FOXBOROUGH, Mass. — Organic produce is a $5.7 billion industry, taking up almost a 10% share of all U.S. retail produce sales — and there’s no sign of this trend letting up anytime soon.
That was the optimistic statistic that Matt Seeley, cofounder and CEO of the Organic Produce Network, gave before he introduced Matt Lally, associate director of the Nielsen research firm, at the first New England Organic Produce Conference May 1. The event was organized by the New England Produce Council and Organic Produce Network.
“This is huge. Consumers today, particularly millennials, they want to know how this food is grown, where it’s grown, and what this is going to do to me and to my family,” Seeley said.
If organic sales continue the growth of the last five years, that $5.7 billion could rise to $6.17 billion in the next five years, conservatively, Lally told conference attendees. The data was collected as recently as a month prior to his presentation.
Understanding the way the market is changing will help those in the industry make better decisions about organic buying and marketing, Lally said.
He mentioned the 36% growth in meal kit delivery service sales in the past year, as well as the rising popularity of retail purchases through the click-and-collect system, where a customer buys the items online and then collects the groceries at the brick-and-mortar store.
Although less than 3% of grocery sales happen online, the click-and-collect method has almost tripled in the last two years — comprising 11% of online sales compared to 4% two years ago, Lally said.
Those are areas where organic sales can grow, he said.
It’s also important to understand what kinds of organic produce consumers want. Unlike the produce department as a whole, nearly 80% of organic sales is coming from packaged items, like salads, Lally said. Organic kale takes up more than 40% of total kale sales.
If a wholesaler or retailer doesn’t want to buy only the most popular organic items, these are the top 10 items by share, scored nationally:
The New England area’s rankings match the national trend. The highest organic sales rates are in the west and northeast regions of the U.S., Lally said.
“These are the questions you should be asking yourself now,” Lally said:
- Are you achieving your fair share of the sales, and if not, what different strategy are you going to take?
- Are you capitalizing on the holiday demand?
- Are you emphasizing the “right” assortment for your customers?
- Have you assessed and optimized the pricing of organic to conventional?
- Do you have a long-term plan in place to continue to grow your success?