Organic sector posts record sales despite supply crunch

By Whitney Forman-Cook

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, May 19, 2016 - Organic Trade Association (OTA) members headed to Washington for the group's annual policy meeting next week are in for some good news.

Sales of organic products in the U.S. reached $43.3 billion last year, the highest ever and an 11 percent jump over 2014, according to OTA's 2016 Organic Industry Survey. Almost $40 billion of that figure was generated through sales of organic foods - which now account for 5 percent of all the food sold in the U.S. Growth in organic sales far outstripped the overall food market's growth rate of 3 percent, OTA said.

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Short supply - one of the biggest barriers to expansion in the organic sector - persisted through 2015, OTA said in a release, but growers and producers of organic products are taking steps to solve the problem.

“The industry joined in collaborative ways to invest in infrastructure and education, and individual companies invested in their own supply chains to ensure a dependable stream of organic products for the consumer,” OTA CEO Laura Batcha said.

For instance, some of the biggest names in organic food - Annie's, Stonyfield, Organic Valley, Clif Bar, Nature's Path and others - have joined to create the U.S. Organic Grain Collaborative, a partnership tasked with increasing domestic supply of organic grain. OTA launched its own Organic Fiber Council in 2015 to focus on supply issues specific to the organic fiber industry, and has also been working to expand organic acreage through transition assistance programs.

“Organic is a bright spot in agriculture and the economy of America,” Batcha said in the release. “Our success will continue to be built on a solid foundation of stakeholder engagement, transparency and meaningful organic standards that consumers trust in.”

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The group's Organic Industry Survey, which will be available for purchase in June, found that most of the organic foods sold in 2015 were fruits and vegetables - comprising $14.4 billion in sales, up 10.6 percent from 2014.

“Produce has always been and continues to be a gateway to organic. It's easy for shoppers to make the connection between agricultural practices used in the field and the fresh fruit or vegetables they bite into,” OTA says. Now, almost 13 percent of the produce sold in the U.S. country is organic.

Sales of organic juices and drinks grew 33.5 percent in 2015, faster than any other subcategory, according to the report. Organic condiments sales increased by 18.5 percent; dairy, which accounted for $6 billion in sales (or about 15 percent of total organic sales), grew over 10 percent; and organic snacks, with sales of $2.3 billion, were up almost 14 percent from 2014.

The almost 13 percent growth in sales of non-food organics was led by organic fiber, followed by organic supplements.

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