Recession be damned, say organic food consumers

Articles
May 05, 2009

Recession be damned, say organic food consumers

This may seem counter-intuitive, but sales of organic food and non-food products have risen substantially through this recession. Shoppers are working harder to find organics priced right for their household budgets, suggested the Organic Trade Association, which just released figures based on primary sales data from over 200 manufacturers, distributors and retailers of organic products. “Because most venues now offer organic products, consumers have the opportunity to shop around. Increased use of coupons, the proliferation of private label brands, and value-positioned products offered by major organic brands all have contributed to increased sales,” the OTA explained. Approximately half of the companies surveyed sell some private label organics. Among them, PL accounts for more than 30% of organic sales, the companies told Lieberman Research Group on behalf of OTA. Our belief at SupermarketGuru.com is that this high figure is an expected result, since the frequently lofty prices of organic products leave plenty of room for store-brand encroachment. With this dynamic in place, one finds it easier to accept this statement from OTA executive director Christine Bushway: “Organic products represent value to consumers, who have shown continued resilience in seeking out these products.”

This may seem counter-intuitive, but sales of organic food and non-food products have risen substantially through this recession.

Shoppers are working harder to find organics priced right for their household budgets, suggested the Organic Trade Association, which just released figures based on primary sales data from over 200 manufacturers, distributors and retailers of organic products.

“Because most venues now offer organic products, consumers have the opportunity to shop around. Increased use of coupons, the proliferation of private label brands, and value-positioned products offered by major organic brands all have contributed to increased sales,” the OTA explained.

Approximately half of the companies surveyed sell some private label organics. Among them, PL accounts for more than 30% of organic sales, the companies told Lieberman Research Group on behalf of OTA. Our belief at SupermarketGuru.com is that this high figure is an expected result, since the frequently lofty prices of organic products leave plenty of room for store-brand encroachment.

With this dynamic in place, one finds it easier to accept this statement from OTA executive director Christine Bushway: “Organic products represent value to consumers, who have shown continued resilience in seeking out these products.”

U.S. organic food and beverage sales grew by 15.8% to $22.9 billion in 2008, while organic non-food sales leaped by 39.4% to $1.6 billion. As a result, organics account for approximately 3.5% of U.S. food and beverage sales, reported OTA. The number of organic products available in the marketplace rose concurrently, from 20,989 in 2007 to 24,578 in 2008.

Fruits and vegetables command the greatest share of edible organics, representing 37% of total organic food sales in 2008, followed by beverage and dairy at just over 14% each, revealed OTA data. Posting the greatest growth in 2008: beverages, 40%; and breads and grains, 35%.

Among nonfoods, the largest categories in 2008 were supplements, fibers (linen and clothing) and personal care products.

At SupermarketGuru.com, we think private label could be the sleeper, the trigger for accelerated organics growth, because its pricing helps to bring organic edibles within budgetary reach of mainstream consumers who are struggling to save. So we’re glad to see OTA’s insights on PL growth within organics. The figures serve as a useful benchmark against name-brand growth, as well as a measure of consumers’ search for value, and their willingness to trial store-brand organics and potentially accept them.