Organic Industry Report

The category experienced the highest growth for any organic food category in 2009 with 1% growth, making it the only segment not recording diminished growth from 2008.

Organic dairy and packaged & prepared foods were the big disappointments of 2009, both shrinking about 1%. With factors such as price drops for conventional milk, consumers trying to save money were put off by the wide price gaps of conventional vs. organic in categories such as dairy and meat. The mass market channel commanded the lion’s share of organic food sales in 2009 with more than half (54%) of organic food passing through mainstream grocers, club stores and retailers.

Natural retailers were the runners-up ith 38% of total organic food sales, conceding some sales to mass market because many consumers assume”although not necessarily correctly”that organic products are cheaper in mass market. The farmers’ market/co-op/CSA channel, although small, generates a lot of buzz as consumers increasingly look for local and regional organic foods.

Among other factors, wider distribution of organic products in various channels, as well as the growth of private label in the retail channels have contributed to shifts in the allotment of sales among the various channels.

When eported in the 2006 OTA report (2005 sales), the natural grocery chains and regional natural and health food stores accounted for 47% of all sales, nearly 10% higher share than in 2009. Growing by 9. 1% in 2009, the organic non-food category continues to outpace the growth of total non-food sales. The organic non-food market added $151 million in new sales dollars in 2009 to reach total sales of $1.

8 billion. U. S. Organic Non-food vs. Total Non-food Sales, Growth and Penetration, 2003-2009 Category Organic Non-food Growth Total Non-food Growth Organic as % Total 0. 1% 439 20.

3%