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 may even slightly exceed it.
Organic food sales, at $32.3 billion, accounted for roughly 92% of total organic product sales in 2013.
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 inroads. Sales of non-food organic products, at almost $2.8 billion in 2013, have jumped nearly eight-fold since 2002 and have almost doubled in market share, OTA said.
OTA's "Organic Industry Survey" is conducted and produced by Nutrition Business Journal. More than 200 companies responded to the survey, which was conducted from Jan. 27 through April 4, 2014. Companies gave data on revenues reported, sales growth, revenue by product and sales channel breakdowns.
A product breakdown of the organic food sector shows that the fruit and vegetable category continued 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 being organic, the $1.5 billion bump in sales of organic fruits and vegetables 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, sales of which increased 15% to $1.7 billion; organic bread and grain sales rose 12% to $3.8 billion; organic meat, poultry and fish sales rose 11% to $675 million, and the rapidly expanding organic packaged and prepared food sector rose 10% to $4.8 billion, according to OTA.
Just two categories of the organic food sector showed single-digit growth rates. The $4.9 billion dairy sector grew by 8%, and organic beverages slowed to a 5% growth rate for sales of around $4 billion.
OTA noted that as demand for organic products 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 products. Furthermore, supplies of organic feed and 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, OTA noted. The message of the organic label can be lost next to the presence of "natural" products and the long debate surrounding biotechnology. The group emphasized that education is critical to growing the organic industry.