U.S. ORGANIC FOOD AND BEVERAGE SALES GREW 5.1% TO $24.8 BILLION IN 2009

U.S. organic food and beverage sales grew 5.1% to $24.8 billion, last year, according to the Organic Trade Association (OTA). OTA's annual data are based on surveying manufacturers, distributors and retailers

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OTA's "2010 Organic Industry Survey" shows organic fruits and vegetables realized the greatest growth last year: up 11.4%, to $9.47 billion.

That means that organic produce not only represents 38% of all organic food sales, but 11.4% of all U.S. fruit and vegetable sales, according to the association. In comparison, in 2000, organic fruit/ vegetable sales totaled $2.55 billion, or just 3% of total fruit/ vegetable sales, OTA reports.

Other organic categories' sales last year, according to OTA: dairy, $3.57 billion; packaged/prepared foods, $3.55 billion; beverages, $3.27 billion; breads/grains, $2.83 billion; snack foods, $1.14 billion; condiments $521 million; and meat/poultry/fish, $456 million.

OTA estimates the total U.S. organics product market -- including food and beverages and non-food products such as supplements, personal care and clothing -- grew 5.3%, to $26.6 billion. OTA puts total non-foods organic product sales at $1.8 billion, representing 9.1% growth over 2008.

OTA pointed out that total U.S. food sales saw growth of just 1.6% last year, and total non-food product sales declined by 1%. "These findings are indicative that even in tough times, consumers understand the benefits that organic products offer and will make other cuts before they give up products they value," said OTA Executive Director Christine Bushway.

Still, last year's 5% organic F&B growth represented a definite softening compared to the robust, double-digit growth of recent years. Last year's OTA industry survey showed organic food sales growth of 15.8% in 2008.

Nutrition Business Journal, a research/publishing/consulting group serving the nutrition, natural products and alternative health care industries, recently estimated that the total organic industry (including food and beverages and non-food products) grew 5.5% (to $24.4 billion) last year.

In comparison, the total organic industry grew by 13% in 2008 and 19% in 2007, according to NBJ. "Some organic categories, including snack foods and beverages, could barely tread water last year, while organic dairy and packaged and prepared foods actually slipped into negative sales territory," noted these researchers. However, NBJ predicts a return to stronger organic growth levels as the economy improves.

Last month, Mintel said that 21% of organic food buyers have reported reducing or eliminating organic purchasing due to budget tightening, and 20% have reported switching to cheaper organic options. (U.S. consumers are not alone: In the U.K., a very strong market for organic products, a just-released Organic Market Report shows overall organic product sales down 12.9%, and organic dairy, fruit/vegetables and fresh meat down 6.5%, 14.8% and 22.7%, respectively, according to The Guardian.

However, Mintel also found that 48% of U.S. organic purchasers were buying as much or more organic food as before the recession and that 35% of Americans as a whole indicate willingness to pay more for "environmentally friendly" products.

Mintel also reported that analysts are predicting that organic-plus-"natural" F&B (a considerably broader product universe than OTA's certified-organic data alone) will grow by nearly 20% between 2010 and 2012. Mintel put organic-plus-natural growth at 1.8% for 2009.

OTA reports that more than half (54%) of all 2009 U.S. organic food sales were through mass-market grocers, club stores and retailers. Natural retailers were next, with 38% of total organic food sales. Although still representing a small percentage of sales, farmers' markets, co-ops and community-supported agriculture operations "gained a lot of interest as consumers increasingly look for locally and regionally produced organic foods," the association added.

In the non-foods sector, supplements increased 12%, to $634 million, to represent 35% of total organic non-food sales, OTA reported. Organic fiber (linen and clothing) totaled $521 million (up 10.4%), and personal care products reached $459 million (up 3.7%).

COMMENTARY:  Was just talking with an entrepreneur testing a new product through Whole Foods.  No wonder Whole Foods is doing so well. They are in the right market, at the right time. That's a lot of organic bananas.

Courtesy of an article dated  

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