Despite the heftier price tag, sales of organic food items continue to rise. USA Today reports sales of organic food is up 8.4% over the previous year, hitting a record 43 billion in sales in 2016.
Consumers are most concerned with purchasing organic fruits and vegetables. According to the Organic Trade Association’s 2017 Organic Industry Survey, roughly 40% of all organic food sales were produce. That translates to about 15% of all the fruits and vegetables Americans eat.
- That level of spending is not expected to slow down. A recent TechSci Research report finds that the global organic food market is projected to grow at a CAGR of more than 14% from 2016 to 2021
Organic food is steadily making its way into the shopping carts of more consumers. Organic foods are in 82.3% of the country’s 117 million households. While that’s reason for organic producers to cheer, it still only represents 5.3% of total retail food sales in the U.S.
Consumers are clearly willing to pay more for organic food, but do they really know what they’re getting? There remains confusion between the labels "organic" and "natural" on food packaging. Organic certification is a process and means the product has no antibiotics, no artificial colors, no GMOs and no synthetic pesticides. Despite its popularity with consumers, "natural" has not been officially defined by the Food and Drug Administration, and the term has no consistent meaning.
Food manufacturers are wasting no time in jumping on the organic bandwagon. Coca-Cola has organic Honest Tea, Campbell Soup has the Plum Organics baby food line, and Hormel sells organic meat under the label Applegate Farms. Food giant General Mills is also expanding its organic products, which saw 350% growth over the last 5 years, according to the USA Today report. Amazon's $13.7 billion pending purchase of Whole Foods Markets also pushes this trend forward.
One group that’s having a harder time keeping up with increased demand for organic produce is the American farmer. The process of transitioning to organic is both expensive and lengthy, taking roughly three years. This often holds farmers back from making the change, though a new U.S. Department of Agriculture transitional certification may help those efforts.
Shoppers are willing to pay more for that bag of organic carrots, too. The Hartman Group, a food and beverage research firm, found that consumers are comfortable being charged more for organic food, especially when it comes to vegetables, fruit and poultry. Specifically, they found roughly 44% of shoppers are willing to pay up to 20% more for fresh, organic fruits and vegetables. Thirty-seven percent are inclined to fork over that much more for organic poultry, too. However, that number drastically drops off when it comes to pre-packaged goods like crackers and soy sauce.
That’s not stopping food manufacturers from cranking up production on organic and non-GMO sauces and condiments, though. A recent report lists demand for organic sauces and condiments as a trend that is building steam. It just may be a little while before demand for organic ketchup catches up with demand for organic blueberries.
But does consuming produce that’s never been exposed to pesticides truly have a lasting impact on health? Consumers think so, as they’re paying more to put organic spinach in their cart. When it comes to the experts, though, opinions are mixed.