Summary Of The Smartmart Simulation

The organic food industry has seen a huge spike in growth that is expected to continue into the future due to an increase in consumption. This will provide Whole Foods Market with huge opportunities. In addition, a wave of ethical and responsible consumption has swept across America. Whole Foods’ decision to pursue sustainable activities will certainly give consumers an added incentive to purchase its organic products.

Now, I would like to discuss the benefits that our organic-based business will offer to our target customers. First, as far as the functional benefits are concerned, one of the key factors is that organic produce offers the consumer a healthier option when it comes to one’s eating habits. In regards to chemicals, organic produce refrains from using any kind of synthetic pesticides, fertilizers, fungicides, herbicides or synthetic preservatives and additives. As such, the amounts of hazardous residues within organic foods are basically restricted to the lowest amount (“Organic”, n.d.).

Organic farming began just as the effects of the Great Depression waned in the United States, and has seen a dramatic increase in popularity most recently (AG). The sales of organic food increased by about twenty percent a year throughout the nineteen nineties (Marcus). That is over ten times the rate of increase that conventional food experienced during the same period of time (Harris). As recently as twenty eleven, about seventy-eight percent of American families admitted to routinely purchasing organic food (Organic). Organic food sales jumped from three point five million in nineteen ninety-seven, to thirty-one million in twenty eleven (Organic). However, while organic food may seem better than conventional food, numerous studies have shown that it is not distinguishably more healthful, nutritious, palatable, or safe.

Author, Steven Shapin, in his essay, “What Are You Buying When You Buy Organic,” presents controversy reasons to buying organic food. Shapin’s purpose includes defending his point that organic food proves not always having the best results. He justifies his approach to buying organic foods with an argumentative appeal to the necessity of buying these products. Shapin questions the value of organic foods in larger organizations by targeting the industry, health, and the virtue.

Since 2006, the demand and market for organic food and drinks has been increasing exponentially. The demand for these organic products is growing much faster than the supply. Consumers are more interested in where their food is coming from and how it was made. “The latest data shows organic sales in Canada have tripled since 2006 to 3.7 billion dollars a year.” (Global News). There are not enough farms in Canada that produce and supply organic products to meet the high demand. It takes approximately three years for an average farm to convert to an organic farm. However, the whole farm does not have to be organic, a portion of the farm can be converted to organic while the rest operates the way it was previously. The demand curve has shifted

On the other hand, costs do rise when purchasing organic, locally sourced food because big food sellers like Wal-mart can afford to sell at lower prices. In response, Sara Vinson of Yellow Hen Farm in Covington recognizes that these small farms are “not trying to compete with Wal-mart” in view of higher prices for local farm produce. Higher prices make sense, though, as more manpower has been put into organically grown food than industrially produced products. Often, weeding and harvesting will require hours of labor since pesticide use is not allowed on an organic farm.

Whole Foods is using a competitive and strategic approached to set themselves apart from their rival in the retail grocery industry. By using a broad differentiation strategy, they could break through the industry by providing both a unique product and service, simultaneously. Due to all the scientific studies of healthy living, consumers are more conscious about what they buy and how they eat. Therefore, one of the chief element that Whole Foods has taken advantage of is providing sustainable and natural food. Although they are selling the same type of food as other retail grocery stores, another element of this strategy is that they are providing an alternative in terms of life style.

The prediction of organic products’ market growth is from $6.5 billion in 1999 to $13.3 billion in 2003. Generally, there are few characteristics of shoppers who purchased organic products regardless of channel which are higher income, more educated person and mostly live in the Northeast and West. 46% of them bought organic products at the supermarket, 25% at a small health foods store and 29% at a natural foods supermarket. Organic dairy products were bought by 74% of heavy organic food buyers and 29% of light organic food buyers.

The fundamental elements of Whole Foods Market revolve around offering the finest organic and natural foods to the customers through the retail grocery stores. It strives to sell products of the highest quality, most flavorful, least processed, freshest, and naturally preserved food available. Whole Foods market ensures that the goods are not just labeled organic; instead, they are grown and treated without hormones, pesticides, artificial fertilizers, and other additives. In this case, the ability to deliver superior value to customers under sound environmentally Fair Trade Practices best depicts Whole Foods. It is in tandem with the food industry, although part of its success originates from the narrow market

The organic foods industry is one that shows consistent growth. From year to year, they are undergoing an increase in demand. There are a number of factors that contribute to the industry’s growth. These factors include more consumers being educated, and conscious of health concerns of processed foods having a negative impact on their body and the environment. Trends in the retailing of organic foods would include the ups and downs in the

The demographic, economic and the socio-cultural segments would be the most relevant segments to Whole Foods Market. These segments have a direct impact on the profitability, sustainability and survivability of Whole Foods Market, and the organic food industry. The relevance of the demographic segment stems from the fact that the age structure, income distribution and population size are important factors which will influence the demand for organic products. The economic segment is relevant, as an affluent population will continue to drive and sustain demand for organic products. The socio-cultural segment is another relevant segment, where attitudes about quality of life,

Our local farmers and small business owners are our neighbors, friends, and a trusted source of food supply. As our awareness of health issues (caused by the foods we eat and how they are grown), is rising, the question as to whether or not to buy organic food, and from farmers and small businesses who choose to grow their food organically is becoming more relevant. Or do we

Above strategy would develop trust in shareholders as it will generate long term profit for the company by aligning company’s mission of healthier and sustainable organic product to the consumers. Also, this strategy will eliminate any competition from CSA’s and increase its market share in the organic food domain. The consumers or the customers will continue to be loyal towards SmartMart as they will get quality product with proper attention from SmartMart employees. Customers will get variety of organic food at one stop shop. This will increase customer satisfaction and build brand loyalty for SmartMart. The global suppliers for SmartMart might be unhappy as they might loose supply for the company but tying up with local suppliers such as CSA’s will add to variety of the organic products. The long term

Although organic production reflects similar cost structure with conventional production in terms of growing, harvesting, transportation and storage; total costs are higher in organic production due to more labour and management intensive process in order to adapt these strict regulations. This causes organic foods become more expensive than conventional foods. However, even more expensive, global demand for organic foods has been growing substantially over the last decades. There are several different reasons behind this rapid increase in consumer demand for organic foods. Food safety concerns linked to

Humans initially began farming organically when European farmers noticed a decrease in soil quality and crop health due to the use of chemical fertilizers (“Pesticides in Organic…” 1). This drop in soil quality left the farmers no other choice but to cease the use of chemical fertilizers and begin implementing less harmful supplements in order to improve crop quality (“An Oral History…”). This less invasive method of farming, otherwise known as organic farming, takes into account “the medium and long-term effect of agricultural interventions” (“What Are the Environmental…”) to strengthen environmental sustainability. Alternatively, industrial farming addresses problems as they arise, whereas organic farming ensures a less destructive way of living by taking preventative measures associated with the environment and health. As more consumers switch to the organic lifestyle, this proactive trend is estimated to grow at an annual rate of 14% until 2018 within the United States (Daniells). The estimated growth rate of the organic food market is significantly higher than the growth rate of the conventional food market (Daniells), thereby making “organic sales account for over 4 percent of total U.S. food sales” (USDA-ERS). According to the USDA, this organic trend has implemented organic products in roughly three out of four conventional grocery stores in the United States (“USDA-ERS”). While conventional farmers are not losing all of their buyers, many consumers have appealed to