In 2022, the United States witnessed a significant milestone in the organic food industry as sales surpassed $60 billion for the first time. This achievement is yet another testament to the unwavering strength of the organic sector. According to the Organic Trade Association’s 2023 Organic Industry Survey, the total organic sales, which include non-food products, reached a new high of $67.6 billion*. The survey was released on Wednesday.
Despite various obstacles, the organic market still managed to grow. Inflationary pressures had a tightening effect on consumers’ wallets, and supply chain disruptions caused by the pandemic and global political events created additional challenges. The grocery aisles were crowded with a proliferation of competing food labels, and there was a noticeable labor shortage felt by organic producers. Inflation had a significant impact on the organic supply chain, as well as the entire food supply chain, increasing costs and leading to higher prices in the grocery aisles. As a result, the organic sector mirrored the overall food industry, with the value of organic sales increasing, even though the growth in the sales volume of some categories stagnated.
In 2021, the sales value of the sector observed a growth rate of four percent, almost half the rate of growth in the current year. The sales of organic food reached a sum of $61.7 billion, whereas the organic non-food sales were valued at close to $6 billion. The aggregate value of sales for Certified Organic items now accounts for a total of 6 percent of food sales in the United States.
Tom Chapman, CEO of the Organic Trade Association, stated that organic products have proven to have resilience against economic turbulence. Despite the volatility of the economy, people in America are still committed to investing in their own health and, increasingly, in protecting the environment. Organic products have become the solution to these concerns. Chapman added that the fundamental principles that organic products uphold remain robust, and consumers have shown that they will continue to choose organic products because of the verified organic system that is better for people, the planet, and the economy.
The phrase “produce still leads organic” is a succinct statement that highlights the continued dominance of non-organic produce in the market. Despite the growing popularity of organic produce, non-organic options continue to hold the majority share of the market. This statement emphasizes the need for increased efforts to promote the benefits of organic produce and encourage consumers to make more environmentally conscious decisions.
The top-selling category of organic goods is organic produce, which is frequently the first organic product that new organic buyers purchase. It has managed to maintain its position as the best-selling category among all organic products. In the United States, sales of organic produce have amounted to $22 billion, comprising about 15 percent of all fruit and vegetable sales in the country.
In 2022, the organic beverage sector proved to be the second most successful organic category, accumulating a total of $9 billion in sales, which marks a 4% increase. Organic coffee, maintaining its rank as the most popular organic beverage, saw a rise of nearly 7% from the previous year, with sales amounting to almost $2.3 billion. Organic soft drinks and enhanced drinks also experienced a significant breakthrough, generating $503 million in sales, which marks a growth rate of almost 14%.
Angela Jagiello, who is the Director of Education and Insights for OTA as well as the overseer of the yearly survey, observed that organic beverages are on the rise. This is a category where consumers are open to trying new things and are not as concerned with price. The non-alcoholic trend had a significant impact on the success of soft and enhanced drinks. Many younger consumers are choosing to reduce or eliminate alcohol and are turning to these organic beverages as a more refined and celebratory option.
In the organic market, dairy and eggs were the third highest-selling category, generating $7.9 billion in revenue and increasing by 7 percent from the previous year. Currently, organic dairy and eggs make up almost 8 percent of the entire dairy and egg market. The rise in dollar sales for this category can be attributed to sustained demand and inflationary price increases. Organic yogurt and eggs saw double-digit growth, with organic yogurt sales increasing by more than 12 percent to $1.5 billion, and organic egg sales by 11 percent to approximately $1.2 billion.
As expected, the rate of growth in organic sales has decreased from the rapid pace experienced during the pandemic. Nonetheless, a vast array of organic products has shown exceptional growth as consumers integrate organic items more fully into their lifestyles. A few examples of this growth include a 13 percent increase in sales of organic baby food and formula, reaching a total of $1.4 billion. Additionally, organic rice, grains, and potato products have seen a growth rate of over 10 percent, totaling $387 million in sales. Sales of organic dips have also experienced significant growth, increasing by 18 percent to $194 million. Finally, organic pork sales have increased by more than 10 percent, reaching $63 million in total sales.
The sales of organic non-food items were dominated by organic linens and clothing, which accounted for 40% of all sales in this category. The total sales recorded for this subcategory amounted to $2.4 billion, reflecting a modest increase of 2.5%. Organic supplements, on the other hand, saw no significant fluctuation in sales, maintaining its steady sales of around $2 billion. Sales of organic personal care products, however, experienced a growth of over 5%, amounting to $1.2 billion.
The future of organic products is undoubtedly promising.
The triumph of organic products is not a recent phenomenon. Over the past decade, sales of organic goods have increased by over two-fold, indicating a surge in demand for such products in the United States. In 2018, the total sales of organic items surpassed the $50 billion landmark for the first time ever. Furthermore, the sales of organic food items reached the same milestone in 2019, just a few years ago.
