Organic Food Purchasing at Raley's: Economic and Behavioral Factors

Introduction: Organic Foods at Raley's Supermarkets

This paper examines the economic factors affecting customer purchase of organic foods at Raley's Supermarkets, asking what economic factors influence whether Raley's customers buy organic foods and whether other factors beyond economics are also involved. Raley's Supermarkets, a Northern California and Northern Nevada food chain, has always been known for its high-quality produce and meats. They carry a variety of organic produce and natural foods, and many shoppers rely on Raley's for fresh food rather than the cheapest prices in town.

In a typical Raley's Supermarket, the organic produce is located at the entrance to the produce section, commonly on the side that shares an end cap with the natural foods section. This arrangement guides the natural foods shopper directly into the produce section if they enter after completing their natural food shopping. The produce section is usually located at the rear of the store, adjacent to the dairy section. The organic produce is grouped together in a series of bins or trays that look attractive and colorful, and there are no large signs announcing the organic section, although signage is present if the consumer looks closely enough. The main difference from the rest of the section is that all the organics are grouped together, while other items are separated by type — tomatoes apart from potatoes and citrus, for example. There are also organics spread throughout the department, such as organic herbs placed with the other cut herbs and organic salad mixes displayed alongside other salad greens.

Clearly, organics are popular at Raley's: during visits at peak times, some items — such as fresh wheatgrass in a pot — are sold out. This indicates that consumers use at least some of these organic products regularly and continue to purchase them. It also indicates that the store's buyers know their customers and stock accordingly, since these products disappear from the shelves. As one group of researchers notes, "Estimating when consumers will purchase within a given product category is essential to the success of several managerial activities, such as stock replacement, number of open cashiers, size of the store, among other things" (Oliveira-Castro, James, and Foxall 485). While the popularity of these products is evident, it does not on its own explain what other factors drive purchase decisions.

Price and Income as Economic Predictors

There is almost always a price difference between organic produce and regular produce, and that price difference does appear to be a prime motivator — or deterrent — for many buyers. One group of researchers notes, "With the exception of price, traditional economic or demand-theoretic variables such as income, family size, total food expenditure, and expenditures on produce do not seem very important for predicting demand for EIP [Environmentally Identified Products] produce" (Harris, Burress, and Eicher 5). Thus, while income may not be a strong economic predictor of organic produce purchases, the actual price difference between organics and conventional produce may discourage some buyers.

The same authors continue: "[M]ost studies do not seem to support the notion that purchasers of EIPs have higher incomes than non-purchasers. However, high income is nevertheless perceived to be a common characteristic of purchasers of organic produce" (Harris, Burress, and Eicher 8). In other words, shoppers may believe that buying organic requires a higher income, but this perception is not grounded in fact. That said, some studies do show that organic purchasers have a higher disposable income than other shoppers (Harris, Burress, and Eicher 9), suggesting that the relationship between income and organic purchasing is more nuanced than a simple correlation.

Shopping Behavior and Gender Patterns

Another aspect of organic purchasing may be largely random. Observing consumers move through the produce aisles, it is apparent that many shoppers stop, look carefully, and take time to select their produce, while others move through the department quickly — looking for what they normally buy, what is on sale, or what is on their shopping list. These faster-moving consumers tend not to stop and browse, and may not cover all areas of the produce department. They may pick up salad ingredients and, continuing down the aisle, arrive in the organic section simply because it is located next to the salad items. Some of these shoppers may not realize they are purchasing organic produce at all; they are simply finding needed items as efficiently as possible.

Male consumers tend to shop this way, and it appears that more men end up in the organics section without realizing it. Women, on the other hand, tend to spend more time in the produce section overall and seem to move to the organics section at the beginning of their shopping, as though deliberately choosing organic produce over conventional options. Women who select organics also tend to seek out organic salad greens, herbs, and other organic items spread throughout the department, and they appear to look for the organic label more intentionally.

When one male consumer was asked whether he knew he had purchased organic produce, he said no — he was simply getting the items on his shopping list. When the interviewer pointed out that the conventional produce was less expensive, he still held on to the organic produce, saying it looked "healthier." This suggests that some consumers may not be aware they are purchasing organic produce because the labels are small and easily overlooked, yet when given a deliberate choice, consumers do make an effort to seek out organic produce and understand they are paying more for naturally grown food.

Conclusion

There are many different reasons consumers buy organic produce and other items in a Raley's Supermarket. Many studies indicate that consumer choice is shaped by numerous elements, from income and price sensitivity to conscious values-based decisions, but many purchases are also simply unconscious choices made in the moment. As Dijksterhuis and colleagues observe, "Only a limited number of choices are based on conscious information processing strategies. The rest of the variance left to explain is caused by unconscious effects of all kinds of subtle cues in the environment" (Dijksterhuis, Smith, Van Baaren, and Wigboldus 200). When it comes down to it, the consumer who selects organic produce may be seeking a healthier alternative, or they may simply be influenced by the vibrant display, the convenient placement of items, or even the sight of another shopper choosing organic herbs and salad greens — it is difficult to pinpoint a single motivator for every customer.

References

Dijksterhuis, A.J., Smith, Pamela K., Van Baaren, Rick B., and Wigboldus, Dani H. "The Unconscious Consumer: Effects of Environment on Consumer Behavior." Journal of Consumer Psychology, 2005, Vol. 15, Issue 3, pp. 193–202.

Harris, Brian, David Burress, and Sharon Eicher. Demands for Local and Organic Produce: A Brief Review of the Literature. University of Kansas, 2000.

Oliveira-Castro, Jorge M., Victoria K. James, and Gordon R. Foxall. "Postreinforcement Pause in Grocery Shopping: Comparing Interpurchase Times Across Products and Consumers." Psychological Record, Fall 2007, Vol. 57, Issue 4, pp. 483–500.

Tin, Sandar Tin, Cliona Ni Mhurchu, and Chris Bullen. "Supermarket Sales Data: Feasibility and Applicability in Population Food and Nutrition Monitoring." Nutrition Reviews, January 2007, Vol. 65, Issue 1, pp. 20–30.