Marketers optimistic about future of organic produce

From The Packer | 20 August 2021

Overview of the organic produce supply, complemented by charts from Agronometrics. Original published on August 17, 2021. 

The long, jolting journey that has been the COVID-19 pandemic is not ideal for organic marketers, but it isn’t disaster either.A handful of produce marketers responding to a survey from The Packer in early August said they expect organic sales to grow between zero and 10% this year, with a similar range of growth expectations predicted for 2022.

Volumes (in Kg) of organic apples in the US Market
img 6181f9b32e70d

Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)

A report on retail sales from the Organic Produce Network said organic produce dollars during the April through June period increased by 4.1% compared with the same period a year ago. That didn’t match the rapid growth of 2020 but was still well above the performance of conventional produce.

Bullish on organic

The long-term strength of the organic category will remain in place, many marketers think.

Those surveyed by The Packer were asked to reflect on the growth of the category in the past five years and to project what it may look like in five years.

Five years ago, organic produce was harder to come by and far more expensive, said Chuck Sinks, president of sales and marketing for Sage Fruit Co., Yakima, Wash.

Price (in USD) of organic apples in the US Market
img 6181f9b374ac0

Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)

“With the demand being as high as it is, produce vendors have made conscious efforts to accommodate consumers,” he said. “That being said, we have also found better ways to grow, store and pack organic product and are able to offer a wider variety throughout the entire year. We’ll continue to see that trend for the next five years – we’ll only get better at what we’re producing.”

Competition will get tougher, one supplier said.

T“We see more competition from bigger and bigger companies, and I suspect that will continue to push out smaller growers,” said Iris Montaño-Madrigal, marketing manager for Covilli Brand Organics, Nogales, Ariz.

Organic produce sales will continue to grow in five years, though likely at a slower pace, said Ray Wowryk, director of business development for Nature Fresh Farms, Leamington, Ontario.

Organic is driving sales growth at retail and demanding more shelf space, said Dan Davis, director of business development for Starr Ranch Growers, Wenatchee, Wash.

Volume (in USD) of organic versus conventional apples in the US Market
img 6181f9b3c66cd

Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)

“As we look at flat per capital consumption in many instances, organic is climbing,” he said.

There is more variety than ever for organic produce at retail, said Brianna Shales, marketing director for Stemilt Growers, Wenatchee.

“Items tha
t had not previously been grown organically are now, and we have year-round supply on many common organic produce items,” Shales said.

“I think we will see more season extension in the next five years, and we will also continue to see growth in the breadth and depth of the organic produce selections at grocery stores.”

Read: What the Organic Trade Association is doing for produce

Greater awareness of organic produce will lead to more sales, said Scott Schultz, director of national organic sales for Pacific Coast Fruit Co., Portland, Ore.

“The trends of the last five years are similar to those of the last 20 years — as understanding of organic ag spreads, so does support,” Schultz said.

“The new generation is better educated than any in the past and making decisions with lifestyle that impact food choices directly. Food continues to be more than its components — it is a political and ideological force.”

By 2030, organic sales will account for 16% to 25% of total produce sales, suppliers said, with most thinking organic sales could represent 22% to 25% of sales by then. In 2020, the Organic Produce Network estimated that organic produce accounted for 12% of all fresh produce sales.

The News in Charts is a collection of stories from the industry complemented by charts from Agronometrics to help better tell their story.

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