Organic food products, like Amy’s Kitchen, have traditionally been in a high cost category both for the producer, the consumer and everyone in between. This is because up until the last 5 years or so these types of products were still in their introductory stage as they were just beginning to be introduced to a competitive market. Ten years ago vegetarians and other health conscious consumers had to pay top dollar for high quality, organic food items because low demand resulted in low supply and demand was fairly inelastic. In that market where alternatives were scarce, prices could skyrocket and people had only two options, pay the high price for that type of product (ie. organic multi-grain snack bars) or don’t buy them at all. Health is not just for the hippies which was once the “bean sprouts and granola” stereotype. Consumers growing awareness of the harmful impact of pesticides and preservatives has lead organic food products into a growth stage, giving products more elastic demand, allowing for more competitive prices. Growing demand is causing more suppliers (manufacturers, farmers, producers of ingredients) to enter the field increasing opportunities for brands and the procurement of resources, finally driving down prices. Amy’s products, which have been around for about 22 years, are now facing competition though they are still the nation’s leading organic frozen food supplier.
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