The Industry Grew 8% in 2016
Anyone who has gone to a store in the past 10 years can attest to the rapid expansion of organic foods in the U.S. From the shelves of big box stores to local farmer’s markets, organic is everywhere. Now, a new survey from the Organic Trade Association attempts to explain how much. Furthermore, it seems that consumer demand for organics is not just rising, but the industry is having a hard time keeping up.
The Numbers Are in for 2016
According to the Organic Trade Association (OTA) survey, total sales of organic products in the U.S. topped $47 billion in 2016. While this number is impressive unto itself, it really shines when compared with years past. Not only does that $47 billion represent an 8% growth over 2015, it shows exponential increases over even 10 years ago. In fact, organic sales hit just $18.2 billion in 2007 and were a paltry $3 billion in 1997.
These total numbers only tell part of the story of organics in America, however. The OTA also researched the ratio of food to non-food sales in the organic sector. While demand for organic personal care and home items also continues to climb, food sales are by far more impressive. In fact, in 2016, organic foods – both fresh and processed products – represented 5% of total food sales in the U.S.
Why Consumers Choose Organic
What we eat and why is a complicated question under any circumstances. But, without getting into the politics of food choice, it is important to note why so many consumers are turning to organic options. According to the OTA, the number one reason cited is “to avoid pesticides.” Furthermore, the OTA finds that most people start their organic journey with fruits and vegetables. This is because of the direct connection between these foods and pesticides.
In addition to produce, organic meats are another fast-growing segment of this market. In 2016, the sale of organic meat and poultry grew 17% last year.
Producers Struggle to Keep up with Demand
The USDA reports that organic foods have become so ubiquitous to the American market that 3 of 4 conventional grocery stores now carry them. However, regardless of how many more organic displays you see each week, demand is outstripping supply. According to the Organic Food Association, the U.S. has transitioned in recent years from exporting to importing organics. Reports from the USDA and others show that the U.S. imports some $1 billion of organic food annually. Most of this food comes from the European Union.
Organic Dairy Is Especially Hard to Find
Of all the struggling organic market segments, dairy products are having the hardest time keeping pace. This is because the strict rules of U.S. organic labelling forbids the use of many products common in dairy farming. This includes everything from synthetic growth hormones and antibiotics to non-organic feed grains. It is the later that presents the largest issue for U.S. dairy farmers.
The Costs of Organics
Consumers yet to make the transition to organic foods cite price as one of the leading factors preventing them from changing. And while, systematically, the higher cost of producing organic foods is easy to understand, it doesn’t take away from the fact that it limits market growth.
Another issue affecting price is the same supply/demand issue I discussed above. Currently, the United States reports some 10,000 farmers using 2.3 million acres of land for organic farming. By contrast, more than 140,000 farmers on 12.6 acres operate in the E.U. Part of the reason for these numbers is the hassle of converting fields from conventional to organic growing standards. As organic farmer Gary Wishnatzki reported to The Packer,
It’s difficult to take a field and transition it because of the costs of doing so. There’s no market, really, for transitional product, so it’s difficult to transition because you get diminished yields without the bump in price.
So the cost of becoming an organic operation is preventing farmers from entering the market, further exacerbating the pricing issue.
Have You Embraced Organics?
Of course, there are several workarounds for consumers committed to organics but watching their food budget. Growing your own food is probably the least expensive, though there is a time commitment. Joining local organic CSAs can also save a lot of money seasonally. Food co-ops are another option. Finally, importantly, the more organics enter the market, the more organic companies will compete for your business. Coupons, sales, and bargains on organic products from Annie’s, Cascading Farms, and other big producers are easy to find in our weekly listings.