Organic sales hit US$35bn in the States

Sales of organic products in the US increased to US$35.1 billion in 2013, a jump of 11.5% on the previous year. This is the fastest growth rate in five years, according to a survey from the Organic Trade Association (OTA).

The growth is expected to continue, with the OTA forecasting that growth rates over the next two years will keep pace with 2013 growth and may even slightly exceed it. Organic packaged and pre-prepared food is expected to grow rapidly.

“The US organic market is experiencing strong expansion, with organic food and farming continuing to gain in popularity. Consumers are making the correlation between what we eat and our health, and that knowledge is spurring heightened consumer interest in organic products,” said Laura Batcha, executive director and CEO of OTA.

At $32.3 billion, organic food sales in 2013 accounted for roughly 92% of the total organic sales. Sales of non-food organic products - worth almost $2.8 billion - have jumped nearly eight-fold since 2002, and have almost doubled in market share.

While organic products were just a niche industry in the sector a decade ago, consumer purchases of organic food hit $30 billion in 2012 and now account for more than 4% of the $760 billion annual food sales in the US.

Most telling is that the growth of organic food sales has averaged almost 10% each year since 2010 - eclipsing the average annual growth of 3% in total food sales during that period.

The organic fruit and vegetable category leads the sector with $11.6 billion in sales, up 15%. More than 10% of fruit and vegetables sold in the US are now organic.

Growth in various organic product categories is as follows:

• organic condiments sales increased 17% to $830 million
• organic snack food sales increased 15% to $1.7 billion
• organic bread and grains sales increased 12% to $3.8 billion
• organic meat, poultry and fish sales increased 11% to $675 million
• organic packaged and prepared food sales increased 10% to $4.8 billion

While there’s plenty of good news, the US organic sector faces several challenges. Farmland in the US is not being converted to organic at the pace needed to meet the growing demand for organic products. Supplies of organic feed and grain have been tight and costly, which could limit growth, especially in the organic dairy and meat sectors.

Consumers are also confused about exactly what organic means. Labels promoting ‘natural’ and ‘GMO-free’ products further muddy the water, as consumers aren’t aware of the differences.

“The entire organic industry needs to rally around helping consumers better understand and appreciate all the values that certified organic brings to the table. Consumer education is critical to grow the organic industry,” said Batcha.

The full report is available from www.ota.com/bookstore/14.html.