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The American certified organic marketplace sales hit $69.7B
 
By Doug Schmitz
Iowa Correspondent

WASHINGTON, D.C. – Dollar sales for the American certified organic marketplace hit $69.7 billion last year, up 3.4 percent, according to the 2024 Organic Industry Survey recently released by the Organic Trade Association at its annual meeting in Washington, D.C.
“In 2023, the increase in dollar sales in the organic market was driven more by pricing than unit sales,” the report said. “But that said, consumers boosted their purchases of many organic products. Increases in unit sales were reported for up to 40 percent of the products tracked in this year’s survey.”
Tom Chapman, Organic Trade Association co-CEO, told Farm World, the association’s organic industry survey is conducted at the produce category level.
“We aggregate (form or calculate by the combination of many separate units or items) the value together, and do not report below that level,” he said.
“However, we also include data from the Organic Produce Network’s State of Organic Produce Report that uses NielsenIQ retail scan data, SPINS (a Chicago-based provider of wellness-focused data and intelligence for the natural products industry) insights, and expert interviews,” he added.
“Based on those additional resources, the top-selling categories by sales were berries, packaged salads, and apples,” he said. “Top-selling categories by volume were bananas, berries and carrots. We do not track sales on regional and state basis.”
The report showed prices for many non-organic products climbed at a faster rate than organic products.
“This means the price gap between conventional and organic is closing, which should help fuel growth for organic products in 2024,” the report said.
Kathleen Delate, Iowa State University (ISU) professor of horticulture and agronomy, and an extension organic specialist, told Farm World, “There has been some lowering of organic prices due to imports coming into the U.S., but organic returns for farmers are still at least two times greater than conventional returns.
“Consumers continue to purchase organic foods due to placing value on crops grown without the use of synthetic nitrogen and generating less pollution,” said Delate, who has farmed organically in Iowa, California, Florida and Hawaii.
“In our ISU organic research program, we grow organic corn, soybean, rye, red clover, and various vegetables in organic on-farm trials,” she said.
As an organic farmer, she added, “We love the survey and appreciate the Organic Trade Association’s efforts to track the organic industry. We are so excited to see that the industry continues to grow as consumers continue to purchase organic foods as part of their diets.”
The report said produce held its spot as the largest organic category in 2023, continuing to be the primary entry point for consumers into the organic market.
“Organic produce meets the consumer’s desire for clean, healthy food, and the importance of organic’s critical benefit of non-toxic, synthetic pesticides is easy to grasp when buying organic berries or carrots,” the report said.
According to the survey, in 2023, the produce category grew by 2.6 percent to $20.5 billion. Organic produce now accounts for more than 15 percent of total U.S. fruit and vegetable sales.
Top sellers in the organic produce section were avocados, berries, apples, carrots, and packaged salads, and organic bananas saw stronger growth in 2023 than non-organic bananas, the report said.
Chapman said, “Organic bananas saw stronger growth in 2023 than conventional bananas.” However, he added, “The industry faced inflation and rising input and labor costs, which impacted growers’ expenses, leading to higher prices at retail. Floods and unseasonal temperatures affected various crops, with some farmers reporting that flooded fields reduced their available acreage for planting.”
The report said the second biggest-selling food category in the organic aisles was what the industry is now calling ‘the grocery category,’ with sales of $15.4 billion for a 4.1 percent growth.
“This new category represents many of the products previously grouped under breads and grains, condiments, and packaged and prepared foods,” the report said.
“With 21 different subcategories, close to 40 percent of the sales in the grocery category were driven by the top three performers: in-store bakery and fresh breads, with sales of $3.1 billion for a gain of almost 3 percent; dry breakfast goods, up around 8 percent to $1.8 billion in sales; and baby food and formula, at $1.5 billion for a hefty gain of nearly 11 percent,” the report added.
The report said beverages were the third largest category for organic in 2023, posting $9.4 billion in sales, up 3.9 percent. While there was a surge in non-alcoholic beverages, organic wine sales were up 2.5 percent to $377 million, and organic liquor and cocktails.
Moreover, the fourth-largest category in the organic food market was organic dairy and eggs, up 5.5 percent, reaching $8.2 billion.
“Organic dairy and eggs now account for over 8 percent of all dairy and egg sales,” the report said. “Milk and cream sales were up almost 5 percent to $4.2 billion, and the organic dairy alternative category grew almost 14 percent in 2023 to around $700 million.”
The report said organic food sales in 2023 totaled $63.8 billion, and sales of organic non-food products totaled $5.9 billion.
“It is encouraging to see that organic is growing at basically the same rate as the total market,” Chapman said. “In the face of inflation and considering organic is already seen as a premium category, the current growth shows that consumers continue to choose organic amid economic challenges and price increases.
“Although organic is now a maturing sector in the marketplace, we still have plenty of room to grow,” he added.

6/17/2024