Consumers remain committed to organic fruits, vegetables

( Photo: Wave break media micro)

Estimated reading time: 10 min. 11 sec. 

Overview: 

  • The continued growth of organics continues to gain strength;
  • Specifically, organic fruit had a particularly successful year, growing by 11.4%;
  • Berries, apples and bananas led the organic fruit category in dollar sales last year;
  • With healthy eating on many shoppers’ minds, salad blends, spinach and lettuce garnered 2021’s largest dollar sales in the organic vegetable category; 
  • Even as COVID-19 restrictions eased and restaurants reopened across the country, consumers continued to eat more meals at home in 2021;
  • Wellness remained a top priority for consumers last year as the pandemic continued, which inspired shoppers to seek out organic produce for its perceived health benefits; and, 
  • While consumers felt the effects of inflation in the fresh produce aisle, it had a greater impact on conventional commodities than their organic equivalents.

Consumers are not cutting back on their organic produce purchases despite rising costs because of inflation. In fact, shoppers have doubled down on their commitment to buying fresh fruits and vegetables grown without chemical fertilizers and pesticides. 

Organic fresh produce saw increases last year for both dollar sales and volume, according to IRI OmniMarket Integrated Fresh multi-outlet data for the year ending Dec. 26, 2021. Total dollar sales reached $7.63 billion, up 5.2% over the previous year, while overall volume sales increased nearly one percentage point to 2.7 billion pounds. In contrast, dollar sales for conventional produce increased just 2.3% over the previous year and volume sales declined 3.9%. 

“Organics in produce continue to gain strength as shoppers show a willingness to invest in products that align to wellness — better for you and better for the environment,” said Kate Allmandinger, Fresh Center of Excellence consultant at IRI. “While some categories are facing challenges, others are meeting the market with solutions and offerings that shoppers are looking for. As organics’ share of volume isn’t slowing down, there is plenty of opportunity for continued growth and success.”

Dan Mannella, organic produce buyer at Angelo Caputo’s Fresh Markets in Carol Stream, Ill., also saw consumers gravitate toward organic produce in 2021. “Last year, organic produce was up 2% over 2019 and 2020 as far as percent to total against conventional product,” he said. 
 
Fresh berries did particularly well in stores, he added, along with staple items such as celery, cauliflower and broccoli. Also in high demand were packaged produce offerings including standard carrots, baby carrots and grape tomatoes. “The top 20 items that you would normally sell in the produce department moved really well for organically grown,” Mannella said. 

Organic berries had a great year at Hy-Vee stores, based in Des Moines, Iowa, and organic salad mixes remained the grocer’s top-selling category. “We saw a significant increase in demand for organic produce,” said Jeff Mallory, vice president of produce, “to the tune of three times that of other categories.”

Blueberries
Photo: Nikol Aydonetsk, Adobe Stock

Fruit on Fire

While both the organic fruit and vegetable categories saw overall dollar sales increases in 2021, fruit had a particularly successful year. The fresh fruit category grew by an impressive 11.4% to reach $3 billion, according to IRI, while fresh vegetable sales increased 1.5% to $4.57 billion. Organic fruit sales volume grew 3.5% to 1.39 billion pounds, while organic vegetable sales dipped 2% to 1.32 billion pounds. 

Despite price increases for organic fruit that were nearly double those of vegetables, noted Allmandinger, consumers were not deterred from buying their favorite items. 

“Anecdotally,” she said, “shoppers may be less willing to give up the sweetness of a fresh strawberry or a bite of juicy watermelon, even at a higher price point.” 

Consumers were not quite as loyal in the vegetable department, however, and demonstrated a willingness to swap between organic produce items in order to cut costs. “Shoppers still needed those produce items to make the meal, and while some opted to buy smaller amounts or choose less-expensive alternatives,” said Allmandinger, “the majority continued to purchase.” 

Top Sellers

Berries, apples and bananas led the organic fruit category in dollar sales last year, according to IRI. Papayas saw the largest increase over the previous year, jumping 70%, followed by tangelos and coconuts at 69% each, and mandarins at 46%.

In the case of mandarins, increased availability in stores played a key role in the fruit’s success.

“More retailers carried organic mandarin varieties than in the prior year, and there were new products brought to market,” explained Allmandinger. “More impactfully, they were in stores longer than in the prior year.” Retailers carried mandarins for an average of 13 weeks in 2021, which was a 45% increase from 2020. “The higher availability paid off for retailers as shoppers showed a need for these products through their produce dollars.”

In volume sales, organic fruit gained 3.5% over the previous year to total 1.39 billion pounds. Berries, apples and bananas were the top sellers in volume, with mandarins (up 45%), coconuts (up 35%) and nectarines (up 31%) seeing some of the biggest gains.  

Baby spinach Photo by George Dolgikh
Baby spinach
Photo: George Dolgikh,
Adobe Stock

Vegetable Solutions

With healthy eating on many shoppers’ minds, salad blends, spinach and lettuce garnered 2021’s largest dollar sales in the organic vegetable category. At 458%, pumpkins saw the greatest dollar sales growth in 2021 because of surging prices fueled by bad weather, a nasty fungus that reduced yields and pandemic-related supply chain challenges. Corn and asparagus dollar sales also saw significant gains last year at 86% and 36%, respectively. 

By volume, vegetable staples including carrots, potatoes and onions led the category. Pumpkins saw the highest volume growth over the previous year, up 303%, along with corn at 64% and asparagus at 47%. 

In the conventional produce category, salad kits were among the year’s highest absolute dollar growth drivers in 2021, increasing 12% in dollar sales and 6% in volume. However, dollar sales for organic salad kits declined 15% last year and volume sales saw a 6% decrease. This was due more to availability issues than a lack of consumer demand.

“It may seem surprising, but the typical store only carries 2.4 organic salad kits on average compared to 30 conventional items,” Allmandinger said. “We are also seeing that conventional salad kits are really innovating to meet consumer demand in terms of creating products that offer solutions.” This includes items such as salad bowls and kits with protein, which were also big sales drivers last year. 

More Meals at Home

Even as COVID-19 restrictions eased and restaurants reopened across the country, consumers continued

home cooking
Photo: Kucherav, Adobe Stock

to eat more meals at home in 2021. This trend had a significant impact on produce consumption and sales last year as shoppers filled their carts with ingredients for their favorite recipes.

In a survey of more than 1,000 consumers, conducted last fall for The Packer’s Fresh Trends 2022 report, nearly half of respondents reported eating at home more often, and 29% said they bought more fresh foods — including fruits and vegetables — during the past year. 

“As we continue to see an elevated share of meals occurring in the home, products that offer solutions and excitement are continuing to drive growth,” Allmandinger said. These include items such as organic mandarins, berries and mixed fruit. 

Even at higher prices, shoppers are investing in products that help make meal preparation more convenient. This presents an opportunity in organic salad kits, which were eclipsed in sales last year by their conventional counterparts because of a lack of offerings in stores. 

Consumers also sought out organic produce as a way to create excitement in their meals. “We are seeing some of the highest-volume percent changes for products that add variety and flavor, including microgreens, mixed herbs, rhubarb, pomegranates and arugula,” Allmandinger said. “With more families cooking meals at home, experiential cooking ingredients in vegetables helped home cooks make flavorful meals from the comfort and safety of their kitchens.” 

As inflation increasingly impacts how shoppers choose to spend their food dollars, Allmandinger said she expects consumers to keep cooking more meals at home long into 2022. 

The Wellness Trend Continues

Wellness remained a top priority for consumers last year as the pandemic continued, which inspired shoppers to seek out organic produce for its perceived health benefits. 

fruit Photo: M. Studio, Adobe Stock
Photo: M. Studio, Adobe Stock

While the IRI team initially questioned whether the organic produce category’s growth was due to pandemic-fueled shortages of conventional products, they found that consumers had more compelling reasons to buy organic. 

“Shoppers increased their focus on wellness in their shopping behaviors, and organics’ share of produce volume continues to grow,” Allmandinger said. “Consumers have not faltered in their concerns over health and wellness throughout the pandemic, and organic produce continues to outpace conventional in terms of growth.”

Not only that, she added, shoppers are happy to pay more for it. “Consumers have continued to vote with their dollars when it comes to products that are better for you and better for the world.”

This has certainly been the case at Angelo Caputo’s markets. “A lot of people are looking into locally grown products because of the sustainability factor, and also looking for organic for the simple fact that it takes better care of the earth,” Mannella said. “People are more mindful not only of what they're putting into their bodies, but the planet that they're living on.” 

Mallory noticed an uptick in demand at Hy-Vee prior to 2020, and the trend has only gained momentum since the pandemic hit. 

“Many people had time to focus on their diet and made life-changing decisions,” he said. “For some, that meant moving to an organic lifestyle. Customers who previously purchased organics occasionally moved to full-time organics, and those who seldom purchased organics started to add more organics into their diet.”

Inflation Impacts

The annual rate of inflation in the United States spiked to 6.6% in late 2021 — the highest rate in more than 30 years — sending food prices soaring across the country. While consumers felt the effects in the fresh produce aisle, inflation had a greater impact on conventional commodities than their organic equivalents. Overall price per volume grew 10% in the 52 weeks ending March 30, 2022, according to IRI, yet the increase was only 5% for the organic produce category. 

Rather than cutting back on organic produce purchases to offset price increases, consumers are ramping up their commitment to the category. In 2019, organic represented 5.9% of produce volume. Its share grew to 6.1% in 2020, and in 2021, it increased again to 6.4%. In spite of rising costs for many items, organic now represents 7.2% of total produce volume.

“In total produce, we did see that specific crops were more impacted by inflation, especially those that have more supply chain touchpoints, such as tropical and specialty fruits,” said Allmandinger. These include unique items such as dragon fruit, guavas, passion fruit and jackfruit. “For many of these products, dollars continued to grow, but volume has been impacted.” 

In 2022 year-to-date, some of the highest pricing-by-volume increases for organic have occurred for limes at 36%, followed by cabbage at 20%, oranges at 16%, apples at 15% and avocados at 12%. “Even if volume was impacted for these items,” Allmandinger said, “dollars continued to grow and shoppers didn’t walk away from buying organic.”

When asked to comment on inflated food prices over the past 18 months, consumers surveyed for the Fresh Trends 2022 report said they utilized a variety of cost-cutting strategies such as cutting back on other areas of their budget so they could continue purchasing the same amount and types of food (43%) or simply buying less (30%) of their desired items. 

How consumers react to increased pricing also varies by product, depending largely on the type of produce and its initial cost. “Items like bananas, which are a low-cost produce item, experience very little sales impact to price increases,” Allmandinger said. “From the opposite side of the spectrum, premium items like cherries and kiwis can also handle price increases without losing sales because they offer a differentiated experience for the consumer.”

While Mannella said that inflation did drive up costs in the produce department, price increases were not limited to organic items. Instead of driving shoppers into the arms of conventional produce, which is typically less expensive than organic, it had the opposite effect.

“I think that actually helped people move over to organics because it brought the pricing a little closer to conventional,” he said. “When the price got a little closer, narrowing the gap, more people leaned toward organic.”

To keep the sales momentum going, he added, maintaining quality and variety are key factors, in addition to keeping cost differences between conventional and organic to a minimum. 

“Ninety-five percent of the produce you that you can buy as organic is also available as conventional,” Mannella said. “A lot of people now want to buy a full line of organic products, and as long as the quality is good and the pricing is comparable with conventional, they're more inclined to choose the organic option.”

 

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