U.S. Organic Sales Top $10.8 Billion

2003 was another banner year for organic product sales in the U.S., growing about 20% to reach $10.8 billion, according to the Organic Trade Association’s 2004 Manufacturer Survey. Organic foods sales were approximately $10.38 billion in 2003, up 20.4% from 2002. Meanwhile, “non-food” organic products, such as personal care products, nutritional supplements, organic fiber, household cleaners, flowers and pet food, grew by 19.8%, to reach $440 million in sales.

Organic food sales now represent about 2% of U.S. food sales. Organic fruits and vegetables represented about 42% sales, and although the organic meat, poultry and fish category represents a mere 1% of sales, it is the fastest growing category, at nearly 78%.

44% of organic food sales are at supermarkets, mass merchandisers and club stores. Independent natural food stores and natural grocery chains accounted for 47% of sales. The remaining 9% occurred at farmers’ markets, food service (such as restaurants), exports, and other non-retail store sales.

Survey results forecast an annual average growth rate of 18% for organic foods from 2004-2008. The meat, fish and poultry category, with 30.7% anticipated growth, is expected to have the highest growth rate, followed by fruit and vegetables, at 20.7% growth.

Organic News

. As of 2002, there were 12,000 certified organic farms in the U.S., producing commodities valued at $392,813,000, according to the USDA census. USDA’s Agricultural Marketing Service has posted a slide show on the National Organic Program, “Value through Verification“.

. The USDA has awarded the Organic Trade Association (OTA) $250,000 to promote U.S. organic agricultural products overseas during 2004. One of the ways the OTA used these funds was to run a series of 30-second TV ads on the benefits of organic oranges in the Toronto area. Sales increased 153%, with several stores reporting average monthly sales of organic oranges doubled or tripled.

. The New Farm web site from The Rodale Institute has added a directory of farms at universities where students are using organic and sustainable ag practices.

. The Hain Celestial Group has reached an agreement with Sesame Workshop to create co-branded organic food products for children under the Earth’s Best brand using Sesame Street characters.

. Stonyfield Farm is experimenting with a program that places vending machines stocked with organic snacks in schools. A handful of vending machines are in high schools in Massachusetts, Rhode Island and California, offering such items as string cheese, pita chips, organic yogurt, soy nuts, dried fruit, carrots and dip.

. Recent acquisitions, White Wave and Horizon Organic, are among the most profitable divisions of Dean Foods. Now, White Waver founder Steve Demos has been asked to lead the combined branded businesses of White Wave, Horizon Organic and the Dean National Brand Group, a new division accounting for $1.1 billion in annual sales. It will be headquartered in Boulder County, Colorado and employ about 1,200 people. White Wave is forecast to account for $370 million in sales this fiscal year, while Horizon is expected to post $250 million.

Demos said, “We will use our profitability as a resource to lead in sustainability and the environment.” Hershey’s chocolate milk and Land O’Lakes products are among the brand names in the Dean National Brand Group. He noted that even these conventional products can contribute to environmental goals by being produced in a “green” facilities. Demos also plans to take the savings from combined marketing and distribution “to increase market awareness of organic and natural foods.”

When White Wave merged with Dean Foods in 2002, Demos recalled, “We said were going to introduce our ‘green’ to Dean Foods, and Dean Foods was going to introduce their ‘green’ to White Wave. If your goal is to change the way Americans eat, this is the best thing that could have happened.”

Indeed, White Wave’s half-gallon organic Silk Chocolate is now America’s single best-selling product in the chocolate milk category, according to grocery sales tracker Information Resources, Inc. Consumers using organic products daily grew from 8% in 2000 to 11% in 2003, according to The Hartman Group.

Organic Harvest Month”
September is Organic Harvest Month. In 1992, the Organic Trade Association (OTA) implemented Organic Harvest Month” as a widespread promotion of organic food and agriculture through regional and local events and a media campaign. Events in the past have included gastronomic walking tours, organic country fairs, organic-themed barn dances, special displays and tastings at supermarkets, and special pullout sections in local newspapers. www.ota.com/news/ohmcalendar.html

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OTA’s 2004 Manufacturer Survey was conducted by Nutrition Business Journal (NBJ). To order copies: www.ota.com/bookstore/2.html