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Newest OTA data: fresh produce continues to lead organic sales

by Christina DiMartino | January 17, 2010
"Our most recent statistics are from 2008, and 2009 reports will not be finalized and ready for release until April of this year," said Barbara Haumann, senior writer and editor for the Organic Trade Association in Greenfield, MA. "But based on the consistency of data over the past several years, we do have some insight into how the organic fresh fruit and vegetable market is faring. That information implies that fresh produce continues to be the leader compared to all other organic categories."

Ms. Haumann said that fresh produce is the gateway for consumers who are just beginning to purchase organic products. In 2008, total organic product sales were recorded at $22.9 billion, which reflected a growth rate of 6.3 percent over the previous year. It was one of the lower annual growth rates recorded in the past decade.

"Of that figure, fruits and vegetables represented approximately $8.5 billion, or 37 percent of total organic sales," she said. "The next highest category was dairy, representing 16 percent of organic sales. This indicates that fruits and vegetables continue to lead the way by a large margin."

Ms. Haumann added that she expects the figures for 2009, when compiled, to reflect that produce continues to be the leading organic category, even if the increases are at a slower rate because of the economic situation in the past year. There are changes, however, in how consumers are shopping for organics.

"People are using a number of economically advantageous ways to shop," she said. "They are looking for private brand organics, using coupons and watching for special offers," she said. "With more people cooking at home, and the national focus on nutrition and health, we feel the trend toward organics will continue."

In June 2009, the Organic Trade Association partnered with Kiwi magazine, a consumer interest publication that focuses on organic lifestyles, on a study titled "Into the Mouths of Babes."

Of the 1,197 readers of the magazine surveyed, 55 percent of parents said that their primary motivation to choose organic products is health related. They buy organic products because they believe them to be healthier for them and their children. Parents of very young children in particular -- those under three years -- are more likely to incorporate organic into their children's lives and do so most often for health-related reasons, perhaps reflecting the growing trend among parents to serve children organic as their first meals and to continue to expand that commitment as they grow.

The survey also showed that of all the lifestyle actions taken to maintain or improve overall health, such as nutrition, exercise, taking vitamins and reducing stress, the number one method chosen by those surveyed was eating organic foods.

Organic buyers overall are significantly more likely to make activities, including recycling, reducing energy use, volunteering time to communities and donating to non-profit agencies, part of their daily lives. This indicates that their decision to choose organic is part of a larger, conscious effort to be environmentally and socially responsible.

The survey did reveal some setbacks related to organic products. Parents who choose not to purchase organic products most often claim that price holds them back. About 50 percent said that they do not buy organic because they are too expensive. However, these parents are as likely to cite a lack of knowledge or desire to learn about organic as the primary reason why they have not entered the market.

Today, organic buyers are less limited to specific channels and are shopping in varied locations. Parents who buy organics do not limit their grocery shopping trips to only conventional supermarkets or mass merchandisers. Instead, they are significantly more likely to frequent a mix of retail outlets, including natural food chainstores, local health and natural food stores, farmers markets and neighborhood co-ops.

"There is some indication that the price margin between organic and conventional items is narrowing, and that too will be helpful to the organic market," said Ms. Haumann. "I recently saw raspberries at a major chain grocer. The conventional and organic packs were displayed next to each other and were differentiated by the color on the label: yellow for conventional and green for organic. They were priced exactly the same."

Ms. Haumann added that the 2008 survey showed that organics represented 3.5 percent of all U.S. food sales.

"Acreage continues to be transitioned to organic," she added. "When we ask manufacturers if they could sell more if they had more, they consistently say yes."

(For more on organic produce, see the Jan. 18, 2010, issue of The Produce News.)