After more than a decade of solid double-digit growth, the U.S. organic industry suffered a rude awakening in 2008. Although U.S. consumer sales of organic foods and beverages grew a respectable 12% last year, the industry for the first time collectively came to the realization that organic is not immune to the forces that are rocking the economy at large. One year ago, organic executives, investors and industry experts confidently told Nutrition Business Journal for our 2008 Organic Markets Overview that they believed organic is recession-proof because consumers view it, not as a luxury item, but rather as an integral part of their health and wellness.
Today, industry insiders are acknowledging that, despite the strong core group of consumers who are keeping organic sales buoyant for now, the current economic downturn could suck a lot of air out of the industry’s growth sails. Said Michael Funk, organic veteran and chairman of the industry’s largest organic product distributor, United Natural Foods Inc. (UNFI): “The economy is on everybody’s mind. Everybody’s sales are being impacted.”
Certainly, as many of the executives we talked to for this issue pointed out, 2008 could have been much worse for the U.S. organic industry given how steeply the economy as a whole fell at the end of last year. According to NBJ’s estimates, total U.S. consumer sales of organic foods and beverages grew 12% to $21.1 billion. This was down from 16.9% growth in 2007. A review of scanner sales data from SPINS andNielsen Co. shows that organic food and beverage sales actually stayed quite strong during the first three quarters of 2008, particularly in the natural & specialty channel. It wasn’t until the financial market meltdown last fall that demand for organic began to soften across all channels.
NBJ’s 2009 Organic Food and Beverage issue, which publishes later this month, provides an in-depth look at the U.S. organic industry and includes our sales estimates by organic product category and sales channel.
You can order the issue, subscribe to NBJ or download a free 32-page sample issue of the journal via the NBJ Website.
Related NBJ links:
U.S. Shoppers Still Loading Up on Organics Despite Rising Sticker Shock
2008 Organic Markets Overview