What is organic food franchising and is it a successful franchise industry to invest in? Organic food franchising developed from a market niche created by more people purchasing organic grown products and services. With a surplus in consumer demand for organic food, franchisors capitalized on this demand and created successful organic food franchises ranging from pizza franchises to retail franchises. One thing remains certain they have become very profitable as a result of filling this gap in the market. As a result, it is worth considering investing in organic food franchising, as experts predict future growth and profit for this new industry. Anyone interested in investing in this industry can do so through a number of organic franchise businesses.
Interesting Facts: Organic Food Franchising
- Figures released by the Organic Trade Association for 2006 reveal organic food sales in the US grew 20% to reach approximate figure of $17 billion in consumer sales in 2006. (OTA Manufacturer Survey, 2006 and 2007)
- Organic food is still the largest segment of organic products sold in the US, reaching $16.7 million in consumer sales and making up 95% of all organic product sales. (OTA Manufacturer Survey, 2006 and 2007)
- High market growth rates pushed global organic food and drink sales towards $40 billion dollars in 2006. (OrganicMonitor.com)
- Several European countries are struggling to cope with consumer demand for organically produced food products. This has created a great gap in the market for organic food franchises. (OrganicMonitor.com)
- US consumer demand for organic products is concentrated in North America and Europe; these two regions comprise 97% of global revenues. [According to the International Federation of Organic Agriculture Movements (IFOAM)]
- Furthermore, according to Franchise Focus, the top ten food trends for 2008 will be in the organic, or health and wellness category, whereby more individuals are demanding businesses to provide customers with health conscious food products.
Why choose to invest in an organic food franchise?
Organic food franchises are undoubtedly a niche market within the franchise industry, but it is also a very profitable niche market to invest in. Consumers will tend to dig deep to pay for products that are deemed expensive if they know they are buying a product or service that will be beneficial to them in the long term. Therefore, consumers are willing to buy expensive organic food products because it will benefit their health in the short term.
According to a survey conducted by The Organic Trade Association in 2003, "63% of respondents believed that organic food and beverages were more healthful than their traditional counterparts". While obesity is still a major health concern for many consumers in the US, there is a significant amount of consumers interested in counting calories, fat and sugar content in traditional food products and services. As a result consumers are buying organic food products for its health and nutritional benefits. And guess what? This has created a niche market in which organic food franchisors have started to take advantage of and earn huge profits as a result of this new trend...
What types of organic food franchises can I invest in?
Organic Food Restaurant; Home-based and Retail franchises...
When it comes to choosing a franchise, people can invest in either a restaurant franchise, such as Pizza Fusion, and run their own store within a specified location or deliver hand-grown products in vans and work from home. Or potential franchisees can run an organic food shop, but they need to ensure the location is best suited for the type of business they are investing in. It should be in an area of a town or city that people can easily access and where a large number of people go. However, while having a few other food stores in the area could help the business to attract hungry customers, too many would dent profitability - particularly if they sell organic food - and so franchisees must look into their competition in detail.
If delivering organic food, franchisees can work from home or an office, but they should carry out extensive market research to find out which areas of a town and city and what types of people buy the most organic food so they can be prioritized.
Going to a franchised business will benefit people because it will already have a number of company suppliers and farmers in place to provide the organic food, enabling franchisees to quickly build up a customer base.
This is particularly important in the organic food industry as like all organic products that are sold, those that produce organic food and sell it must have a license to do so and franchisees will not have to worry about their initial suppliers as the franchisor will have checked their credentials.
Of course, when looking to bring in new suppliers, franchisees need to ensure they are legally able to sell this food type.
In addition, franchisors will train franchisees to understand the principles of organic food process, how the food is supplied, for example a new trend developing is box schemes where framers turn up to your house or shop with goods in a box that you can buy, and how to market the products to the public.
This will enable franchisees to talk with knowledge and confidence about organic food to customers, which will increase the chances of them using the business again.