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Organic sales beat the odds and then some, according to new report

Is organic recession proof? Time will tell. In 2008, sales of organic food and nonfood increased by 17 per cent when compared to 2007 sales. The survey, conducted by the Lieberman Research Group for the Organic Trade Association, showed that organic food sales grew 15.8 per cent to $22.9 billion last year. A back-to-back comparison of overall growth for food sales versus organic is significant with total U.S. food sales growing by only 4.9 per cent in 2008.

Much of the growth can be attributed to non-food items such as supplements, linens and clothing and personal care products, according to the OTA study. Organic non-food sales propelled an increase in U.S. sales of organic products in 2008 to nearly $1.65 billion, a whopping 39.4 per cent increase over 2007 sales.

Sales of organic products, both food and non-food, totaled $24.6 billion in 2008, a 17.1 per cent increase over 2007, according to the association's 2009 Organic Industry Survey. Organic food now accounts for 3.5 per cent of all food product sales in the U.S., the OTA said.

"Organic products represent value to consumers, who have shown continued resilience in seeking out these products," said Christine Bushway, OTA's executive director.

In organic non-food categories:

  • Supplements grew 38 per cent to $566 million
  • Fiber, including linen and clothing grew 65 per cent to $472 million
  • Personal care products grew 19 per cent to $443 million
  • Pet food grew 48 per cent to $76 million
  • Household products grew 42 per cent to $50 million
  • Flowers grew 54 per cent to $42 million

"It is not surprising to see higher rates of growth in the organic non-foods categories than the organic foods categories as this sector is less mature than organic foods in general," the OTA said in its executive summary of the report.

Consultant Debbie Swoboda of Stuart, Fla.-based Debbie Swoboda Marketing Solutions, isn't surprised at the results either. "People are becoming more aware," Swoboda said. "And in many cases, prices have come down." Organic baby clothes, for example, are gaining in popularity, she said.

In the organic food categories, fruits and vegetables accounted for the lion's share of sales — 37 per cent, followed by beverage and dairy, with 14 per cent each. Organic breads and grains and beverages showed the strongest growth. Breads and grains were up 35 per cent over 2007. Beverages were up 40 per cent. Swoboda wondered what effects the lingering bad economy will have on organic sales in 2009. "People are concerned. But our industry is still up."

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