1. 05 Consumers Seek Authenticity

2. Several Private Label Products are Perceived as More “Authentic” than National Organic Brands 5 As a consumer, how believable is it that the following brands produce an authentic organic product? Q26. As a consumer, how believable is it that the following brands produce an authentic organic product?

3. Consumers are Buying the Same or More Private Label 5 Compared to a year ago, would you say you are purchasing more of, less of, or about the same of the following types of products listed below? 73% of Primary Shoppers are buying the same or more private label than a year ago

4. Most Consumers At Least Somewhat Trust the USDA Organic Label 5 Q13: How much trust do you put in the USDA Organic label? In other words, how well do you think it symbolizes (or stands for) a truly organic product? I trust the USDA organic label... Trust in the USDA organic label has not significantly changed since 2008

5. Beyond Organic: Consumers in the Core are Seeking More 5 Consumers in the core have moved beyond organic. They still see organic as a positive, but it no longer satisfies their social, environmental and personal health standards These consumers are seeking foods that are traceable through personal relationships with farmers in order to know that they truly align with all of their standards: Pesticide & synthetic fertilizer free Non-Mono Crop Local Biodynamic Sustainable

6. Where Do You Buy Organic? 5 Q18. Where have you purchased ORGANIC foods or beverages in the PAST 30 DAYS? Use of Farmers Markets for organic purchases has gone up from 18% in 2008 to 25% in 2010 Use of CSAs and Co-ops have doubled from 2% and 3% in 2008 to 4% and 6% respectively in 2010

7. Consumers Seek Authentic Retail Experiences 5 The increase in consumers purchasing organics through farmers markets, CSAs and co-ops reflects their desire for clean, authentic foods through clean, authentic retail experiences Farmers markets, CSAs and co-ops provide consumers with more knowledge about the products they buy and the ways in which they are grown

8. 06 Categories: Similarities and Differences

9. Fresh Organic Categories Continue to be Most Important to Purchase 6 Milk has risen to number 3 from number 6 in 2008 Q16. Of the following organic products you have purchased in the PAST 3 MONTHS, which of the following are MOST important to you to purchase as organic?

10. Organic Adoption Pathway Begins with Products Perceived as Whole and Real 6 Produce Dairy & BreadMeatBoxedCannedFrozen Vegetables Fruits Milk Eggs Bread Yogurt Cheese Ice Cream Chicken Beef Fish Cereal Pasta Rice Meals Vegetables Fruit Soup Vegetables Fruit Meals Whole Packaged

11. Fewer Consumers are Willing to Pay a 30% Premium Across all Categories 6 For which ORGANIC foods/beverages are you willing to pay 30% more than their conventional versions? (For example, paying 30% more would be like choosing a $3.90 organic product over a $3.00 conventional product.) The willingness to pay more in certain categories illustrates the hierarchy of value consumers place on certain organic categories

12. Regular Users of Organic Food are Willing to Pay a Premium 6 Median maximum price regular users* would consider paying for the following products: *Note: Regular users consume organic foods and beverages at least weekly Q21. At what price would you consider a conventional brand of [Insert category] starting to get expensive, so that it is not out of the question, but you would have to give it some thought? Q22. At what price would you consider a natural brand of [Insert category] starting to get expensive, so that it is not out of the question, but you would have to give it some thought? Q23. At what price would you consider a organic brand of [Insert category] starting to get expensive, so that it is not out of the question, but you would have to give it some thought?

13. DairyShelf StableFrozen 1FreshClean 2 Fresh 3RealPesticide free 4 Real 5Humane treatment of animalsNaturalHumane treatment of animals 6Pure 7Hormone-freeHumane treatment of animals Natural 8 Hormone-free 9Allergen-freeLess processed 10Whole Which of the following labels or phrases are important to you in this category? Q5. When selecting dairy products to purchase, how important are the following labels or phrases to you? Q6.When selecting frozen food to purchase, how important are the following labels or phrases to you? Q7. When selecting shelf stable products to purchase, how important are the following labels or phrases to you? Consumers Seek Symbolic and Objective Attributes Across Categories 6

14. Fresh Produce 6 Produce is a key gateway product into the World of Organic Natural is not relevant in this category because consumers see fresh produce as inherently natural Some consumers are aware of a variety of lists of produce items that are most important to buy organic including some subset of the following: Nectarines Celery Pears Peaches Apples Cherries Strawberries Imported Grapes Leafy Greens Potatoes Bell Peppers Red Raspberries Carrots Tomatoes

15. Dairy 6 Dairy is generally seen as real food which less processed than frozen or shelf stable products and is judged with somewhat different standards and there are more options for believable attributes Milk is a key product in the dairy category associated with organic, and it is often one of the first organic products a consumer will purchase Key attributes in Milk are hormone and antibiotic free, and not pesticide free

16. Shelf Stable & Frozen Products 6 Preferences for natural & organic in shelf stable and frozen products vary by orientation to the World of Organic Shelf stable and frozen products they are already seen as a compromise in freshness, and so they inspire more or less investigation depending on the consumers orientation “It's already not what I should feed my kids, so it should at least be natural and organic” Inner Mid-level & Core consumers “Why bother, it's convenience food” Outer Mid-level & Periphery consumers

17. 08 Recommendations

18. 1.Identify your target consumer segment to focus on relevant dimensions of consumption 2.Develop natural and/or organic products that meet objective criteria and align with consumers symbolic associations 3.Develop packaged natural and organic products that can be utilized as ingredients increasing the freshness perceptions and the importance of natural, organic and other attributes 4.In packaging and messaging utilize consistent narrative to symbolically and objectively communicate natural and organic 5.Communicate company ideals and connections to social responsibility through a mission statement 6.Provide consumers holistic experiences at retail that tap into their symbolic associations with clean, whole and real Six Key Recommendations 8

19. To learn more about the Beyond Organic & Natural report, please visit our website. Sign up for our free inspirational and influential newsletter, HartBeat: www.hartman-group.com/hartbeat ABOUT THE HARTMAN GROUP The Hartman Group, located in Bellevue, Washington, blends leading-edge customized research and consulting to understand the subtle complexities of consumer and shopper behavior. Since 1989, Hartman Group has been listening loudly to the underlying motivations and behaviors that move the needle for our clients. To learn more about how Hartman Group stays sharply focused on how consumers live, shop and use brands and products visit: www.hartman-group.com THE HARTMAN GROUP, INC 1621 114TH AVE SE, STE 105 BELLEVUE, WA 98004 TEL (425) 452 0818 FAX (425) 452 9092