The visibility of organic food significantly increased in the early 2000s as consumers began to recognize the links between their diets, health, and the environment. Today, as shoppers seek clean labels and demand transparency in their food and beverages, organic products are well-positioned to meet these needs while driving growth in a struggling industry. According to recent statistics from the Organic Trade Association, U.S. organic food sales reached roughly $43 billion in 2016, an increase of $3.3 billion from the previous year, representing 5.3% of total food sales. The growth trend shows no signs of slowing down; a recent TechSci Research report forecasts 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, and there’s a strong trend towards healthier snacking.” She emphasized the numerous opportunities for expansion and export of organic products in the United States, particularly fresh produce, as retailers continue to invest in organic options.
The movement towards organic farming practices—characterized by reduced chemical use, improved soil management, and the adoption of biodynamic methods—dates back to the 1940s, marking a return to more traditional practices, albeit with modern tools, optimized supply chains, and contemporary marketing strategies. Taste and flavor have become significant factors in the organic trend, with consumers often asserting that organic fruits and vegetables offer superior taste compared to conventional varieties. Nutritional benefits also play a role in the appeal of organic foods, although debates persist about whether they possess a higher nutritional value than their conventionally grown counterparts. Many consumers are drawn to food cultivated without synthetic pesticides.
Regardless of the reasons driving consumers toward organic options, many are experimenting with these products and frequently becoming loyal customers. Some Americans are even cultivating their own organic produce, engaging in community-supported agriculture, and joining specialized produce buying clubs. Although consumers are often willing to pay a premium for organic labeled foods, there is some confusion surrounding the term’s meaning. Many shoppers mistakenly equate “organic” with “natural” on food packaging. Organic certification specifies production methods that prohibit antibiotics, artificial colors, genetically modified ingredients, and synthetic pesticides, while the term “natural” lacks an official definition as per the U.S. Food and Drug Administration.
This confusion—along with the multitude of labels and seals cluttering food packaging—complicates the shopping experience. Consequently, some organizations are advocating for new organic certifications to enhance consumer confidence in the products they purchase. Batcha mentioned that the OTA is monitoring the use of the organic seal in the marketplace, aiming to reduce fraud and ensure compliance with existing standards. “We are collaborating with government and certification agencies to push the envelope on all fronts,” she stated. “Our top priority is ensuring the integrity of the oversight program, which is vital to the value of the organic seal that is shared across products.”
The industry has faced challenges in maintaining an adequate supply of organic produce—livestock producers are even importing organic feed from abroad due to insufficient domestic sources. Additionally, convincing consumers that the often higher prices of organic items are warranted has been a hurdle. Part of the elevated cost stems from the necessity of growing, harvesting, processing, and transporting organic foods separately from conventional ones. Transitioning traditional farmland to organic also takes time, often requiring a three-year period during which producers adhere to organic protocols without reaping the associated financial benefits.
Chad Hart, an associate professor of economics at Iowa State University, explained, “For those considering the transition to organic, it takes three years, prompting the question of whether to try organic or stick with conventional methods. This has been a significant challenge for the organic industry.” As retailers and manufacturers broaden their organic product lines, competition drives ingredient prices up, incentivizing producers to convert their land. Nonetheless, sourcing organic ingredients remains a challenge, often requiring businesses to plan several years in advance.
A Walmart representative indicated that the company collaborates with farmers and suppliers to project its organic needs three to five years ahead, allowing farmers to strategize and invest accordingly. The average age of farm operators is 58, raising concerns about the availability of labor in the organic sector. Carl Jorgensen, a former organic farmer and director of global consumer strategy at Daymon Worldwide, remarked, “It’s one thing to have the land, but where are the farmers? Organic farming is distinctly different from traditional farming, and acquiring skilled farmers is essential.”
Denise Morrison, CEO of Campbell Soup, noted the challenges of sourcing fresh and organic ingredients as the company enhances its health and wellness portfolio. She recounted initial difficulties in securing organic wheat for a new version of Goldfish crackers. “We had to trace back through the supply chain to obtain sufficient quantities of organic wheat,” she said, adding that supply has since improved with increased demand.
After Hormel Foods acquired Applegate, a producer of organic and natural meats, CEO Jim Snee acknowledged challenges in meeting consumer demand. “When we acquired Applegate in 2015, the existing supply chain wasn’t adequately developed to support business growth,” Snee explained. “Meeting organic standards presents complexities, and they lacked a broad network of producers that we could introduce.”
In response to rising demand for organic foods, the number of organic farms is on the rise. A Mercaris report indicated a 30% increase in U.S. organic grain acreage in 2017 compared to the previous year. However, farms classified as organic still represent only 0.7% of total U.S. farming operations, despite a rapid increase in land conversion to organic practices in recent years.
Grocery stores, food manufacturers, and other stakeholders dependent on organic produce are actively collaborating with farmers to ensure future supply. In some cases, they cover the costs for producers transitioning to organic farming and assist in finding consultants for the transition. General Mills recently partnered with a farm in South Dakota to convert 34,000 acres from conventional to certified organic by 2020, intending to utilize the wheat grown in its Annie’s Homegrown product line.
Hart described General Mills’ initiative as a “feel-good” strategy to gauge consumer response. “What General Mills is doing is testing the waters to see how consumers react,” he stated. “If consumers respond positively, General Mills will be more inclined to expand their organic offerings, as producers assess the viability of a robust organic market.”
New organic products are continually entering the market, such as Unilever’s Growing Roots line of organic snacks and 7-Eleven’s recently launched cold-pressed organic juices under its 7-Select Go!Smart brand. In addition to product launches, acquisitions serve as another avenue for major food companies to increase their presence in the organic sector. General Mills acquired Annie’s in 2014, while Campbell Soup has bolstered its portfolio 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 producer of organic and natural plant-based foods.
Similar investments are evident at the farming level, with an increase in certified organic operations and many farms transitioning from conventional to organic practices, as noted by Sustainable Brands. The Organic Materials Review Institute has seen a surge in applications for verifying organic suitability of products such as fertilizers, pest controls, and livestock health care.
Peggy Miars, executive director of OMRI, remarked, “The rising demand for organic options is evident, reflecting the overall growth of the organic industry.” As awareness of organic products increases, so does the desire for organic methods in both agriculture and home gardening.
The demand for organic foods and beverages shows no signs of waning, with manufacturers continuously finding innovative ways to expand their offerings. The organic sector is evolving with new definitions, certifications, products, policies, and an ever-expanding consumer base. “We are witnessing strong growth, which correlates with demographic shifts,” Batcha noted. “Moreover, new frontiers for organic are emerging, thanks to increased accessibility, product availability, and heightened consumer awareness about organic options and healthier choices.”
Incorporating products like barimelts calcium citrate into the discussion of organic health options reflects the ongoing trend towards integrating health-conscious alternatives into everyday diets. As consumer preferences evolve, the organic industry is well-positioned to adapt and thrive.