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Organic food sales break $35 billion mark

By Staff | May 27, 2014

WASHINGTON, D.C. (OTA) – American consumers have not had their fill of organic products yet.

Sales of organic products in the U.S. jumped to $35.1 billion in 2013, up 11.5 percent from the previous year’s $31.5 billion and the fastest growth rate in five years, according to the latest survey on the organic industry from the Organic Trade Association.

And the hunger for organic products is not expected to ease any time soon. The OTA survey projects that growth rates over the next two years will at least keep pace with the 2013 clip and even slightly exceed it.

“The U.S. organic market is experiencing strong expansion,” said Laura Batcha, executive director and chief executive officer of OTA, “with organic food and farming continuing to gain in popularity.”

OTA’s organic industry survey was conducted and produced by Nutrition Business Journal.

More than 200 companies responded to the survey, which was conducted this year from Jan. 27 through April 4.

Companies gave data on revenues reported, sales growth, revenue by product and sales channel breakdowns.

For information on how to purchase the full report, visit www.ota.com/bookstore/14.html.

Organic food sales in 2013, at $32.3 billion, accounted for roughly 92 percent of the total organic sales.

Non-food organic products – including flowers, fiber, household products and pet food – are currently a small part of the total organic market, but are making quick in-roads.

Sales of non-food organic products, at almost $2.8 billion, have jumped nearly eight-fold since 2002, and have almost doubled in market share.

A niche industry in the huge food sector just a decade ago, consumer purchases of organic food first broke through the $30 billion mark in 2012 and now account for more than 4 percent of the $760 billion annual U.S. food sales.

Organic food sales have averaged almost 10 percent every year since 2010, and have dwarfed the average annual growth of just over 3 percent in total food sales during that same period.

A product breakdown of the organic food sector shows that fruit and vegetables lead the sector with $11.6 billion in sales, up 15 percnet.

With more than 10 percent of U.S. fruit and vegetables now organic, the $1.5 billion in new sales of organic crops represented 46 percent of the organic sector’s $3.3 billion in new dollars.

The relatively small organic condiments category posted the strongest growth, at 17 percent, to reach sales of $830 million.

Also showing double-digit growth were the organic snack food sector, up 15 percent to $1.7 billion; organic bread and grains, up 12 percent to $3.8 billion; organic meat, poultry and fish, up 11 percent to $675 million; and organic packaged and prepared food, up 10 percent to $4.8 billion.

Two categories of the organic food sector showed single-digit growth rates.

The $4.9 billion dairy sector grew by 8 percent, and sales of organic beverages slowed to a 5-percent growth rate to around $4 billion.

But as demand for organic continues to boom and accessibility to organic products increases, the industry is facing some critical challenges.

U.S. farmland is not being converted to organic at the pace needed to meet the growing demand for organic.

Supplies of organic feed and organic grain have been tight and costly, which could limit growth especially in the organic dairy and meat sectors.

There is also lingering confusion among consumers about just what organic means.

The message of the organic can be lost next to the presence of natural products and the long debate around GMOs.

“The entire organic industry needs to rally around helping consumers better understand and appreciate all the values that certified organic brings to the table,” said Batcha. “Consumer education is critical to grow the organic industry.”

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