Organic food sales jump nearly 13% to record high in 2020

U.S. organic product sales climbed 12.4% in 2020, breaking the $60 billion mark for the first time and more than doubling the previous year’s growth, according to the Organic Trade Association (OTA).

Organic food and nonfood product sales totaled $61.9 billion last year, vaulting over 5% growth to $55.1 billion in 2019, OTA said Tuesday in releasing its 2021 Organic Industry Survey. Sales of organic food rose 12.8% to $56.5 billion in 2020, well above the prior-year gain of 4.6% to nearly $50.1 billion.

Meanwhile, organic nonfood sales — representing 8.8% of total organic product sales — came in at $5.4 billion in 2020, up 8.5% from just over $5 billion in 2019, when the segment grew 9.2%.

The last time the U.S. organic product market saw double-digit sales growth was in 2015, when sales escalated 11.3% year over year, capping off four straight years of double-digit increases, OTA data show.

“Organic purchases have skyrocketed as shoppers choose high-quality organic to feed and nourish their families,” Laura Batcha, CEO and executive director of the Washington, D.C.-based Organic Trade Association, said in a statement.

“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,” she explained. “Good, healthy food has never been more important, and consumers have increasingly sought out the [USDA] Organic label.”

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Last year in the United States, nearly 6% of all food sold was certified organic, OTA noted. Fresh produce led the way, with organic fruit and vegetable sales up 11% to $18.2 million in 2020, according to the survey, produced for OTA by Nutrition Business Journal.

Sales also jumped in frozen and canned fruit and vegetables, with frozen food sales surging over 28%. Including frozen, canned and dried products, total sales of organic fruit and vegetables totaled over $20.4 billion in 2020. OTA said more than 15% of all fruit and vegetables now sold in the U.S. are organic.

 
As in other grocery industry segments, organic food sales growth got a boost from consumer pantry stocking after the outbreak of COVID-19 in early 2020, OTA pointed out. That triggered a nationwide resurgence in baking, hoisting sales of organic flour and baked goods by 30%.

Likewise, sales of “meal support” products jumped as more consumers returned to cooking at home. Higher sales of organic sauces and spices helped lift the $2.4 billion condiments category to 31% growth, OTA said. Organic spice sales climbed 51%, more than triple the growth rate of 15% in 2019.
 
Growth also was strong in organic meat, poultry and seafood, the smallest of the organic categories, which saw sales rise almost 25% to $1.7 billion.

Related:Organic produce continues growth, with sales up 9.3% in Q1

Angela Jagiello, director of education and insights at OTA, noted that the organic product arena wasn’t immune to the pandemic-triggered supply shortages that impacted grocery and other industries.

“The only thing that constrained growth in the organic food sector was supply,” Jagiello stated. That included not just products and their ingredients but also packaging, as bottle lids, pouches, corrugated cardboard, bottles for dietary supplements and other material was in short supply, making it hard for producers to meet consumer demand, she added. “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.”

Looking ahead, OTA said the organic food market isn’t likely to uphold last year’s robust growth, but 2021 sales stand to remain at an elevated level due to the lasting food-at-home trend from the pandemic.

“We’ve seen a great many changes during the pandemic, and some of them are here to stay,” Batcha commented. “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.”