organic Food Standards and Labels: The Facts—  http://www.ams.usda.gov/nop/Consumers/brochure.html

 

[3] B. Stoffel, Whole Foods and the Organic Movement: Bigger Than You Think, a Motley Fool web posting, 29 December 2013http://www.fool.com/investing/general/2013/12/29/whole-foods-and-the-organic-movement-bigger-than-y.aspx. Note: The graph labeled “Organic Foods % of U.S. Foods Sales” was constructed from tabular data presented in Stoffel’s post.

 

[4] Source: The Wikipedia wiki on the Green Revolution, http://en.wikipedia.org/wiki/Green_Revolution. Note: The graph labeled “Wheat Yields in Developing Countries, 1950 – 2004” is from this Wikipedia wiki. The graph is in the public domain.

 

[5] To appreciate the power of perceived “fairness”, witness the success of Fair Trade pricing policies, where retail consumers in the developed world pay significant price premiums to benefit small producers (usually farmers), usually in the developing countries.