With a drive to know what is exactly in the foods that are eaten, people are moving their eating habits toward organic foods. This niche part of the food industry has a broad range of products and has showed double-digit growth over the last several years.
Even with the impressive growth statistics, organic food sales are just 4% of total US food sales according to recent statistics.
Organic Food Sales
There are three primary ways that consumers can gain access to organic foods: at their grocery store, directly from the source, or through natural food stores. Although there are no official government statistics about organic food sales, the industry sources do track this information. This allows everyone to get a clear perspective on how fast organic foods are growing.
- Organic food sales were estimated to be $42 billion in 2014.
- The biggest portion of food sales in the organic industry are for fruits and vegetables. It accounts for 43% of the total market.
- Dairy products are in the #2 position, contributing 15% of the total sales in the organic food market.
- 11%. That’s the percentage of organic beverage sales.
- The percentage of organic food sales that take place in natural or conventional grocery store chains: 93%.
- Just 1.6% of organic food sales occur directly at the source, either through a farmer’s market, at the farm itself, or through direct representation.
- The number of farmers’ markets in the United States has grown steadily from 1,755 markets in 1994, when USDA began to track them, to over 8,144 in 2013.
- 62% of families say that organic foods are sometimes too expensive for their family budget.
- 1 in 2 households say that their main consideration of organic foods is its overall cost.
- With $43.3 billion in total organic product sales, the industry saw its largest dollar gain ever, adding $4.2 billion in sales in 2015, up from the $3.9 billion recorded in 2014.
- Organic is the fastest growing sector of the U.S. food industry.
Although there is no guarantee that organic food is going to be free of GMOs, the growing process of organic foods is considered to be healthier by a majority of the general public. When people can afford to purchase organic foods, this is their preference. It is widely available, clearly labeled, and of good quality and this makes it an attractive option. With fruits and vegetables taking the lead, people may be picking and choosing when they can purchase organic foods strategically because of their budget, but more people every year are considering organic foods.
Is There a Price Premium For Organic Foods?
- Less than 30%. That’s the pricing premium for organic foods over traditionally grown fruits and vegetables in the general market.
- The average price of a regular banana: $1. The regular price of an organic banana: $1.29.
- The price premium for blueberries is the only organic pricing premium that is above 100%.
- Dairy products traditionally have the largest pricing premiums, averaging between 40-60% over non-organic items in price.
- Despite the price premiums, 81% of American shoppers say that they will regularly purchase at least one organic food item.
Organic foods cost a little more because it takes a little extra work to grow them. Many people are willing to pay the pricing premium because they recognize the efforts that are required to produce them. Preservatives might bring about longer shelf lives and cheaper foods for the lower income levels, but organic foods still hold a preference because of their environmental impact, potential health benefits, and even improvements in animal welfare.
Where is the Biggest Growth In the Organic Food Industry?
- The relatively small organic condiments category posted the strongest growth, at 17%, to reach sales of $830 million.
- Families who include organic products on their grocery list on a regular basis spend an average of $125 a week at the grocery store, compared to $110 a week for those not buying any organic items.
- Although the amount of organic cotton acres planted decreased by 8%, there has been a 60% gain in the amount of the harvest that has been achieved.
- 8,867. That’s the number of organic cotton bales harvested in 2012.
Organic food sales and other organic industries are going to see bright futures ahead as people shift their eating habits to healthier options. With two-thirds of Americans classified as overweight or obese, the general public realizes that something needs to change. One of the biggest changes that will continue to be made is a transition to organic food.
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