The Organic Trade Association releases its 2009 Organic Industry Survey
Posted - May 19, 2009
The Organic Trade Association releases its 2009 Organic Industry Survey
By O.W.N. News Network
The recently released “2009 Organic Industry Survey” commissioned by The Organic Trade Association shows that in 2008 organic sales in the United States reached $24.6 billion in sales. Organic food is the largest segment of organic products, totalling $22.9 billion in sales and accounting for 93% of all organic product sales. In spite of the economic recession, the growth rate for food and non-food organic products combined was 17.1% between 2007 and 2008, the report says.
The growth rate for organic food products in 2008 over 2007 was 15.8%. Organic food now accounts for 3.47% of all food products sold in the U.S. The non-food category includes personal care products, nutritional supplements, fibres, clothing, household cleaners, flowers, and pet food.
Data for the study was collected from 200 companies earlier this year, that provided their sales information for 2007 and estimated sales for 2008. Government data and financial reports from public companies were also used to develop the final estimates.
Some of the findings found in the report were:
• Market penetration of organic products has nearly doubled in the past five years. In 2008 organic sales represented nearly 3.5% of the total food sales in the U.S. (A small share but growing at a much faster rate (15.8%) than conventional food sales (4.9%).
• Fruits and vegetables account for 37% of total organic food sales last year, followed by beverages and dairy, each representing just over 14%.
• Breads and grains showed the strongest growth in 2008 (35% over 2007) followed by beverages (32%).
• National natural and mass-market food chains are the leading channels of distribution for organic foods, each accounting for about one third of sales. Regional natural food chains and independent health food stores have a smaller market share of about 10%.
• U.S. sales of non-food organic reached $1.6 billion in 2008. The largest categories of organic non-food products are supplements, fibres (linen and clothing) and personal care products.
• Sales of non-food organic products are growing faster than sales of organic food. At the same time, the scope of non-food products is changing as new product categories and products are introduced to the U.S. market.
• With respect to organic labelling, half of the producers display the USDA logo in their products, a proportion that rises to 83% for companies with organic sales of $5 million or more.
• Among companies that currently do not display the seal, 20% reported they planned to do so in the next three years.
• An important issue for the industry is the lack of a dependable supply of organic materials. Forty-one percent of producers, large and small, say that undependable supplies of organic raw materials limit their ability to generate sales. Undependable supplies of organic grains are mentioned most often. Lack of organic sugar is an issue for 11% of companies that manufacture organic food.
• Sales under private label account for just over 30% of total sales of organic products.
• Companies with over $5 million US dollars in annual revenue are twice as likely to be involved in exports as firms with less than $500,000 US dollars. However, many smaller firms want to enter the export arena.
• Companies rely heavily on international trade shows for export business development. At the same time, they cite regulations imposed by other countries as the principal barrier to export activity and growth.
