Produce continues to be the linchpin for organic sales.
Organic fruit and vegetables accounted for $5.5 billion in sales in 2016, which was 5% above the year before, according to the Organic Trade Association’s annual survey.
There’s no reason to anticipate the 2018 OTA report will be much different, suppliers say.
“We definitely do not see the organic category plateauing, but rather continuing to increase each year,” said Brian Vertrees, director of business development-West with Salinas, Calif.-based Naturipe Farms LLC.
The OTA noted that more than half of U.S. households purchased organic produce in 2016.
“Consumers continue to demand organically grown produce and millennials are the driving force behind this,” Vertrees said.
As young adults’ purchasing power increases, so do sales of organic produce, he said.
We definitely do not see the organic category plateauing, but rather continuing to increase each year.
“Berries are the second-largest organic produce item in dollar sales at retail, which emphasizes the importance of carrying them regularly to ensure a strong organic presence in the market.”
Vertrees said 2017 saw a 21% increase in organic berry sales at retail over 2016, the largest increase of any organic produce item.
The organic category shows no signs of leveling off, said Kristina Lorusso, regional business development director with the Los Angeles-based Giumarra Cos.
“Organic continues to be a growth category, and we don’t think it has plateaued yet,” she said.
“Organics are driving sales across various categories in the produce department. More and more consumers are demanding organics each day and they are looking for variety, as well as affordability and value, in organics.”
Young adults are a major driver of the category, said Chris Glynn, director of organics with Salinas-based vegetable grower-shipper Tanimura & Antle Inc.
“We continue to see it trending up as the new/younger demographics increases their demand,” he said.
“As the new group becomes parents, the thought of fresh and (healthy) food and environment continues to be a priority.”
As a result, sales are expected to continue on their upward trajectory, said Mayra Velazquez de Leon, CEO of San Diego-based grower-shipper Organics Unlimited Inc.
“(The) organic category has not plateaued. It continues to grow and now is being part of every single supermarket,” she said.
“It is a trend, a marketing tool, but it is also a new way of life. People are really eating healthier and considering sustainability as part of their everyday lives.”
Consumer confidence is a key to organics’ success, said Ray Wowryk, director of business development with Leamington, Ontario-based greenhouse vegetable grower-shipper NatureFresh Farms.
“The trend continues to show substantial growth within the organic peppers category, and it does not look like it will plateau anytime soon,” he said.
“Consumers increasingly want to purchase fresh produce grown in a way that they trust, and that is one of the biggest value-adds of organic vegetables. The category seems to be growing steadily in diversity, as well.”
More consumers are calling for organic product, and the industry is responding, said Jacob Shafer, spokesman with Salinas-based vegetable grower-shipper Mann Packing Co.
“We see the growth of organics in recent years as a key indicator for what consumers want moving forward, and that is why we have focused on expanding our line of organic products like the organic version of Mann’s Broccoli Cole Slaw, which last year celebrated its 25th anniversary at retail, and organic sugar snap peas,” he said.
“Overall supply is increasing dramatically, fueled by high returns to growers over the last 10 years,” Lutz said.
More is on the way, he said.
“There is a tremendous volume of fruit that is currently in transition that will be completing the three-year organic certification this harvest and next,” he said.
“We saw a big increase in production in Washington state this past year and the result has been downward pressure on f.o.b. pricing.”
That will continue, Lutz said.
“It will also have the impact of driving quality and cosmetic standards up ... which we’re already seeing,” he said.