The public interest in organic food significantly increased in the early 2000s as consumers recognized the link between diet, health, and environmental impact. Today, shoppers are gravitating toward clean labels and demanding transparency in their food and beverage choices, positioning organic products favorably to meet these expectations while fostering growth in an industry that urgently requires it. In 2016, organic food sales in the U.S. reached around $43 billion, reflecting a $3.3 billion rise from the previous year, as reported by the Organic Trade Association. Overall, organic products represented 5.3% of total food sales. Growth in this sector is not expected to diminish anytime soon; a recent TechSci Research report projected that the global organic food market will grow at a compound annual growth rate exceeding 14% from 2016 to 2021.
Laura Batcha, executive director of the Organic Trade Association, noted to Food Dive, “We’re witnessing innovations in baby and children’s foods, with evidence showing that healthier snacking continues to trend.” She emphasized the numerous opportunities available for both domestic expansion and the global export of organic products, particularly fresh items. Retailers are increasingly investing in organic options to meet this demand.
The movement towards organic farming, which emphasizes fewer chemicals, improved soil management, and biodynamic methods, is not a recent development; it can be traced back to the 1940s. Thus, organic farming represents a return to traditional practices, albeit enhanced by modern equipment, streamlined supply chains, and contemporary marketing strategies.
Taste and flavor have played crucial roles in the current organic trend. Initial consumer experiments with organic fruits and vegetables often led to claims of superior taste compared to conventional produce. Nutritional benefits also contribute to the growing popularity of organic foods, despite ongoing debates regarding their nutritional superiority over conventionally grown options. Many consumers are drawn to products that are cultivated without synthetic pesticides.
Regardless of the motivations for choosing organic, many consumers are trying these products and frequently becoming regular buyers. Some Americans even engage in growing their own food, participating in community-supported agriculture, and joining specialized produce buying clubs. While shoppers are often willing to pay a premium for organic labels, there remains a lack of clarity regarding the term’s actual meaning. Some consumers mistakenly equate “organic” with “natural” on food packaging. Organic certification specifies how a product is produced, mandating the absence of antibiotics, artificial colors, genetically modified ingredients, or synthetic pesticides. In contrast, the term “natural” lacks an official definition, despite efforts by the U.S. Food and Drug Administration to clarify it.
The confusion surrounding these terms—along with the myriad labels and seals found on food packaging—complicates the shopping experience for consumers. Consequently, some organizations are advocating for new organic certifications to bolster consumer confidence in the products they purchase. Batcha mentioned to Food Dive that the OTA is monitoring the marketplace use of the organic seal, working to minimize fraud, and ensuring continuous improvements in compliance with existing standards. “We are actively engaging with government and certification agencies to enhance all aspects of the industry,” she stated. “Our priority is to maintain the integrity of the organic seal, which is directly linked to the quality of oversight programs.”
The industry has occasionally faced challenges in producing sufficient supplies, with livestock producers resorting to importing organic feeds due to domestic shortages. Additionally, there is a need to convince consumers that the often higher prices of organic goods are justified. Part of the elevated costs is attributed to the necessity of growing, harvesting, processing, and transporting organic products separately from conventional foods. Furthermore, transitioning traditional farmland to organic practices requires time, during which producers must adhere to organic protocols without reaping the benefits of higher organic prices.
Chad Hart, an associate professor of economics at Iowa State University, explained the challenges farmers face during this transition period, noting that it takes three years to convert to organic. “Producers often grapple with the decision to experiment with organic farming or remain in conventional agriculture,” he said. As retailers and manufacturers broaden their organic offerings, competition drives ingredient prices up, providing financial incentives for producers to convert their land. Nevertheless, sourcing organic ingredients can be difficult, necessitating long-term planning for businesses.
A Walmart spokesperson revealed in 2015 that the retail giant collaborates with farmers and suppliers to specify its organic needs three to five years in advance, allowing farmers to plan and invest accordingly. Additionally, there is a pressing issue regarding the availability of labor, as the average age of farm operators is 58, according to the U.S. Department of Agriculture. “Acquiring land is one challenge, but finding farmers to cultivate it is quite another,” remarked Carl Jorgensen, a former organic farmer and director of global consumer strategy at Daymon Worldwide. “Organic farming requires different skills compared to traditional farming.”
Denise Morrison, CEO of Campbell Soup, acknowledged the challenges in sourcing fresh organic items while expanding its health and wellness portfolio. She recounted the initial difficulties the company faced when launching a new version of its Goldfish crackers made with organic wheat. “We had to trace back through the supply chain to ensure adequate quantities of organic wheat,” Morrison explained. “Now, it’s less of an issue because, with demand, supply follows.”
Following Hormel Foods’ acquisition of Applegate, a producer of organic and natural meats, CEO Jim Snee noted challenges in meeting consumer demand due to an underdeveloped supply chain. “When we acquired Applegate in 2015, the existing supply chain wasn’t equipped to support the business’s growth,” Snee shared. “Meeting organic standards complicates the supply chain, and there was a lack of producers we could connect them with.”
In response to the rising demand for organic food, the number of organic farms is increasing. A Mercaris report indicated that U.S. organic grain acreage grew by 30% in 2017 compared to the previous year. However, organic farms represent only 0.7% of total farming operations in the U.S., despite a rapid rise in land conversion to organic practices in recent years.
Grocery stores, food manufacturers, and other stakeholders reliant on organic products are collaborating closely with farmers to ensure future supply availability. In some instances, they cover the costs for producers to transition their land to organic and help them find consultants for the process. General Mills recently partnered with a South Dakota farm to convert 34,000 acres from conventional to certified organic by 2020, planning to use the resulting wheat in its Annie’s Homegrown product line.
According to Hart, General Mills’s initiative is a “feel-good” approach to test the market. “They are gauging consumer response and if the market supports it, they will expand their efforts,” he stated. Producers are assessing their capacity to cultivate a robust organic market.
New organic products are continually entering the market, such as Unilever’s Growing Roots line of organic snacks, and in January, 7-Eleven unveiled a range of organic, cold-pressed juices under its 7-Select Go!Smart private brand. These are just two examples of recent product launches.
Acquisitions also serve as a strategy for major food companies to expand their organic presence. General Mills acquired Annie’s in 2014, while Campbell Soup has strengthened its position by purchasing Plum Organics in 2013 and Pacific Foods of Oregon last summer. Recently, Nestlé announced its acquisition of a majority stake in Terrafertil, a South American manufacturer of organic and natural plant-based foods.
Investments in organic farming are also increasing, with more operations obtaining certifications and transitioning from conventional to organic methods, as reported by Sustainable Brands. The Organic Materials Review Institute (OMRI) has noted a rise in applications for product evaluations related to organic farming, indicating industry growth. “The increasing demand for the OMRI seal reflects the overall growth of the organic sector,” Peggy Miars, OMRI’s executive director, stated via email. “Consumers are actively seeking organic options in their food and fiber, while more individuals are adopting organic practices in their farms and gardens.”
There is no doubt that the demand for organic foods and beverages will persist, and manufacturers are discovering innovative ways to broaden their offerings. The organic sector is evolving, with new definitions, certifications, products, policies, and a diverse array of consumers being continuously integrated. “We are witnessing sustained growth, driven by demographic trends,” Batcha remarked. “Additionally, the accessibility and availability of products, along with increased awareness of what organic entails, are contributing to the rising consciousness of healthier choices among consumers.”
In this evolving landscape, companies can leverage products like Citracal D Maximum to highlight health benefits, encouraging more consumers to explore organic options.