Organic Food Sales Growth Rate Slows to 2% | The Salesmark

Organic Food Sales Growth Rate Slows to 2%

Organic Food Sales Growth Rate Slows to 2%

Organic food sales in the United States increased about 2% to $57.5 billion in 2021, according to the Organic Trade Association’s industry survey released May 31. Overall organic sales were over $63 billion thanks to a 2% increase. Non-food sales jumped 7% to $6 billion. The 2% increase compared with a 12% increase in 2020 when consumers loaded pantries during the COVID-19 pandemic Pantry-loading eased in 2021, which had a negative effect on organic food sales in the categories of packaged and prepared foods, frozen food, and canned food. At $57.5 billion, US organic food sales have more than doubled from $25 billion in 2011.

“Like every other industry, organic has been through many twists and turns over the last few years, but the industry’s resilience and creativity has kept us going strong,” said Tom Chapman, chief executive officer and executive director of the Washington-based association. “In 2020, organic significantly increased its market foothold as Americans took a closer look at the products in their home and gravitated toward healthier choices. “When pandemic purchasing habits and supply shortages began to ease in 2021, we saw the strongest performance from categories that were able to remain flexible, despite the shifting landscape. That ability to adapt and stay responsive to consumer and producer needs is a key part of organic’s continued growth and success.”

Sales of organic packaged and prepared foods declined about 5% in 2021 due to consumers shifting away from pantry-loading. Canned soups, nut butters, and pasta sauces, which saw the most growth spikes in 2020, experienced the largest decreases in 2021. One bright spot was organic baby food with sales increasing over 11% to $1.2 billion. Organic bread and grain sales decreased slightly, finishing at $6.2 billion in 2021. Sales of frozen and fresh bread increased by 1.6%. Sales declined in baking ingredients, pastas, rice, and other dry grains. The war in Ukraine and other domestic and international issues continue to constrain supply chains, according to the Organic Trade Association.

Organic snacks and beverages fared well in 2021. After snack sales contracted in 2020, they increased 6% in 2021 to $3.3 billion thanks in part to offices, gyms, and schools reopening. Organic sales of nutrition bars shot up 15% in 2021 to go over $1 billion in sales. Organic beverage sales increased 8% in 2021. As consumers transitioned to hybrid and work-from-home models, organic coffee sales increased 5% to go over $2 billion. Fruits and vegetables accounted for 15% of the total US organic product market. Sales in 2021 increased 4.5% to $21 billion. Fresh produce and dried beans, fruit, and vegetables drove growth. Sales of frozen and canned food declined as consumers reduced pantry-loading.

Organic meat sales increased 2.5% to nearly $2 billion in 2021 despite supply chain constraints and stricter rules for raising organic poultry, livestock, and seafood. Organic poultry sales increased 4.7% to surpass $1 billion. Organic dairy and egg sales were relatively flat in 2021 when compared with 2020 but were up nearly 11% when compared with 2019. A tight market for organic feed and challenging international supply chains contributed to higher prices and lower sales. “Organic’s ability to retain the market footholds gained during 2020 and continue to grow despite unprecedented challenges and uncertainty is a testament to the strength of our industry and our products,” Mr. Chapman said.

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