Organic sales maintaining growth mode - The Packer

Organic sales maintaining growth mode

05/06/2014 03:38:00 PM
Tom Burfield

Kern Ridge Growers LLCTom BurfieldKern Ridge Growers LLC, Arvin, Calif., offers a selection of organic carrots, including jumbo, table, juice and baby peeled carrots as well as bulk carrots in bins for industrial juicing or production. Account manager Chris Smotherman says about 10% of the company's carrots are organic, and that figure is gradually increasing every year. "It seems like the organic (category) is getting a lot of traction right now," he says. "If it continues to go the way it's going, we'll respond accordingly and make more available."After stumbling a bit during the recession, the organic category has made a significant comeback.

During the 52-week period ending Feb. 22, the organic dollar contribution to produce department sales was 6.7%, an increase of 21.6% compared to year-ago figures, according to Nielsen Perishables Group.

Top-selling organic vegetable categories (in dollar sales) were packaged salad, carrots and cooking greens, according to Nielsen.

Top-selling organic fruit categories included berries, apples and bananas.

“While these categories are consistently high-sellers, other organic categories experienced dollar growth of more than 50% when compared to the previous year,” Nielsen reported.

Those categories include pineapples, corn, stone fruits and specialty vegetables, including mangoes, guava and pomegranates.

Despite the overall upward trend, California’s organic industry took a beating this winter, when near-perfect weather resulted in a glut of product “growing like crazy,” while horrific storms and cold weather in the East keep consumers indoors and prevented trucks from making deliveries to supermarkets, said Peter Oill, director of sales and marketing for organic for Boskovich Farms Inc., Oxnard, Calif.

In some cases, cartons of vegetables were selling for $5-8, which is less than it cost to grow them, he said.

But spring ushered in a vastly improved scenario.

“The market definitely bounced back after depressingly low prices during the winter,” Oill said.

Cold weather delayed the start of the growing season in some parts of the country, he said, which gave growers in the West an extra month or so to peddle their organic wares.


Strong since recession

Following “a real dip” in the organic category at the beginning of the recession, Salinas, Calif.-based Pacific International Marketing now is struggling to keep up with demand for a lot of organic items, said president Tom Russell.

He estimates that the firm’s organic sales are up 300% compared with five years ago, and he doesn’t see the trend slowing.

“It’s not just the economy improving,” he said. “I really believe people are more health conscious about what they’re consuming.”

At Earl’s Organic Produce in San Francisco, Earl Herrick, owner, president and founder, said the company continues to experience an annual increase of about 15% on all organic items, as it has for the past several years.

“It continues to be a very vibrant industry,” he said.

Sales of organic bananas have been on the rise for at least the past 10 years at Organics Unlimited Inc., San Diego, said Mayra Velazquez de Leon, chief executive officer.

“I see the organic section in every supermarket becoming an important part of their produce aisle,” she said.

“Everyone wants to carry organic bananas, apples and pears,” she added.


Avoiding GMO products

A desire on the part of some consumers to avoid genetically modified foods is helping fuel the growth of the organic category, said Simcha Weinstein, marketing director for Albert’s Organics, Bridgeport, N.J.

“If consumers are truly concerned about GMOs in their food, then the best solution is to choose organic,” he said.

“By law, GMOs are not allowed in the production of organically raised food, and in addition to staying clean of GMOs, you are also staying clean of chemical pesticides, fertilizers, insecticides, and herbicides.”

The juicing trend also has given another boost to the organic category, said Kevin Weaver, director of sales and new business development for Global Organics, Sarasota, Fla.

Shoppers are taking home items like organic kale, carrots, beets and berries to make “a nutrition-packed drink that people can consume on the go,” he says.

The trend has led to a lot of new business for the company, especially in the East, he said, where there is a proliferation of juice bars and healthy-lifestyle restaurants.

“The growth in that part of the market is incredible,” he said.

“I think the organic category is going to continue strong double-digit growth for the foreseeable future,” Weaver said.

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