The organic category is here to stay — and it’s growing, according to companies with organic offerings.
“We’ve seen significant growth, roughly about a 30% increase in organic volume over last year,” said Jim Roberts, vice president of sales for Naples, Fla.-based Naturipe Farms LLC.
“It’s really become a much larger percentage of our overall sales,” Roberts said.
Other companies also have noticed the uptick in sales, and they believe it’s unlikely those trends will revert.
“I don’t think we’ll ever turn back the clock,” said Matt Seeley, vice president of marketing at The Nunes Co., Salinas, Calif.
“I think it will be a steady rise with periods of substantial growth and then plateaus,” he said.
Hector Crisantes, West Coast sales manager for Sunny Valley Organics Inc., Nogales, Ariz., said despite the economy he’s seen double-digit growth for certain categories, namely heirloom tomatoes and bell peppers.
“We’ve seen (up to) 24% growth from last season to this season for those,” he said.
Despite the growth companies have seen so far, they expect even more as the economy continues to improve.
“There has always been a core group buying organics week in and week out,” Roberts said. “It’s the next group that’s growing, the ones that now have a bit more disposable income.”
The improvement of the economy should help with organic sales, since they still come at a premium cost.
“I think everyone would like to see organics increase, but it’s based on the price differential,” said Ian Zimmerman, operations manager for Maurice A. Auerbach Inc., South Hackensack, N.J.
“Our organic shallots are almost double the cost of our conventional, and that is not something a consumer will easily move to in this economy,” Zimmerman said.
Roberts also expects this second set of organic buyers to increase consumption as organic availability increases.
“As we see better production and yields, it puts a better value on it for them, so the growth is really a combination of increased demand and supply,” he said.
Figuring the numbers
Those higher yields and increased production are sometimes difficult to accurately measure.
For example, Luis Acuna, president of CF Fresh Inc., Sedro-Woolley, Wash., said weather plays an important role in determining production, despite increased plantings or other expansions.
“We have had our setbacks in terms of yields,” he said, referencing the East Coast apple shortage. “But the trend is still growing.”
Several studies have been publicized that help demonstrate these increases, including the U.S. Department of Agriculture’s National Agriculture Statistics Service’s “2011 Certified Organic Production Survey,” released in October.
“With over $3.5 billion in total farm-gate sales, organic ranks fifth among commodity classes and is larger than peanuts and cotton combined,” said Christine Bushway, chief executive officer and executive director of the Brattleboro, Vt.-based Organic Trade Association.
Other results published in the USDA survey include that certified organic farms generated $1.1 billion in vegetable sales and $494.8 million in fruit sales. Organic berries accounted for $125.3 million in farm sales.
Room for growth
“Prior to the economy dipping from 2002-08, the organic industry was on a roll, growing at a nearly 20% clip,” said Simcha Weinstein, director of marketing for Albert’s Organics, Bridgeport, N.J.
Since then, the growth has slowed, though it has remained around 9%, a higher rate than the overall food industry, according to Weinstein. However, he said he expects the rate to increase.
“We expect that the organic food market will surge at a (compound annual growth rate) of around 14% during 2011-15,” he said, referencing a study by RNCOS, a market research and information analysis company based in Noida, India.
Others agree that coming years look to be profitable.
“Despite the recession we’ve been experiencing in our country, I feel very optimistic about the growth of the organic market,” said Denise Ryan, external relations director for the Organic Farming Research Foundation, Santa Cruz, Calif. “It’s an extremely exciting opportunity for America. It’s unique that we are in an economic situation where we have demand exceeding supply.”
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