In no small way, fresh produce has opened up entire stores to organics, according to a new report from The Nielsen Co.
According to data Nielsen released in September, 88% of U.S. households have purchased organic food and beverages, and more will follow suit, as they seek out “healthy and clean options in food, beverages and non-food categories,” Nielsen said.
In the 52 weeks ended Sept. 2, dollar sales of UPC-coded organic products grew 9.8%, and unit volume increased 11.4%, Nielsen reported.
Produce has led the way, and it’s no accident, said Matt Lally, manager of Nielsen’s fresh growth and strategy staff.
“Produce is a natural gateway across the store,” Lally said.
There are numerous reasons behind that phenomenon, but organic versus conventional is easiest to understand in produce, he said.
“When you have products that have all these different ingredients, it’s less straightforward. It’s less simple than a single item that’s organic,” Lally said.
It also is easier for the shopper to kind of “mentally think through the organic process” in considering fruits and vegetables, he said.
Organic produce sales have grown steadily over the last decade or so, but there’s still plenty of room for further increases, Lally said.
“It’s still a relatively small part of the produce department. A lot of commodities are still underrepresented,” he said.
Growers have to make the investment to expand organic production, Lally said. “It’s not an easy decision — they have to be convinced of the return on their investment.”
That investment involves three years of transitioning soil toward organic certification, during which time produce must be grown following organic standards but must be sold as conventional produce.
“It takes time, but it does all start with supply, and if you think about the benefits of the organic experience, it’s really moved mainstream,” Lally said. “It used to be something available at your more premium stores, geared toward the more affluent shoppers. Now, it’s geared toward value and traditional grocers, and they’re offering it at more and more affordable prices.”
As organics grow, shoppers have more choices within the organic category, at least in some cases, Lally said.
Packaged salads made the first big sales splash in the organics category and, along with berries, remain a category leader, Lally said.
Sales of some conventional produce staples, such as bananas and herbs, have found new sales energy in the organic category, Lally said.
“It’s definitely a place where even mature-to-stabilized categories are able to generate new growth,” he said.
Major retail chains saw the potential of organics, and now have established organics labels, Monrovia, Calif.-based retail consultant Dick Spezzano said.
“Now, if you go to the major chains, they all have three or four organic items on ad all the time and not just the easy items like salads and carrots,” he said.
Grower-shippers have responded.
“Based on the request from our customers, we definitely believe that organic consumption is growing, and also growers are anticipating this and planning ahead in terms of growing more organic produce,” said Angela Gamiotea, marketing manager with Loxahatchee, Fla.-based J&J Family of Farms.
Nannette Richardson, vice president of marketing with Bonduelle Fresh Americas, parent company of Irwindale, Calif.-based Ready Pac Foods Inc., said her company has seen year-on-year organic sales growth of more than 10%.
“In retail, shopper dynamics are evolving — traditional grocery and mass-merchandise retailers now capture a fourth of consumer spend on organic, stealing from traditionally higher income channels like club and natural (stores), and opening accessibility to organic across the income spectrum,” she said.
Want to know more about organic produce? Register for The Packer’s inaugural Global Organic Produce Expo, Jan. 25-27, in Hollywood, Fla.