Organic’s premium prices may not be high enough

As it turns out, Whole Foods Market may have a tougher time shedding its “whole paycheck” reputation.

While organics have become more mainstream and commoditized, a new report from BB&T Capital Markets suggests that organic price premiums vs. conventional pricing may still be too low from a producer and supplier standpoint.

“Although organic food products generally command a price premium, it has oftentimes been insufficient to fully offset the higher cost, resulting in narrower margins,” said the report. “Consequently, supply has not kept pace. This disconnect has exerted cost pressure on most organic ingredients, which is likely to worsen should demand growth continue to outpace conventional.” read more –