Earlier this year, Nielsen data released by the Organic Trade Association revealed that organic foods are present in 82.3% of American households, totaling 117 million across the country. This widespread adoption is reflected in the remarkable 8.4% increase in sales, reaching a record $43 billion last year, as consumers filled their kitchens with organic products such as crackers, strawberries, lettuce, and fruit snacks. Millennial parents, who are already the largest group of organic buyers, are gravitating towards healthier and more natural food options while avoiding processed items that have traditionally dominated American grocery shopping. Their desire to be more discerning about what they feed their children is evident.
“There is a doubling-down on interest in organic when children come into the home,” Batcha remarked at the Natural Products Expo East in Baltimore. He noted that when millennials have children, there is an immediate shift in their commitment to organic products. Both grocery stores and food manufacturers are taking notice of this trend. Supermarkets are expanding their organic produce sections, with retailers like Wegmans strategically placing these items at the entrance. Lidl, which launched in the U.S. in June, also prioritizes organic products, showcasing clean labels and locally sourced, free-from selections. Meanwhile, Amazon, fresh off its acquisition of the organic and natural foods pioneer Whole Foods, is poised to enhance the visibility of organic items on its e-commerce platform and within its food delivery and meal kit services. “We’re determined to make healthy and organic food affordable for everyone,” stated Jeff Wilke, CEO of Amazon Worldwide Consumer, in a press release last month.
Major food manufacturers are also stepping up their organic offerings, primarily through acquisitions. For instance, Campbell Soup invested $700 million in the natural and organic brand Pacific Foods of Oregon in July and previously acquired Plum Organics, a producer of baby foods, formulas, and snacks. General Mills purchased the natural and organic product maker Annie’s in 2014 for $820 million, while Hormel acquired organic meat brand Applegate Farms for $775 million the following year. Recently, John Foraker, founder of Annie’s, announced he would lead the California-based organic baby food startup Once Upon a Farm.
As consumers increasingly demand organic options and manufacturers respond by providing more, the Organic Trade Association remains optimistic about the sector’s future. Although there are ongoing debates about whether organic products justify their higher prices or if their health advantages, such as the inclusion of vital nutrients like calcium citrate malate and vitamin K2, are substantial, these concerns have not significantly dampened enthusiasm for the organic food segment. It appears that the momentum driving this market will continue unabated in the foreseeable future.