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OTA survey: U.S. organic sales soar to a new high in 2020

The COVID-19-related push to home cooking ignited sales, setting organic records for both dollar total and growth, Organic Trade Association survey finds.

May 25, 2021

5 Min Read
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Sales of organic foods in the United States marked a new high in 2020—$61.9 billion, a record 12.4% increase over 2019, according to the 2021 Organic Industry Survey that the Organic Trade Association released Tuesday.

The increases were largely due to widespread closings of restaurants around the country, forcing people to cook and eat at home.

Last year marked the first time sales of organic food and non-food products surpassed the $60 billion mark. The growth rate more than doubled the 2019 pace of 5%.

Throughout the year, organic's reputation of being better for you and the planet positioned the food for dramatic growth: In almost every organic food aisle, demand jumped by near-record levels and propelled 2020 U.S. organic food sales to $56.4 billion—a record 12.8% growth.

In 2019, organic food sales totaled $50.1 billion, with non-food products accounting for $5 billion, according to the 2020 Organic Industry Survey. Across all channels, organic food sales increased 4.6%; organic non-food product sales grew 9.2% in 2019 from a year earlier.

In 2020, almost 6% of the food sold in the United States was certified organic, the OTA reported. In 2019, organic accounted for 5.8%.

The COVID-19 pandemic caused consumer dollars to shift almost overnight from restaurants and carry-out to groceries, with traditional staples and pantry and freezer items flying off the shelves. Consumers changed their shopping habits: They turned to online shopping, curbside pickup and delivery services, and tried new products due to out-of-stocks and health concerns.

Related:Thirsty for wellness: 'Healthy' fuels today's beverage sales

"The pandemic caused abrupt changes in all of our lives. We've been eating at home with our families, and often cooking three meals a day. Good, healthy food has never been more important, and consumers have increasingly sought out the organic label," said Laura Batcha, CEO and executive director of the Organic Trade Association. "Organic purchases have skyrocketed as shoppers choose high-quality organic to feed and nourish their families." She announced the new data on Organic Day during Natural Products Expo Virtual, a weeklong trade event.

In 2019, organic food sales totaled $50.1 billion, with non-food products accounting for $5 billion, according to the 2020 Organic Industry Survey. Across all channels, organic food sales increased 4.6%; organic non-food product sales grew 9.2% in 2019 from a year earlier.

 U.S. organic sales soar to a new high in 2020

Stocking the pantry, refrigerator and freezer with organic

Leading the charge for healthy food was the desire for fresh produce. Fresh organic produce sales rose by nearly 11% in 2020 to sales of $18.2 billion. Frozen and canned fruits and vegetables also jumped with frozen sales alone rising by more than 28%. Including frozen, canned and dried products, total sales of organic fruit and vegetables in 2020 were $20.4 billion. More than 15% of the fruits and vegetables sold in this country now are organic.

Related:Market Overview 2020: Reasons organic attracts consumers evolve from simply ‘for the kids’

Pantry stocking was overwhelmingly the main growth driver in 2020. As bread making and cookie baking took kitchens across the country by storm, sales of organic flours and baked goods grew 30%.

Consumers also turned to "meal support" products to help them in the kitchen. Sales growth of 31% in sauces and spices pushed the condiments category to $2.4 billion, and organic spice sales jumped 51%, more than triple the growth rate of 15% in 2019.

Meat, poultry and fish, the smallest of the organic categories at $1.7 billion, had the second-highest growth rate, nearly 25%.

Supply constraints may have limited growth

"The only thing that constrained growth in the organic food sector was supply," said Angela Jagiello, director of education & insights for the Organic Trade Association. "Across all the organic categories, growth was limited by supply, causing producers, distributors, retailers and brands to wonder where numbers would have peaked if supply could have been met."

Jagiello, who spearheads the coordination of the survey, added that the pandemic strained the supply of not only ingredients but of packaging—bottle lids, pouches, corrugated cardboard, bottles for dietary supplements—as well. The country also saw a shortage of workers and drivers to transport product, making it hard for producers to ramp up processing to meet consumer demand.

Steady growth in non-food sector

The organic non-food category did not see the same exceptional growth in 2020 as organic food, but its growth held steady. Sales of organic non-food products reached $5.4 billion, up 8.5% and only slightly below the 9.2% reported in 2019.

Reflecting the pandemic and conventional non-food products, organic sales were driven by personal hygiene, hand sanitizers and cleaning products. Sales of organic household products saw record growth of 20%.

Textiles and fibers—the biggest category of the organic non-food sector—saw sales slow as stores closed and clothes buying dipped. That said, the category fared better than expected given its ties to brick-and-mortar retail and the long-term shutdown of that sales channel.

 For the year, U.S. organic fiber (linens, clothing and other textiles) sales grew at a rate of 5%, compared to 12% in 2019, reaching sales of $2.1 billion.

What's ahead in the 'new normal'

While the growth in organic food sales is not expected to continue at 2020's rate, it is predicted to stay strong in 2021. The grocery industry at large likely will get a lasting lift from the pandemic for the foreseeable future, as many consumers continue to cook more at home.

"We've seen a great many changes during the pandemic, and some of them are here to stay," Batcha said. "What's come out of COVID is a renewed awareness of the importance of maintaining our health and the important role of nutritious food. For more and more consumers, that means organic. We'll be eating in restaurants again, but many of us will also be eating and cooking more at home. We'll see more organic everywhere—in the stores and on our plates."  

This year's survey was conducted from January through March 2021 and produced on behalf of the Organic Trade Association by Nutrition Business Journal (NBJ). Nearly 200 companies completed a significant portion of the in-depth survey.

The full report is available for purchase from the OTA.

Source: Organic Trade Association

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