Organic sales estimates differ, but agree on growth - The Packer

Organic sales estimates differ, but agree on growth

04/28/2011 09:04:18 AM
Tom Karst

A late April report from the Organic Trade Association pegs organic’s share of the fresh fruit and vegetable market at nearly 12%.

But most industry sources doubt that figure.

While the OTA’s 2011 Organic Industry Survey  shows organic produce accounts for nearly 12% of all U.S. fruit and vegetable sales, retail data from the West Dundee, Ill.-based Perishable Group put the organic fresh produce share of the total retail produce market at only 5.4% in 2010.

And FreshLook Marketing data, which will appear in The Packer’s 2011 Guide, puts the number at 3.8% of total retail sales, excluding Wal-Mart.

Estimates on the size of the organic market from a group with a vested interested in the industry must be taken with a grain of salt, said Desmond O'Rourke, president of Belrose Inc., Pullman, Wash.

The 2008 USDA survey of land devoted to organic production tallied just 1% of the U.S. total farm and grassland, he said.

The value of organic apples may be somewhere around 7% to 8% of the industry total, O’Rourke said, and apples are on the upper end of fruits with substantial organic production.

One retailer said organic fresh produce sales can vary but rarely approach the level cited by the OTA survey.

“In most of our stores, organic sales in fresh produce are less than 3% of total fresh produce sales,” said Dan Sutton, director of produce procurement for Albertsons LLC, Boise, Idaho. “In areas with a higher concentration of consumers looking for organic products, the sales mix is much higher, but still nowhere near 11% on an annual basis.”

The OTA survey reports 2010 sales of organic fresh produce were up 12.2% compared with 2009, said spokeswoman Barbara Haumann. Organic fresh produce was $9.79 billion of consumer sales in 2010, according to the survey.

Reported U.S. gains in organic sales contrasted with reverses in another developed market. The United Kingdom’s Soil Association  reported a 5.9% decline in sales of organic products in 2010. The association attributed the decline to shaky consumer confidence in the economy.

The Perishables Group’s 2010 scan data showed total produce sales of $27.3 billion in conventional supermarkets in 2010, said Steve Lutz, executive vice president. A 5.4% share for organic translates into $1.47 billion in organic produce sales at conventional (excluding Wal-Mart and club stores) retail outlets.

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