Private Label Buyer

Organic Sales Jump 5.3 Percent in '09

April 26, 2010

Despite the poor economy, U.S. sales of organic products continued to expand in 2009, jumping 5.3 percent to a record high $26.6 billion.

According to results of the 2010 Organic Industry Survey, released last week by the Organic Trade Association, Greenfield, Mass., organic food sales grew 5.1 percent last year to $24.8 billion, while sales of organic non-foods jumped 9.1 percent to $1.8 billion. In both categories, the organic segment significantly outperformed the non-organic segment (total food sales edged up only 1.6 percent last year, while total non-food sales decreased 1 percent).

"These findings are indicative that even in tough times, consumers understand the benefits that organic products offer and will make other cuts before they give up products they value," said OTA executive director Christine Bushway.

The most substantial gains were posted by organic fruits and vegetables, which represent approximately 38 percent of total organic food sales. According to the report, sales jumped 11.4 percent in 2009 to nearly $9.5 billion, boosting organic's share of total fruit and vegetable dollar sales to 11.4 percent. Across food and beverage categories, organic represents about 3.7 percent of total sales in the United States, up from just 1.2 percent in 2000, when the final National Organic Program rule was published.

In the non-foods segment, organic supplements posted the most significant sales gains (+12 percent to $634 million), the report said. Sales of organic fibers (linen and clothing) grew 10.4 percent to $521 million while sales of organic personal care products expanded 3.7 percent to $459 million.

Although private label organics "thrived" in center store last year as retailers expanded their store brand organic programs into new categories, private label organic sales in the meat, dairy and fresh produce departments shrank in 2009, the report said, citing widening price gaps between organic and conventional offerings in meat and dairy and the addition of more prepackaged branded items in produce. However, it continued, sales of private label organic condiments and snacks shot up 23 percent and 20 percent, respectively.

"Strong private label categories for the future include dry, bottled and canned products such as oils, peanut butter, crackers and cereal," the report said.

More than half (54 percent) of all organic food purchases were made in mainstream supermarkets, club stores and other mainstream retail outlets, the report continued. Natural retailers (38 percent) and farmers' markets, co-ops and community-supported agriculture (CSA) operations (3 percent) grabbed most of the rest.

For more information, or to purchase a copy of the report, visit www.ota.org.