Organic food sales are expected to rebound and outperform conventional sales at the retail level, according to a new report by Mintel Group International Ltd., Chicago.
Though sales of organic food items — including produce — have fallen during the recession, sales haven’t plummeted as far into the negative territory seen by conventional food producers. In fact, most sales for organic food stayed positive, though not close to the nearly 30% growth levels seen before 2008, and Mintel expects growth to remain strong through 2012.
David Browne, a senior analyst for Mintel based in San Francisco, said that’s partly due to organic consumer loyalty and a growing menu of options like private labels that’s allowed consumers to still buy organic food but pay less for it.
“Private label is gobbling up the market,” Browne said.
Specifically, the report found overall organic food and drink sales declined .3% this year, and the entire organic segment saw sales decline by .6% in 2009. But the sales for the largest segment in the organic market, “shelf-stable” food and drinks, increased by 13.4% to nearly $2.5 billion, according to the report. Sales remained strong for the fastest growing organic segment, packaged organic produce like salads and berries, which grew 24% from 2007-2009 with sales approaching $1 billion, according to Mintel.
Browne said that’s due to the competitive pricing of organic items like salads and consumers willingness to continue purchasing these items despite cutting back on organic purchases for other food items.
The survey is based on data collected from food, drug and mass market stores, excluding Wal-Mart and some natural supermarkets.
(Note on correction: The story was amended to clarify a decline in overall sales for the organic segment).