Organic food sales growth slowed in 2021 as consumer priorities shifted

Dive Short:

  • Organic food gross sales rose about 2% in 2021 to get to $57.5 billion, in accordance to the Natural Trade Association’s once-a-year industry study. This compares to a 12.8% expansion amount in 2020, and a 4.6% enhance in 2019.
  • Among the unique natural and organic types, little one food stuff noticed the maximum greenback income growth in 2021 at 11%, adopted by drinks at 8%. Dairy and egg revenue ended up flat, though nonetheless almost 11% better than in 2019, in accordance to the OTA. Treats, the only category to see a lower in income in 2020, posted 6% advancement in 2021 pushed by nutrition bars.  
  • Whilst the OTA positioned very last year’s slower profits advancement as “shifting again to historic traits,” the record-significant improve in food items costs this calendar year will check consumers’ determination to shelling out additional to eat natural.

Dive Insight:

Taken independently, nearly just about every natural and organic food stuff classification held its possess in 2021, even if progress charges fell back again to modest stages.

Product sales of natural and organic fruits and greens rose about 4.5% in 2021 to access additional than $21 billion, building up a 15% share of the complete segment. Whilst frozen fruits and veggies were a huge driver of progress in 2020 as people stocked up all through the pandemic, product sales of frozen and canned things fell marginally last calendar year. In 2021, the contemporary develop and dried beans, fruits and vegetables segments drove progress, with profits up 6% and 6.5%, respectively.

Organic meat product sales — together with poultry, livestock and seafood — grew 2.5% in 2021 to access nearly $2 billion, when compared to a additional than 25% jump in 2020. Poultry noticed the greatest advancement amount in the meat segment at 4.7% to strike more than $1 billion in sales.   

With the decline in pantry loading, organic and natural classes that observed explosive advancement in 2020 which include canned soup, nut butters and pasta sauce experienced the biggest declines in 2021, in accordance to the OTA. 

Organic and natural bread and grains also had a article-pandemic slide-off, as income “tapered off a little bit” in 2021 following a 30% increase in 2020, in accordance to the group. Baking ingredients, pastas, rice and other dry grains all saw declines.

In a press launch, the OTA mentioned that the class “may perhaps go on to battle” as the Ukraine war and other developments strain provide chains. Merged, Ukraine and Russia are the source of 30% of the world’s wheat, and selling prices for the staple grain have approached history highs as world wide supplies shrink. This past week, the Food and Agriculture Firm of the United Nations described that global wheat selling prices averaged far more than 56% higher in Might than the yr prior. These better selling prices had been for all wheat products and solutions, not just individuals that are qualified organic, which tend to have a price tag top quality.

Optional Caption

Retrieved from Natural and organic Trade Affiliation on June 07, 2022

 

For makers of natural and organic food items and drinks, the challenge is two-fold.

“To preserve natural sturdy, the industry will need to carry on establishing ground breaking solutions to source chain weaknesses and prioritizing endeavours to engage and teach organic and natural consumers and firms,” OTA CEO and Executive Director Tom Chapman explained in a statement.

Proving the category’s worth to buyers at a time when food stuff selling prices are hitting a 4-ten years high may be organic’s heavier lift. Consumers are by now trading down and switching to less expensive brands less than the force.

And consumers’ desire in paying for organic and natural may also be emotion the pressure. In accordance to a new examination of consumer survey information and social media search phrases by Brightfield Group’s Evergi system, income has developed as a stressor in the earlier 6 months, outpacing do the job, the pandemic, the news and lack of rest. In the meantime, consumers’ willingness or need to fork out more for different characteristics has declined. Only 17% were willing to buy natural and organic products in the fourth quarter of 2021 according to a study the group posted, down a few details from the earlier quarter.