U.S. Organic Industry Up in 2009, Consumer Confusion Remains


The U.S. organic food & beverage market was not immune to recessionary spending in 2009, though the category once again outpaced the conventional food & beverage market, according to recently published Nutrition Business Journal sales figures. Despite a struggling organic dairy market and a downturn in organic packaged & prepared food sales, the U.S. organic market was able to churn out positive growth in 2009.

The year was marked by a desire to cut costs, including multiple cost-saving, high-profile brand shifts from organic to natural. The less-regulated natural category can help boost a company’s bottom line by eliminating costly organic certification and supply expenditures. Not all organic manufacturers were comfortable with the trend away from organic. “I hate to see a company with its roots in organic make the shift [from organic to natural],” said Seth Goldman, co-founder, president and CEO of organic beverage maker Honest Tea. “It raises the question of credibility. They are essentially blurring the line—maybe not hiding the difference—but taking advantage of the equity built in organic and taking advantage of the consumer a little bit.”

Many within the industry have expressed concerns that manufacturers could be contributing to consumer confusion over the value of organic vs. natural. According to a 2010 survey of 5,000 women conducted by New Hope Natural Media and iVillage, some consumers actually believe natural foods and beverage are nutritionally superior to organic products.“Our research reinforces that the term ‘organics’ alone doesn’t equate to a cleaner, more sustainable product with most people,” said Goldman. “Organic is not a term that is compelling to consumers on its own.”

NBJ’s recently published Organic Foods, Beverages and Personal Care issue details the market trends and factors that affected the $24.4 billion industry in 2009. To order a copy or receive a free sample issue, visit the NBJ subscriber page.

Related NBJ Links:

Natural & Organic Foods Supplier Reports 2009 Sales Decline
Organic Dairy Sales Falter in Troubled Economy But Producers Remain Optimistic
Bellwether Whole Foods Shatters Analyst Expectations with Q1 Earnings

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