Organic fresh produce sales growth tails off in 2021

U.S. sales of organic fresh produce surpassed $9 billion for 2021, the first time the market has reached that mark, but didn’t match the double-digit gain from the previous year.

Organic fresh produce sales totaled $9.22 billion last year, up 5.5% from $8.54 billion in 2020, when the market grew 14.2%, according to the 2021 Organic Produce Performance Report, released this week by the Organic Produce Network and Category Partners. The dollar sales growth gave organic produce a 12% share of the overall fresh produce market, with conventional fresh produce dollar sales edging up 1.9% in 2021 for an 88% share.

By volume, organic fresh produce unit sales rose about 2% to 3.09 billion in 2021, for a 7% unit market share, following a 16% gain in units for 2020. Unit volume for conventional fresh produce, meanwhile, declined 3.3% for a 93% share.

In terms of fresh produce market share, organic saw only slight growth in 2021 versus 2020, when the segment had a 12% dollar share and a 6.6% unit share. The 2021 OPN report reflects January-to-December Nielsen retail scan data covering total U.S. food sales and outlets.

“It is very apparent that consumer supermarket food purchases the past year reflected more traditional buying trends as compared to the COVID-inspired purchasing changes we saw in 2020,” Matt Seeley, CEO of the Organic Produce Network, a Monterey, Calif.-based marketing organization, said in a statement. “At the same time, we saw many organic fresh produce categories continue to show solid growth as part of the longer-term trend of consumers moving to organic produce and, in turn, growing organic’s share of market.”

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Three categories — packaged salads, berries and apples — accounted for 40% of dollar sales and two-thirds of all organic fresh produce dollar growth in 2021. Among the top 10 categories, berries, lettuce and citrus posted double-digit dollar sales growth. Grapes and avocados were among the top 10 categories in 2020 but not in 2021, which saw carrots and lettuce climb into the largest 10 segments.

The largest categories by dollar sales last year were packaged salads at about $1.55 billion ( 3.2%), berries at nearly $1.48 billion ( 13.9%), apples at $664 million ( 6.3%), herbs and spices at $473 million ( 5.4%), and carrots at $430 million (-1.3%).

Rounding out the top 10 organic fresh produce categories were lettuce at $421 million ( 10.2%), bananas at $391 million ( 4%), tomatoes at $326 million ( 2.3%), potatoes at $292 million ( 1.1%) and citrus at $258 million ( 10.6%).

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In 2021, packaged salads again had one of the highest organic price premiums, at $3.11 per pound over their conventional counterparts. Organic berries showed sizable price premiums versus conventional berries, at $3.01 per pound for blackberries $2.18 per pound for blueberries and $2.52 per pound for raspberries. Conversely, bananas had one of the smallest price premiums for organic, at 15 cents per pound versus conventional bananas.

“While a gap remains in the average retail price per pound between organic and conventional, the price increases in both categories last year were remarkably similar,” according to Steve Lutz, senior vice president of Insights and Innovation at Category Partners, a perishables market researcher based in Idaho Falls, Idaho. “The average retail for conventional increased by 8 cents per pound to $1.57 per pound, while organic increased from 9.4 cents per pound to $2.97 per pound. Granted, the percentage increase in organic [was] smaller, but the aggregate change was very close.”

By unit sales, the biggest organic fresh produce categories in 2021 were bananas at 547 million ( 3.4%), carrots at 271 million (-4.4%), apples at 270 million (-2.7%), berries at 239 million ( 10.2%) and packaged salads at 214 million ( 0.9%).

The berries, watermelon and citrus categories proved to be the main organic produce growth catalysts in unit volume last year, OPN noted. Four of the top 10 organic produce categories experienced unit declines, including carrots, apples, potatoes, and herbs and spices. 

The balance of the 10 largest organic produce categories by units were potatoes at 171 million (-3.3%), lettuce at 124 million ( 8%), onions at 111 million ( 0.9%), citrus at 110 million ( 13.4%), and herbs and spices at 80 million (-2.7%).

All four geographic regions of the country saw modest single-digit dollar sales growth for organic fresh produce during 2021, led by the South at $2.86 billion ( 7.6%) and followed by the West at $2.81 billion ( 3.6%), Northeast at $2.13 billion ( 5.9%) and Midwest at $1.42 billion ( 4.4%). The South also set the pace in unit sales growth at 4.3%, followed by the Northeast at 1.7% and Midwest at 1%. Unit volume for organic produce was flat in the West.

OPN added that the 2021 fourth quarter marked the eighth straight quarter of organic fresh produce sales growth, up 4.9% year over year to $2.7 billion. Organic berries led way in dollars and units, with gains of 22% and 19% respectively.

“Sales of organic produce in 2021, while up a bit less than expected, remain on par with the historical long-term growth trends we have come to expect for organic produce,” Lutz observed. “As the foodservice sector reopened, consumers began to shift some meals back to foodservice channels. The net result in 2021 is many produce categories, especially vegetables, had weaker growth when matched against 2020.”