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Food for Thought: Organic Sales Grow to $35 Billion


Increased consumers awareness about health and environmental concerns helped propel U.S. sales of organic products 11.5% in 2013 to a record-setting $35.1 billion, up from $31.5% from the previous year, according to the 2014 Organic Industry Survey commissioned by the Organic Trade Association (OTA).

Organic food and beverage sales accounted for approximately 92%, $32.3 billion, of total organic sales, while the organic non-food sector reached $2.8 billion.

According to OTA, 2013 organic sales experience the fastest growth rate in five years, and the hunger for organic products is not expected to ease any time soon. In fact, OTA projects growth rates over the next two years will keep pace or slightly exceed the 2013 statistics.

What began as a niche industry in the huge food sector just a decade ago, consumer purchases of organic food first broke through the $30 billion mark in 2012 and now account for more than 4% of the $760 billion annual food sales in the United States. More telling, the growth rate of organic food sales, which has averaged almost 10% every year since 2010, has dwarfed the average annual growth of just more than 3% in total food sales during that same period.

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 United States 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 organic condiments category posted the strongest growth, at 17%, to reach sales of $830 million. Double-digit growth also was seen in 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 organic packaged and prepared food sector up 10% to $4.8 billion. Only 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.

But as demand for organic continues to boom and accessibility to organic products increases, the industry is facing some critical challenges. U.S. farmland 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.

Moreover, there is lingering confusion among consumers about just what organic means. The message of the organic can be lost next to the presence of “natural" products and the long debate around GMOs.

On May 9, Vermont Gov. Peter Shumlin signed the nation’s first no-strings-attached bill that requires GMOs in food to be labeled. Food manufacturers will have time to make the transition. Genetically modified foods will need to be labeled as of July 1, 2016. The GMO labeling party could be short-lived. Vermont officials expect legal challenges, which could include claims that the law violates the First Amendment. (Follow more regulatory and legal issues via Food Product Design’s Senior Legal Correspondent Josh Long’s blog “The Food Law Blogger".

The National Organic Program regulates all organic crops, livestock, and agricultural products certified to the USDA organic standards. Check out the Food Product Design Slide Show “Understanding Organic Certification" to learn more about the detailed process.

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