U.S. organic sales post new record in 2015

U.S. flag (Dave Bedard photo)

OrganicBiz staff

The U.S. organic industry set new records in 2015 with total organic product sales rising 11 per cent to US$43.3 billion, the Organic Trade Association’s (OTA) 2016 Organic Industry Survey reports.

The growth in organic sales far outstrips the three per cent annual growth in the overall food market.

Despite all the challenges, the organic industry saw its largest dollar growth ever. – Laura Batcha

An OTA release says that of the $43.3 billion in total organic sales, $39.7 billion were organic food sales and non-food organic products accounted for $3.6 billion, an increase of 13 per cent (all figures US$). Nearly five per cent of all the food sold in the U.S. in 2015 was organic.

Sales increased despite the sector’s continuing struggle to meet the “seemingly unquenchable consumer demand for organic,” the OTA said, noting that organic production continues to lag behind consumption in the U.S.

“The industry joined in collaborative ways to invest in infrastructure and education, and individual companies invested in their own supply chains to ensure a dependable stream of organic products for the consumer. Despite all the challenges, the organic industry saw its largest dollar growth ever. Organic will continue to be the most meaningful farm-to-fork – and fibre – system,” OTA’s CEO Laura Batcha said in a release.

Sales of organic produce, the largest organic category, rose 10.6 per cent. Almost 13 per cent of the produce sold is organic.

Sales of “fresh juices and drinks” saw explosive growth at 33.5 per cent, making it the fastest-growing of all the organic subcategories. The fastest-growing of the eight major organic categories was condiments, which crossed the $1 billion mark in sales for the first time in 2015, on 18.5 per cent growth.

Dairy, the second biggest organic food category, accounted for $6 billion in sales, an increase of over 10 per cent. Dairy accounts for 15 per cent of total U.S. organic food sales.

“Farm fresh foods – produce and dairy – are driving the market. Together, they account for more than half of total organic food sales,” Batcha said. “The organic market looks like a healthy plate.”

The survey found that even when it came to snacks, more Americans are choosing organic. Sales in that category have grown 14 per cent since 2014 to $2.3 billion.

The 13 per cent growth in organic non-food products was led by organic fibre, followed closely by organic supplements.

The OTA release said the increased consumer demand for organic products in 2015 could also be attributed to greater access to these products from mainstream retailers. As supermarkets, big box stores, membership warehouse clubs, and other outlets continued to up their organic offerings, organic options have become more available than ever before.

The growth in the organic market, however, did not come without continued challenges to the supply chain. Dairy and grains were two areas where growth could have been even more robust in 2015 if greater supply had been available. There is an industry-wide understanding of the need to build a secure supply chain that can support demand. This goes hand-in-hand with securing more organic acreage, developing programs to help farmers transition to organic, and encouraging new farmers to farm organically.

Some companies are dealing with these supply issues individually. Meanwhile, others are working together to address this concern.

One example is the U.S. Organic Grain Collaborative, whose members include Annie’s, Stonyfield, Organic Valley, Clif Bar, Nature’s Path and Grain Millers, among others. On the fibre side, 2015 saw the creation of OTA’s Organic Fiber Council, which includes members from across the organic fibre industry, and whose focus is to increase the awareness of the benefits of organic fibers and to encourage more organic cotton acreage in the U.S.

Despite strategic challenges, OTA’s Batcha is confident about the industry’s future prospects. “Organic is a bright spot in agriculture and the economy of America. Our success will continue to be built on a solid foundation of stakeholder engagement, transparency and meaningful organic standards that consumers trust in.”

OTA’s 2016 Organic Industry Survey was conducted and produced on behalf of OTA by Nutrition Business Journal (NBJ). The survey was conducted from Jan. 7, 2016, through March 25, 2016. More than 200 companies responded to the survey.

The Organic Trade Association (OTA) is the membership-based business association for organic agriculture and products in North America.