Organics continue to soar, says new OTA report

By Lorraine Heller

- Last updated on GMT

Related tags: Percent, Organic food, Organic certification

Sales of organic foods in the US continue to increase, with the
meat category demonstrating the highest growth rate last year,
according to preliminary results from the Organic Trade
Association's (OTA) 2006 Manufacturer Survey.

Unveiled at OTA's All Things Organic (ATO) trade show in Chicago earlier this month, the newest figures reveal that the organic category currently represents around 2.5 percent of all retail sales of food.

The overall food organic market has grown 28 percent since 2003 to reach a total value of $14bn in 2005, and is expected to reach $16bn by the end of 2006.

"These findings show there is continued strong growth for organic products, which means additional opportunities for farmers and more choices for consumers,"​ said Caren Wilcox, OTA's executive director.

Although currently the smallest organic category, meat, fish and poultry experienced the highest growth last year, increasing by around 55 percent to reach $256m.

According to consumer trend analyst Harvey Hartman, this is largely due to people's turn towards more 'natural' foods. Speaking at the ATO, he said consumers are increasingly opting for organic meat and dairy products in an effort to avoid hormones and antibiotics.

Indeed, the dairy sector continues to be the second largest organic category, coming in at $2bn after experiencing a 24 percent growth last year. Fruits and vegetables remain in the top spot at $5bn, with an 11 percent growth rate.

The third largest organic category is non-dairy beverages, worth $2bn and having increased 13 percent since last year. Packaged and prepared foods have shot up 19 percent to $1.8bn, while breads and grains have experienced the same growth rate and currently stand at $1.4bn.

Snack foods are up 18.3 percent to $667, while the organic condiment market is now worth $341m, 24 percent more than last year.

According to Hartman, the strong growth of certain categories such as packaged foods for children demonstrates that people are increasingly seeking out organic products in grocery stores, by looking for these within the center of the store, and not just opting for organic products found on the perimeter of stores, such as fresh produce and dairy.

Indeed, shoppers are also increasingly looking for the USDA organic seal on products as assurance that these are being regulated.

Yet despite the steady growth of the organic market in the past decade, one obstacle that still remains is the lack of adequate supply. According to one industry expert, the US organic market growth is being stunted by undersupply, resulting in shelves remaining empty, companies withdrawing from the market and others looking internationally to supplement supply needs.

The sectors hardest hit by supply shortages are the organic orange juice, meat and dairy sectors.

Related topics: Suppliers

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