Sales of organic products in the U.S. jumped to $35.1 billion in 2013, up 11.5% 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 Assn. (OTA).
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.
Organic food sales in 2013, at $32.3 billion, accounted for roughly 92% of the total organic sales. Non-food organic products—including flowers, fiber, household products and pet food—are currently a very 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, said OTA.
OTA’s Organic Industry Survey is conducted and produced by Nutrition Business Journal. Over 200 companies responded to the survey, which was conducted from January 27 through April 4, 2014. Companies gave data on revenues reported, sales growth, revenue by product and sales channel breakdowns.
Organic food sales in 2013, at $32.3 billion, accounted for roughly 92% of the total organic sales. Non-food organic products—including flowers, fiber, household products and pet food—are currently a very 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 product breakdown of the organic food sector shows that the fruit and vegetable category continues to lead the sector with $11.6 billion in sales, up 15%. With more than 10% of the fruits and vegetables sold in the U.S. now organic, the $1.5 billion in new sales of organic fruits and vegetable represented 46% of the organic sector’s $3.3 billion in new dollars.
The relatively small organic condiments category posted the strongest growth, at 17%, to reach sales of $830 million. Also showing double-digit growth were the organic snack food sector, up 15% to $1.7 billion; organic bread and grain sales up 12% to $3.8 billion; organic meat, poultry and fish sales up 11% to $675 million, and the rapidly expanding organic packaged and prepared food sector up 10% to $4.8 billion, said OTA.
Just two categories of the organic food sector showed single-digit growth rates. The $4.9 billion dairy sector grew by 8%, and sales of organic beverages slowed to a 5% growth rate to around $4 billion.
OTA noted that as demand for organic grows and accessibility to organic products increases, the industry is facing some critical challenges. Farmland in the U.S. 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, said OTA. The message of the organic can be lost next to the presence of “natural” products and the long debate around GMOs. The group said that education is critical to growing the organic industry.