(UPDATED May 24) Fresh fruits and vegetables continue to hold the top spot of organic food sales, according to the Organic Trade Association’s 20th annual survey on the sector.
Of the total organic fruit and vegetable sales in 2017 — $16.5 billion — 90% came from fresh produce sales, according to the association’s 2018 Organic Industry Survey.
The overall organic food market in 2017 saw a record $45.2 billion in sales. Organic Trade Association CEO and Executive Director Laura Batcha said “Organic has arrived. And everyone is paying attention,” in a news release.
As consumer interest in healthful products increases, fresh produce is reaping the benefits.
“Produce is a key entry point into organic, especially for young families and millennials,” according to the survey’s executive summary. “Innovation in produce has included increased availability of diverse offerings, cross merchandising to inspire shoppers’ creativity, and novel product size — from minis perfect for snacks and lunch boxes to jumbo-pack organic berries.”
As consumers translate “fresh” to mean “healthy,” non-perishables have upped their game, “fresh-ifying” in an effort to compete with produce and other perimeter departments at stores, according to the survey’s executive summary.
At the same time, perishables have a higher bar to leap in online sales, according to the survey’s summary, forcing perishables marketers to refine packaging in order to stand out.
New trends for the sector show that companies are taking cues from conventional fruits and vegetables. At The Packer’s Global Organic Produce Expo in January, companies displayed:
- Snack-sized greenhouse vegetables, including cocktail cucumbers and small specialty tomatoes;
- Pouch bags containing various fruits, from club apples to grapes;
- Convenience items such as wrapped microwaveable potatoes; and
- Specialty items like rainbow baby peeled carrots and shredded rainbow carrots; and
- Larger packs such as 2-pound clamshells of organic strawberries.
Even as the association reports a maturing of the overall organic market, with a slower growth than in previous years, at 6.4% the overall growth rate of all organic food sales still is six times that of conventional food sales (1.1%).
Although the 6.4% growth rate is the lowest since 2009, when it was 4.3%, 5.5% of all consumer food dollars went to organic food, an increase over 2016’s 5.2% and the highest in at least the past 10 years.
Sales of fruits and vegetables, in all forms, rose 5.3% from 2016, according to the OTA.
“The organic food market will see a steadier pace of growth as it matures, but it will continue to surpass the growth rate of the broader food market,” Batcha said in the release. “Demand for organic is flourishing as consumers seek out nutritious and clean food that is good for their health and for the environment.
“That demand is driving innovation, and there are now so many organic options that we can all eat organic for breakfast, lunch, dinner, snacks and everything in between,” she said in the release.
20 years later …
When the OTA’s Organic Industry Survey debuted in 1997, organic food sales were $3.4 billion. Since then, sales have exploded to almost 15 times that. In the past 10 years, the organic market has more than doubled.
In 2002, when the U.S. Department of Agriculture’s organic seal was introduced, organic sales (including non-food items) were $8.6 billion, compared to $1 billion in 1990, when the Organic Foods Production Act authorized the USDA’s National Organic Program.
The survey, released May 18, came a week after the USDA announced it was not pursuing a federal research and promotion order for organic products. The generic marketing order would have promoted organic similar to a brand and would have funded research projects chosen by a board that would have included members representing different segments of the organic industry.
The USDA cited a number of reasons cited from public comments on the proposal, including the method of assessing imports, the methodology to be used in the voting process, and the significant number of growers and handlers who would be exempt because they’d fall under the $250,000 gross sales threshold.
The OTA, which submitted comments with more than 1,200 certified organic operators named, said in a news release that it was “unfathomable that organic stakeholders will not be given the chance to cast their vote” on the program, which had been dubbed Gro Organic by the association.
“There is no question we need promotion for organic as consumers continue to demand food transparency,” Batcha said in the news release.