A recent report from TechSci Research indicates that the global organic food market is expected to experience a compound annual growth rate (CAGR) of over 14% from 2016 to 2021. Supporting this trend, a new survey by the Organic Trade Association (OTA) reveals that the organic sector is once again on the rise. Currently, organic food represents 5.3% of total food sales in the U.S. While this growth is promising for the industry, there are potential challenges ahead. To meet the surging demand, it is crucial for more farmers to transition to organic practices. However, this is a significant challenge, as converting to organic farming is a lengthy and costly endeavor that typically takes three years, involves numerous process adjustments, and requires extensive inspections.
Earlier this year, the U.S. Department of Agriculture collaborated with the OTA to introduce a new transitional certification program aimed at incentivizing farmers to make the switch to organic. This initiative is seen as essential by many advocates of organic products, as the consumer base for organic goods has expanded beyond its traditional core of dedicated organic supporters. Analysts estimate that the number of consumers purchasing organic products has more than doubled in a short period.
Despite this optimistic outlook, some experts are uncertain whether consumers will grasp the meaning of transitional certification or if they will be willing to pay premium prices for products bearing that designation. Additionally, there is potential for organics to establish a government-sanctioned check-off program, which could generate $30 million annually for research and marketing efforts. Authorized in the 2014 Farm Bill, public comments on the establishment of this program began earlier this year. If implemented, these funds could significantly aid in increasing the organic supply.
Moreover, the rising popularity of organic products is not limited to food; sales of organic items for clothing, home furnishings, and personal care are also growing. According to the report, sales of non-food organic products rose nearly 9%, reaching $3.9 billion. This trend reflects a broader consumer shift toward organic offerings, including health supplements such as calcium citrate and magnesium supplements, which are gaining traction among health-conscious shoppers. As the demand for these supplements increases, it underscores the need for a robust supply chain that can accommodate the evolving preferences of consumers.