Until recently, shopping for organic foods required a special trip to a natural foods store or farmers market. As interest in organics grew, organic foods became widely available in conventional supermarkets, but premium prices meant only more affluent shoppers could afford them.
Today, shoppers can find an extensive selection of organic products in nearly 20,000 natural food stores and three out of four conventional grocery stores. Conventional retailers now outpace natural retailers for share of organic food sales. But perhaps the best testament to the growth of organics is their flourishing presence at “big box” and warehouse retailers that cater to price-conscious consumers. Walmart, Target, Costco and Sam’s Club are among the stores that sell a variety of organic groceries, and some have launched their own private label brands.
“Interest in organics started with upscale, educated consumers who take time to research products, but their popularity is getting more democratized across groups,” says Bridget Goldschmidt, managing editor at Progressive Grocer, a grocery industry publication.
Americans have indeed developed an appetite for organics — eight out of 10 parents purchase organic products “at least sometimes,” according to a 2013 survey by the Organic Trade Association, and fresh produce is the leading category of organic purchases.
Organics for All
Walmart, the nation’s largest grocer, made organic foods more affordable when it launched Wild Oats Marketplace Organic products in the spring of 2014. The line meets USDA guidelines for organic certification and features about 100 organic pantry staples, including pasta and pasta sauce, spices, canned beans and soups, peanut butter, salad dressing, snacks and cookies. But organic groceries are nothing new at Walmart. The Wild Oats line joins more than 1,600 available organic items including fresh produce, dairy, and national branded packaged goods. Wholesale heavyweight Sam’s Club, a division of Walmart Stores, Inc., also expanded its selection of organic foods in 2014 and plans to more than double it by the end of 2015.
Last year, low-cost grocer ALDI launched the SimplyNature brand of all-natural and organic products. Among the SimplyNature organic offerings are milk, frozen fruit, cereal, honey and energy bars. ALDI also sells organic bananas, apples, tomatoes, baby carrots and salad mixes. Shoppers seem to be noticing lower prices. In 2013, 62 percent of parents surveyed by the OTA said cost limited their organic purchases, but that number dropped to 51 percent in 2014.
Organic Means Green for Grocers
Why the surge in organic options at all price points? Quite simply, consumer demand transformed organic foods into big business. In 2013, organic sales reached $32.3 billion, representing more than 4 percent of the $760 billion annual food sales in the U.S., according to an industry survey conducted for the OTA by Nutrition Business Journal. Since 2010, organic food sales have enjoyed an annual average growth rate of almost 10 percent, which is about triple the rate of total food sales during that time. The growth rate of organic foods is expected to meet or exceed 2013 rates for at least two more years, according to the OTA.
Fruits and vegetables are the largest and fastest growing organic food category by sales. In 2013, produce registered $11.6 billion in sales, up 15 percent from 2012. More than 10 percent of the fruits and vegetables sold in the United States are now organic, according to the OTA survey.
The next most popular organic food categories by sales are dairy ($4.9 billion), packaged and prepared foods ($4.8 billion), beverages ($4 billion), bread and grains ($3.8 billion), snack foods ($1.7 billion), condiments ($830 million) and meat, poultry and fish ($675 million).
Driving the Demand for Organics
Concerns about health are driving consumer interest in organic foods, says Patty Packard, MS, RD, director of nutrition and regulatory affairs at Vestcom, a provider of retail shelf nutrition information. “The top organic shoppers are health conscious and convinced that organic foods and beverages provide benefits,” says Packard. “People want to provide for their families in the best way possible, and they perceive that organic foods are healthier.”
In particular, first-time parents are a key driver of the organic trend, says Progressive Grocer’s Goldschmidt. “Young parents are concerned about their kids’ health and what they feed them, leading them to switch to organics.”
Ninety percent of parents report choosing organic food products for their children at least sometimes, and almost a quarter of those parents say they always choose organic, according to a 2014 OTA survey. Also fueling the organic trend are consumer concerns about the environment, interest in where food comes from and how it was grown, and the desire for “clean” ingredient statements. “There’s a growing wave of socially conscious consumers who like to see companies do things that are good for the environment, especially concerning the health of kids and the community,” says Goldschmidt. “Offering organic options is part of that in their minds.”
The Consumer Learning Curve
The rising consumer interest in organics presents challenges for nutrition educators, as many shoppers misinterpret the term “organic.” Shoppers may assume that “organic” means “nutritious,” when this isn’t necessarily the case. “It’s important to point out that organic potato chips still contain calories and fat, and organic chocolate cake still contains calories, fat and sugar,” says Packard.
Shoppers also may not understand that the “USDA Organic” designation refers to a unique set of sourcing, growing, harvesting and processing methods, and does not mean that a product is healthful, more nutrient-dense or safer, says Molly McBride, RD, LD, corporate dietitian with Kroger, a supermarket chain that offers more than 35,000 natural and organic products, including its own Simple Truth Organic line. “Customers have called us asking about the BPA content in cans of our organic black beans, how our organic pumpkin seeds can be grown in China, or how food-grade waxes are allowed on organic produce because they believe the USDA Organic certification is immensely different than conventional foods and beverages,” says McBride. “Many times, an explanation about the differences between organic, natural and conventional foods is warranted so customers can make smart buying decisions for themselves and their families.”