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US organic market continues to outpace conventional food sales growth

By Caroline Scott-Thomas , 24-Apr-2012

US organic market continues to outpace conventional food sales growth

The US organic market grew 9.5% last year, breaking the $30bn barrier for the first time, and continuing to outpace sales of non-organic food, according to a new report from the Organic Trade Association (OTA).

Total organic sales were $31.5bn and organic food and beverage represented the majority of this, at $29.22bn, the organization said. Sales of organic foods accounted for 4.2% of total food sales last year, up from 4% a year earlier. Meanwhile, the value of total food sales grew 4.5% in 2011.

“The US organic sector continues to show steady and healthy growth,” said Christine Bushway, OTA’s executive director and CEO.

 “Consumers are increasingly engaged and discerning when they shop, making decisions based on their values and awareness about health and environmental concerns,” she said. “For them, it matters whether foods are genetically engineered, or produced using practices that are good for their families.”

Organic fruits and vegetables continued to be the most popular organic food items, accounting for nearly half of all spending, while meat, fish and poultry was the fastest-growing sector, with 13% growth over 2010 sales. However, organic meat, fish and poultry was still the smallest organic food category, the OTA found.

“Price is still an issue, but with the wide availability of private label products and many venues for organic products, [consumers] have many choices for where to shop and a variety of products from which to choose,” Bushway said.

Local or organic?

The association’s report also highlights consumer confusion over the benefits of organic when compared to other food attributes, such as natural, non-GMO, or local.

“Manufacturers that can give consumers a combination of these attributes without a price premium can hit a sweet spot, but when purchasers with limited budget make buying decisions, a cheaper local product often wins over a pricier imported organic option,” the report said.

The US organic retail sector has grown rapidly in recent years – by 56% from 2006 to 2010, according to market research organization Packaged Facts. It has suggested that growth in the US organic sector could increase still further, to 11% to 12% per year to 2015. Meanwhile, the OTA is slightly more conservative in its growth predictions, forecasting growth of around 9% per year.

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