U.S. Organic Food, Beverage Sales Hit $43 Billion in 2016

U.S. Organic Food Sales Hit Record $43 Billion in 2016

Driven by increased consumer demand, sales of organic food and non-food products shattered records and gained new market share in 2016 ringing up a staggering $47 billion in U.S. sales, according to the Organic Trade Association's (OTA's) 2017 Organic Industry Survey. Of the $47 billion in total organic sales, $43 billion were organic food sales, up 8.4 percent from the previous year.

Organic fruits and vegetables retained its longstanding spot as the largest of all the major organic categories with sales of $15.6 billion, up 8.4 percent over 2015. Fruits and vegetables accounted for almost 40 percent of all organic food sales. At nearly triple the 3.3 percent growth pace of total fruit and vegetable sales, organic fruits and vegetables now make up almost 15 percent of the produce Americans eat.

Across all organic food categories, shoppers are placing high value on freshness and convenience. In produce, grab-and-go salads and ready-to-eat veggies (fresh or frozen), were top sellers. Consumers in recent years have sought clean products abundant in protein, and sales of organic protein-rich meat and poultry shot up by more than 17 percent in 2016 to $991 million, for the category’s biggest-ever yearly gain. Continued strong growth in that category should push sales across the $1 billion mark for the first time in 2017. Growing awareness of organic’s more encompassing benefits over natural, grass-fed or hormone-free meats and poultry is also spurring consumer interest in organic meat and poultry aisles. Organic dips posted 41 percent growth in 2016, with $57 million in sales, while sales of organic spices grew 35 percent to $193 million.

Increasing consumer awareness that what we put on our body is as important as what we put in our body is driving the growth in organic fiber sales, while a growing desire for transparency, clean ingredients and plant-based products is spurring sales of organic supplements and personal care products.

Sales of non-food organic products increased by almost 9 percent to $3.9 billion, with organic fiber, supplements and personal care products accounting for the majority of those sales. Adequate supplies of organic textiles are a continuing challenge in the organic fiber market; however, U.S. organic cotton farmers produced a record 17,000-plus bales in 2016, which should help alleviate some supply concerns.

"The organic industry continues to be a real bright spot in the food and ag economy both at the farm-gate and check-out counter," said OTA’s CEO and Executive Director Laura Batcha. "Organic products of all sorts are now found in the majority of kitchens and households across our country, but the organic sector is facing challenges to continue its growth. We need more organic farmers in this country to meet our growing organic demand, and the organic sector needs to have the necessary tools to grow and compete on a level playing field. That means federal, state and local programs that help support organic research, and provide the organic farmer with a fully equipped tool kit to be successful."

In recent years, "clean label" has come to the forefront of industry trends. However, elements of clean label, such as organic and non-GMO (genetically modified organism), have been part of the market vernacular for decades. And while, organic production methods disallow GMOs, "non-GMO" is trending as the go-to label claim, with U.S. retail sales of non-GMO food and beverages estimated to reach $330 billion by 2019. Download Food Insider Journal’s "Organic & Non-GMO: Exploring the Consumer Disconnect" issue that explores the disconnect among consumers about these different, yet complementary, certifications and terms.

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