Organic sales break $50b mark

Organic Trade Assn. reports sales up more than 6%, led by organic produce sales, followed by dairy and egg sales.

May 20, 2019

4 Min Read
Organic sales break $50b mark

The U.S. organic market in 2018 broke through the $50 billion mark for the first time, with sales hitting a record $52.5 billion, up 6.3% from the previous year, according to the 2019 "Organic Industry Survey" released May 17 by the Organic Trade Assn. (OTA).

New records were made in both the organic food market and the organic non-food market. Organic food sales reached $47.9 billion, an increase of 5.9%. Sales of organic non-food products jumped 10.6% to $4.6 billion. Almost 6% (5.7%) of the food sold in this country is now organic.

“Organic is now considered mainstream, but the attitudes surrounding organic are anything but status quo,” OTA chief executive officer and executive director Laura Batcha said. “In 2018, there was a notable shift in the mindset of those working in organic toward collaboration and activism to move the needle on the role organic can play in sustainability and tackling environmental initiatives.”

Produce still reigns supreme

Sales of organic fruits and vegetables, still the stalwart of the organic industry, rose to $17.4 billion in 2018 for a 5.6% growth rate, on par with the growth attained in 2017. By comparison, the overall fruits and vegetables category, including both organic and conventional products, grew by just 1.7% in 2018.

Related:Organic livestock feed demand driving need for wheat, corn, soybeans

Fruits and vegetables now account for 36.3% of all organic food sales. Organic fruits and vegetable make up close to 15% (14.6%) of all the produce sold in the U.S. and have nearly doubled their market share in the last 10 years.

Produce is a gateway to organic for consumers, especially Millennials and those with young families. Industry experts note that the more people learn about health and wellness, the more people buy fresh produce.

Innovation is key in the organic dairy market

Shoppers, especially young families, are increasingly seeking out products made from high-quality, simple ingredients from brands committed to sustainable agriculture and its environmental benefits. Those shoppers turn to organic dairy as a trusted, clean product free of antibiotics, synthetic hormones and chemicals. However, growth in the U.S. dairy sector slowed for the second straight year due largely to shifting dietary trends. Still, dairy and egg sales were $6.5 billion in 2018, up 0.8% from 2017 and the second-largest organic category.

Although growth in organic egg sales has slowed from the strong double-digit growth seen in the first part of this decade, the $858 million category still grew by a solid 9.3% in 2018. As more consumers gravitate towards organic, organic egg demand is expected to continue growing, OTA said.

Related:Organic industry launches fraud protection program

Where skim milk and low-fat products were favored by consumers not so long ago, products high in healthy fats and protein are now popular. Many Millennials have also moved away from livestock-based products toward plant-based foods and beverages. Experts say to satisfy today’s consumer, the importance of innovation in the organic dairy sector has never been greater. In 2018, the industry responded with milk beverages with increased protein, more full-fat dairy products, new flavors and grass-fed products.

Organic reaching far beyond food

Consumers are making the connection that the same reasons they choose to eat organic food apply to the non-food products they use -- whether it's napkins for their dinner table, food for their pets, lotions they put on their skin or the supplements they ingest.

In 2018, the organic non-food category reached $4.6 billion in sales, with a growth rate of 10.6%. This rate is both well above the 7.4% growth rate reported in 2017 and the 3.6% growth rate reported in 2018 for the overall non-food industry (conventional and organic combined).

The strongest growth came from fiber, the largest of the non-food categories, which accounted for 40% of the organic non-food market. In 2018, fiber recorded $1.8 billion in sales, up from $1.6 billion in 2017.

Organic outlook

The outlook for organic is not without its challenges, but all expectations are that innovation and activism by the organic industry will continue to build as the sector works to maintain the credibility of the organic seal and the trust of consumers.

“Organic is in a unique and tough environment. The government is slowing the advancement of the organic standard, but the positive news is that industry is finding ways to innovate and get closer to the consumer without walking away from the organic program; the sector is innovating yet requiring that federal organic be in place,” Batcha said. “So, whether it’s grass-fed, regenerative or Global Organic Textile Standard certified, they all have to be organic. The industry is committed to standards and giving consumers what they want.”

This year’s survey was conducted from January through April 2019 and was produced on behalf of OTA by Nutrition Business Journal. More than 200 companies completed a significant portion of the in-depth survey.

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