Organic Sector Posts Record U.S. Sales: Survey

The U.S. organic sector, already strong, remained on an upswing in 2016, gaining new market share and breaking sales records, according to the Organic Trade Association's (OTA) 2017 Organic Industry Survey, the results of which were revealed May 24 at the organization’s Annual Policy Conference.

Organic sales in the United States were around $47 billion in 2016, reflecting new sales of nearly $3.7 billion from the prior year. The $43 billion in organic food sales marked the first time the U.S. organic food market has surpassed the $40 billion mark. Organic food now accounts for 5.3 percent of total food sales in the United States, another first for the sector.

Organic food sales grew by 8.4 percent, or $3.3 billion, from the prior year, compared with 0.6 percent growth in the overall food market, while sales of organic nonfood products rose 8.8 percent in 2016, also versus overall nonfood growth of 0.8 percent.

"The organic industry continues to be a real bright spot in the food and ag economy, both at the farm gate and checkout counter," noted OTA CEO and Executive Director Laura Batcha.

The $15.6 billion organic fruit and vegetable business retained its position as the largest of the organic food categories, accounting for almost 40 percent of all organic food sales. With sales up 8.4 percent, compared with the 3.3 percent uptick logged for total fruit and vegetable sales, organic fruits and veggies now make up almost 15 percent of the produce that Americans consume, perhaps because it’s traditionally been the gateway category for shoppers new to organic, due to their ability to touch and smell the product and compare it with its conventional counterpart.

Meanwhile, sales of organic meat and poultry surged by more than 17 percent in 2016, to $991 million, the category's largest-ever annual gain. Continued strong growth in the category should lift sales past the $1 billion mark for the first time this year, OTA predicted. Additionally, rising awareness of such options as natural, grass-fed or hormone-free meats and poultry is driving consumer interest in organic meat and poultry items.

Even organic condiments saw spectacular sales: Dips reported an impressive 41 percent sales growth in 2016, to $57 million, while spice sales soared 35 percent to $193 million.

On the nonfood side, sales rose by almost 9 percent to $3.9 billion, with organic fiber, supplements and personal care products accounting for the majority of those sales. These purchases were spurred by consumers’ growing desire for transparency, clean ingredients and plant-based products is spurring sales of such product, as well as their belief that what they put on their bodies is as important as what they put in them.

"Organic products of all sorts are now found in the majority of kitchens and households across our country," said Batcha. "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."

Conducted in February and March and produced on behalf of OTA by Nutrition Business Journal, the survey received responses from more than 200 companies. The full report can be purchased online.

Washington, D.C.-based OTA represents more than 9,500 organic businesses in all 50 states. Its membership encompasses growers, shippers, processors, certifiers, farmers’ associations, distributors, importers, exporters, consultants and retailers, among others.