Conventional wisdom holds that the recession hit organics hard, including the category’s $9.5 billion-per-year produce business.
But statistics released by the Brattleboro, Vt.-based Organic Trade Association say the category’s produce sales continued to grow in double digits in 2009.
Produce, which accounts for 38% of the organic food market, led all organic food subsets in 2009, with 11.4% growth, making it the only segment not recording diminished growth from 2008. Organic dairy and packaged/prepared foods, for example, shrank about 1% in 2009.
Total organic sales in the U.S. totaled $26.6 billion in 2009, according to the OTA. Its growth rate was 5.3%. Organic food sales grew by 5.1%, compared to 1.6% for all U.S. food purchases.
“The economy is still rough, but there are good signs of good growth in organic,” said Barbara Haumann, OTA spokeswoman.
That sales of fresh fruits and vegetables would lead the way should come as no surprise, Haumann said.
“We think a part of this was they were cooking more at home and not eating out as much,” she said. “Therefore, they were still buying fruits and vegetables and bringing them home.”
According to OTA measurements taken last fall, there were indications that the category was continuing to defy the economic hard times, Haumann said.
“In October, we had an 8% growth rate for organic sales overall and there were indications it might reach 10%,” Haumann said.
The OTA will complete its next yearly survey sometime in March, she added.
“We are quite optimistic that folks are choosing organic products,” she said.
Since the approval of the final National Organic Program rule published in 2000, sales of organic fruits and vegetables have grown from $2.6 billion, or about 3% of all fruit and vegetable sales, to its current $9.5 billion yearly plateau. During the same period, all organic food sales grew from $6.1 billion to $24.8 billion a year, moving from 1.2% of all U.S. food sales to 3.7%.
Some produce shippers reported far healthier gains than those reported by the OTA.
“We have continued to see a healthy increase in organic sales at Earthbound Farm,” said Craig Hope, chief customer officer for the San Juan Bautista, Calif.-based grower-shipper.
Hope cited AC Nielsen numbers for a 52-week period ending Nov. 13, that found sales of conventional salads were flat while sales of organic salads grew about 16%.
“We didn’t see a decrease in our sales and neither did the category,” Hope said. “That may be because in packaged salads, the price point for organic is a relatively small premium to conventional — usually about 20% or so — and consumers really grasp that value proposition, coupled with the consumer’s continued focus on health and wellness, and true concern about ‘how their products are grown.’”
Not that the economic downturn hasn’t left its mark, Hope said.
“There have been some impacts, though those haven’t been reflected in the salad category sales,” he said.
“The price premium commanded by many organic products, in conjunction with an increasingly challenging economic climate, is impacting some families’ choices,” he said.
Other grower-shippers reported sales increases.
“Organic apple sales were up last crop year, and we’re up even more this season,” said Suzanne Wolter, marketing director for Rainier Fruit Co., Selah, Wash. “Organic apples, pears, cherries and blueberries continue to grow for us.”
Simcha Weinstein, marketing director for Albert’s Organics, Bridgeport, N.J., said the category has felt some pain from the embattled economy.
“For a while many observers believed that perhaps the organic industry was recession-proof, but over time, we have seen that, although not hit nearly as hard as many industries over the past couple of years, there has still been some falloff,’ he said. “Even though shoppers of organic foods are deeply committed to a lifestyle choice and very loyal to their food choices, economic factors can quickly change anyone’s life.”
Albert’s has seen a shift in “product selection,” and not an abandonment of the category, Weinstein said.
“Shoppers are tending more towards staple items at moderate prices and giving up some of their more expensive favorites,” he said. “Instead of asparagus twice a week, it’s more broccoli and zucchini.”
That kind of shift isn’t limited to the organic category, Weinstein noted.
“People who don’t consider organic foods at all are making the same considerations, as well,” he said. “They’re just doing it within a different framework.”
Maria Brous, spokeswoman for Lakeland, Fla.-based Publix Super Markets Inc., said her company’s stores haven’t changed their approach to organics.
“Publix is committed to this category and continues to look to expand this category,” she said.