Clean, transparent, fresh, sustainable. Environmentally friendly, animal humane, high quality, social activism. Those traits are all identified with organic, and in 2018, they all helped push organic sales to unprecedented levels. In fact, the U.S. organic market in 2018 broke through the $50 billion mark for the first time, with sales hitting a record $52.5 billion, up 6.3% from the previous year, according to the “2019 Organic Industry Survey” released by the Organic Trade Association (OTA), Washington, D.C.
New records were made in both the organic food market and the organic non-food market. Organic food sales reached $47.9 billion, for an increase of 5.9%. Sales of organic non-food products jumped by 10.6% to $4.6 billion. The growth rate for organic continued to easily outpace the general market. In 2018, total food sales in the United States edged up just 2.3%, while total non-food sales rose 3.7%.
Millennials are pushing for transparency and integrity in the food supply chain, and are savvy to misleading marketing. The USDA Organic seal is gaining new appeal, as consumers realize that organic is a certification that is not only monitored and supported by official standards, but is also the only seal that encompasses the spectrum of non-GMO, no toxic pesticides or chemicals, dyes or preservatives.
Plus, nearly 5.7% of the food sold in this country is now organic.
"Organic is now considered mainstream. But, the attitudes surrounding organic are anything but status quo," says Laura Batcha, chief executive officer and executive director. "In 2018, there was a notable shift in the mindset of those working in organic toward collaboration and activism to move the needle on the role organic can play in sustainability and tackling environmental initiatives. Activism is a natural reaction from an industry that is really close to the consumer. When we are in an environment where government is not moving fast enough, the industry is choosing to move to meet the consumer rather than get stalled."
Produce still reigns supreme
Still the stalwart of the organic industry, sales of organic fruits and vegetables rose to $17.4 billion in 2018 for a 5.6% rate of growth, on par with the growth attained in 2017. By comparison, the overall fruits and vegetables category, including both organic and conventional products, grew by just 1.7% in 2018.
Fruits and vegetables now account for 36.3% of all organic food sales. Organic fruits and vegetable make up close 14.6% of all the produce sold in the United States, and have nearly doubled market share in the last 10 years.
Popular in the organic produce aisles are the classics like carrots, greens, apples, bananas. Also hitting stride are organic berries, avocados, brussels sprouts, cauliflower and tropical fruits like mangoes and papayas. And, outside the fresh produce section, the frozen, canned and dried fruit and vegetable sections also made gains.
Innovation is key in the organic dairy market
Shoppers, especially young families, are increasingly seeking out products made from high-quality simple ingredients from brands committed to sustainable agriculture and environmental benefits. Those shoppers turn to organic dairy as a trusted clean product free of antibiotics, synthetic hormones and chemicals. But, growth in the U.S. dairy sector slowed for the second straight year due largely to shifting diet trends. Still the second-largest organic category, dairy and egg sales were $6.5 billion in 2018, up 0.8% from 2017.
Although growth in organic egg sales slowed from the strong double-digit growth seen in the first part of this decade, the $858 million category still grew by a solid 9.3% in 2018. As more consumers get into organic, organic egg demand is expected to continue growing.
But, where skim milk and low-fat products were not so long ago favored by consumers, products high in healthy fats and protein are now popular. Many Millennials have also moved away from livestock-based products toward plant-based foods and beverages. In 2018, the industry responded with milk beverages with increased protein, more full-fat dairy products, new flavors and grass-fed products.
An organic outlook of innovation and activism
The outlook for organic is not without its challenges, but all expectations are that innovation and activism by the organic industry will continue to build, as the sector works to maintain the credibility of the Organic seal and the trust of consumers.
"Organic is in a unique and tough environment. The government is slowing the advancement of the organic standard, but the positive news is that industry is finding ways to innovate and get closer to the consumer without walking away from the organic program—the sector is innovating yet requiring that federal organic be in place," says Batcha. "So, whether it's grass-fed, regenerative or Global Organic Textile Standard-certified, they all have to be organic. The industry is committed to standards and giving consumers what they want."
This year's survey was conducted from January-April 2019 and produced on behalf of the Organic Trade Association by Nutrition Business Journal (NBJ). More than 200 companies completed a significant portion of the in-depth survey.