Washington, D.C. – Organic sales in the U.S. hit a new record of $49.4 billion in 2017, up 6.4 percent from the previous year and reflecting new sales of nearly $3.5 billion.
According to the Organic Trade Association’s (OTA) newly released 2018 Organic Industry Survey, the organic food market hit $45.2 billion in sales, also breaking through to a new record for an increase of 6.4 percent. Sales of organic non-food products rose by 7.4 percent to $4.2 billion, setting another new benchmark.
The growth rate for organic food sales was less than 2016’s growth rate of 9%, which officials say was due to a markedly slow growth in the big organic dairy and egg category. However, it was well above that of the overall food market, which nudged up 1.1 percent.
Organic continued to increase its penetration into the total food market, and now accounts for 5.5 percent of the food sold in retail channels in the U.S.
“Organic has arrived. And everyone is paying attention,” said Laura Batcha, CEO and executive director of the OTA. “Our survey shows there are now certified organic products in the marketplace representing all stages of the life cycle of a product or a company -from industry veterans to start-ups that are pioneering leading edge innovation and benefits and getting shelf space for the first time. Consumers love organic, and now we’re able to choose organic in practically every aisle in the store.”
Some slowdown in the maturing organic market was expected. Batcha continues: “The organic food market will see a steadier pace of growth as it matures, but it will continue to surpass the growth rate of the broader food market. Demand for organic is flourishing as consumers seek out nutritious and clean food that is good for their health and for the environment. That demand is driving innovation, and there are now so many organic options that we can all eat organic for breakfast, lunch, dinner, snacks and everything in between.”
Fruits and vegetables continued to be the largest organic food category, recording $16.5 billion in sales in 2017 on 5.3 percent growth. Fresh produce accounted for 90 percent of organic fruit and vegetable sales. Sales of organic dried beans, along with dried fruits and vegetables, were a stand-out sub sector in the category, increasing by 9 percent and reflecting growing demand for legumes and plant-based products.
The organic dairy and egg category had one of its most challenging years in 2017. While still the second-largest selling organic category, sales of organic dairy and eggs grew just 0.9 percent to $6.5 billion. The slow growth in this key organic category acted as a drag on the growth of the overall industry.
While the organic industry worked to advance the Organic Livestock and Poultry Practices (OLPP) rule – requiring humane living conditions for livestock – to clarify required practices, the U.S. Department of Agriculture (USDA) abruptly withdrew the rule in 2017, as reported in WholeFoods Magazine. This may have led many consumers to question the meaning of the USDA Organic seal as it relates to dairy and egg products. This confusion and uncertainty dampened consumer demand for both organic eggs and organic dairy.