U.S. sales of certified organic products approached $70 billion in 2023, a new record for the sector. Dollar sales for the American organic marketplace hit $69.7 billion last year, up 3.4 percent, according to the 2024 Organic Industry Survey recently released by the Organic Trade Association (OTA).
Despite stubborn price inflation seen throughout retail aisles, consumers continued to seek out the USDA Organic label. The organic marketplace recalibrated its supply chain and reconciled the cost of doing business in part with increased retail pricing. The industry continued to grow, with organic food sales in 2023 totaling $63.8 billion and sales of organic non-food products totaling $5.9 billion.
“It is encouraging to see that organic is growing at basically the same rate as the total market. In the face of inflation and considering organic is already seen as a premium category, the current growth shows that consumers continue to choose organic amidst economic challenges and price increases. Although organic is now a maturing sector in the marketplace, we still have plenty of room to grow,” says Tom Chapman, co-CEO of OTA.
In 2023, the increase in dollar sales in the organic market was driven more by pricing than unit sales. But that said, consumers boosted their purchases of many organic products. Increases in unit sales were reported for up to 40% of the products tracked in this year’s survey. The survey also showed that prices for many non-organic products climbed at a faster rate than organic products. This means the price gap between conventional and organic is closing, which should help fuel growth for organic products in 2024.
Produce held its spot as the largest organic category in 2023, continuing to be the primary entry point for consumers into the organic market. In 2023, the category grew by 2.6% to $20.5 billion. Organic produce now accounts for more than 15% of total U.S. fruit and vegetable sales.
The second biggest-selling food category in the organic aisles was the grocery category with sales of $15.4 billion for a 4.1 percent growth. Beverages were the third largest category for organic in 2023, posting $9.4 billion in sales, up 3.9 percent. Organic dairy and eggs was the fourth-largest category in organic food; sales were up 5.5%, reaching $8.2 billion. Organic dairy and eggs now account for over 8% of all dairy and egg sales.
Research is showing a consistent and growing interest in organic from Millennials and Gen Z. These generations grew up with organic and sustainability, and the health of people and planet, are all top-of-mind for these consumers. Industry experts see this as an opportunity for organic, with the sector well positioned to meet the product attributes and values sought by consumers today and for future generations. By 2030, the U.S. population will consist of a majority driven by Millennial, Gen Z and younger generations.
Matthew Dillon, co-CEO of OTA, adds that to achieve this growth, “It is essential to educate consumers that choosing organic is a straightforward way to tackle some of the greatest challenges we face. Whether it’s accessing healthy foods, improving transparency in supply chains, mitigating climate change, supporting rural economic resilience, protecting natural resources, or realizing the multitude of other benefits, effectively communicating and delivering on these promises is the key to expanding organic’s share of our dinner plate.”
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