Organic food sales top $32 billion in 2013

by Eric Schroeder
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WASHINGTON — Demand for organic products continues to grow, as sales of organic products in the United States exceeded $35 billion in 2013, up 11.5% from 2012. The year-over-year change represents the fastest growth rate in five years, according to the latest survey on the organic industry from the Organic Trade Association (O.T.A.). Organic food sales accounted for $32.3 billion in sales, or about 92% of total organic sales in 2013.

The survey, which was conducted by the Nutrition Business Journal and included responses from more than 200 companies between Jan. 27 and April 4, projected growth rates over the next two years will at least keep pace with the 2013 clip and even slightly exceed it.

“The U.S. organic market is experiencing strong expansion, with organic food and farming continuing to gain in popularity,” said Laura Batcha, executive director and chief executive officer of the O.T.A. “Consumers are making the correlation between what we eat and our health, and that knowledge is spurring heightened consumer interest in organic products.”

Organic food sales now account for more than 4% of the $760 billion annual food sales in the United States, according to the O.T.A., and the growth rate of organic food sales has averaged almost 10% every year since 2010. By comparison, the average annual growth rate of total food sales has been just more than 3% during that same period, the O.T.A. noted in its survey.

Pacing organic food sales was the fruit and vegetable category, which turned in sales of $11.6 billion in 2013, up 15% from a year ago. 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 O.T.A. said.

The sharpest year-over-year growth occurred in the organic condiments category, which increased 17% to reach sales of $830 million. Also showing double-digit growth were 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 packaged and prepared food sector, up 10% to $4.8 billion.

Two categories of the organic food sector showed single-digit growth rates between 2013 and 2012, the O.T.A. said. The dairy segment was up 8% to $4.9 billion, and beverages increased 5% to $4 billion.

Despite the growing demand for organic, the O.T.A. noted several challenges that industry is facing, including lack of available farmland and lingering confusion among consumers about what organic means.

“The entire organic industry needs to rally around helping consumers better understand and appreciate all the values that certified organic brings to the table,” Ms. Batcha said. “Consumer education is critical to grow the organic industry.”
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