Organic food is a $100 billion industry yet so far has been able to consistently raise prices and maintain its health halo without issue.
It is certainly brilliant marketing and a bit of manufactured misperception about its process and its Myth of the Oppressed Underdog status. “Organic farming doesn’t have the same level of support. It also doesn’t have the luxury of using chemical solutions. For these reasons, organic foods are more expensive,” organic food and drink maker Clif Bar&Company’s Matthew Dillon told Mark Koba at Fortune.
But it is not going away and that is why everyone is diving in. Whole Foods is the public perception of organic food but Wal-Mart, Kroger and Costco are leveraging those higher margins too. It is not a push bet, they are not cannibalizing revenue, with the higher margin they can't lose.
Yet the health halo may be collapsing. During the height of the California GMO labeling craze, I noted it was strange that the labeling law would require a special designation on a cupcake mix while a Whole Foods bakery cupcake that was far less healthy didn't even require an ingredient list. Organic junk food is junk food and healthy conventional food is healthy. Despite bizarre claims that organic food has 'no chemicals' (of course it does, organic fertilizer is just different than synthetic fertilizer) and that it is more nutritious (only the organic food academic equivalent or chemists at Big Oil write those goofy papers), people have begun to see through it.
Small farmers are going to be driven out of the market because imports will block them out. Most people realize that organic food is just a label and a fee - and that even the label can be had with dozens of synthetic ingredients allowed - but when China takes over that market, the label will have even less value.
