US organic food sales are growing significantly ahead of the wider market. But lingering confusion over the meaning of “organic” in the country is a challenge the sector must grapple with if it is to accelerate expansion, Katy Askew suggests.
Organic sales are performing strongly in the US. New data from the Organic Trade Association (OTA) reveals the organic market saw its fastest growth rate in five years in 2013, jumping 11.5% to US$35.1bn compared to $31.5bn in 2012. Food sales totalled $32.3bn in the period, accounting for around 92% of the total.
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Fruit and vegetables account for the lion’s share of organic sales at $11.6bn, up 15% on the year. Condiments rose 17% from a relatively small base, snack sales increased 15% to $1.7bn, organic bread and grain sales rose 12% to $3.8bn and meat, poultry and fish organic sales rose 11% to $675m.
The market now accounts for more than 4% of the $760bn annual food sales in the country and the sector is growing its share of the market. Since 2010, organic sales have on average seen an annual growth rate of around 10%. This compares favourably to the wider food industry, which saw sales grow by a little over 3% during that same period.
The data, released yesterday (14 May), is encouraging news for organic manufacturers. Better still is the suggestion that growth rates over the next two years will “at least keep pace” with the 2013 clip and “even slightly exceed it”.
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According to Laura Batcha, CEO of the OTA, organic sales are benefiting from growing awareness around health and wellness issues. “Consumers are making the correlation between what we eat and our health, and that knowledge is spurring heightened consumer interest in organic products,” she says.
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By GlobalDataThe US has seen an explosion in discourse around what is in food and how it is produced. The battle over labelling GMOs, for instance, is making national headlines.
A growing awareness of how food is produced can only be to the profit of the organic sector – whose message is fully-focused on what has gone into its products.
However, the voice of the organic movement is at risk of getting lost in the babble. Competing labels such as “natural” and the ongoing war over GMOs are at risk of overshadowing the organic sector. And – as in other markets – there is lingering confusion around what organic certification actually represents.
“The entire organic industry needs to rally around helping consumers better understand and appreciate all the values that certified organic brings to the table,” Batcha suggests.
Significantly, the organic sector has a huge opportunity to expand the pool of consumers it draws on.
More than 80% of US families “sometimes” buy organic. However, according to research from IRI and SPINS, 46% of the sector’s total sales originate with just 18% of consumers. This means that a large majority of consumers are yet to reach their purchase potential.
Communicating the distinct qualities of organic foods to these – increasingly engaged – consumers will be key to tap into this potential.
