A sales growth rebound lifted U.S. organic food sales last year over the $60 billion mark for the first time, according to the Organic Trade Association (OTA).
Organic food sales totaled $61.67 billion in 2022, up 4.3% from nearly $59.15 billion in 2021, when sales edged up just 1.8% year over year, OTA reported in its 2023 Organic Industry Survey, released last week. The study data showed a hefty jump in 2020, when organic food sales climbed 12.7% to $58.09 billion from a pre-pandemic total of $51.57 billion in 2019.
Meanwhile, organic nonfood sales rose 1.6% to almost $5.91 billion for 2022, after 6.9% gain to $5.81 billion for 2021. That followed stronger year-over-year growth of 8.5% in 2020 and 9.2% in 2019.
Total organic product sales advanced 4% to about $67.58 billion in 2022 from $64.96 billion in 2021, when the sector tallied 2.3% growth, OTA said. The pandemic hoisted organic product sales by 12.3% in 2020, following a 5.2% increase for 2019.
OTA noted that organic market growth came despite such headwinds as inflationary pressures raising consumer prices, supply chain disruptions from the pandemic and global events, an upsurge of competing food labels in the grocery aisles, and a labor shortage among organic producers. And as in the overall food sector, the organic food market has seen higher dollar sales due to inflation even as volume fell in some categories, the trade group said.
Certified Organic now represents 6% of total food sales in the United States, OTA reported. Of the 2022 organic product market, food accounted for 91.3% and nonfood for 8.7% of sales.
“Organic has proven it can withstand short-term economic storms. Despite the fluctuation of any given moment, Americans are still investing in their personal health, and, with increasing interest, in the environment, and organic is the answer,” Organic Trade Association CEO Tom Chapman said in a statement. “Organic’s fundamental values remain strong, and consumers have demonstrated they will come back time and again because the organic system is verified and better for people, the planet and the economy.”
Organic produce, beverages, dairy lead the pack
As the frequent entry point to the organic food market for consumers, organic produce remained the top-selling organic category, even among nonfoods. Organic fruit and vegetables sales hit $22 billion in 2022, accounting for 15% of all U.S. produce sales, according to the OTA report. Organic beverages came in at No. 2 for the year, rising 4% to $9 billion.
Organic coffee posted $2.3 billion in 2022 sales, a 7% uptick, making the segment the biggest-selling organic beverage. Sales of organic soft drinks and enhanced drinks surged by 14%, breaking through $500 million mark to reach $503 million last year.
“Organic beverages continue to climb. They’re an area where shoppers are willing to experiment and are less price sensitive,” according to study coordinator Angela Jagiello, director of education and insights for OTA. “Soft and enhanced drinks had a great year, with the nonalcoholic trend being a big contributing factor. Many younger shoppers are reducing or eliminating alcohol, and these organic beverages are a celebratory and sophisticated alternative.”
Dairy and eggs were the third-highest-selling organic category in 2022 at $7.9 billion, up more than 7% from the previous year. OTA said organic dairy and eggs now make up almost 8% of the overall dairy and egg market, with ongoing demand and elevated inflation hoisting dollar sales in the segment. Last year, yogurt and eggs generated double-digit growth, with organic yogurt sales rising over 12% to $1.5 billion and organic egg sales growing 11% to roughly $1.2 billion.
A range of other organic products also produced robust sales growth in 2022 as more consumers sought out organic options, OTA said. Those categories include organic baby food and formula (+13% to $1.4 billion); organic rice, grains and potato products (+10% to $387 million); organic dip (+18% to $194 million); and organic pork (+10% to $63 million).
Among organic nonfood products, organic linens and apparel represented about 40% of sales in that category, up 2.5% to $2.4 billion. Organic supplement sales held steady at around $2 billion, and organic personal care sales grew more than 5% to $1.2 billion.
OTA said organic sales have more than doubled over the past 10 years as Americans are eating more organic foods and using more organic products than ever before. Total organic product sales surpassed $50 billion in 2018, while organic food sales topped that mark for the first time in 2019.
“Organic is at that right intersection of environmental and personal health,” Chapman commented. “Organic brings together the interest in human health and a healthy environment, and that offers organic a positive pathway forward and will help organic businesses withstand challenges in the future.”