The organic food market in
the United States is experiencing high demand due to the increasing consumer
awareness regarding the harmful impact of pesticides in food. Moreover, the
growing consumer trend to shift towards a healthier lifestyle is further
contributing to the market's growth.
United States Organic Food Market
Scope
Organic food, whether fresh
or processed, is the product of organic farming practices. It is cultivated
without the use of synthetic chemicals, including human-engineered pesticides
and fertilizers, and is free of genetically modified organisms.
The United States Department
of Agriculture (USDA) states that there are several criteria that must be met
for a product to be classified as organic. An animal-based food product can be
considered organic if it has been raised without the use of antibiotics or
growth hormones.
United States Organic Food
Market Overview
The organic food market in
the United States is expected to experience significant growth in the forecast
years due to the rise in organic farming activities and various government
initiatives to support organic farming in the country. According to data
provided by the United States Department of Agriculture (USDA), the sales of
organic fruits and vegetables accounted for 40.2% of the total organic sales in
the country. Thus, with the increase in the consumption of various organic
foods, it is expected to have a positive impact on the growth of the United
States organic food market.
United States Organic Food
Market Drivers
Organic farming aligns with
the principles of sustainable agriculture, which aims to preserve the
environment, maintain soil fertility, and protect natural resources for future
generations. As sustainable agriculture gained traction, organic farming became
an attractive option for environmentally conscious farmers. Organic farming
practices focus on improving soil health and promoting biodiversity. By
avoiding the use of synthetic chemicals, organic farms create healthier
ecosystems that support beneficial insects, pollinators, and microbial life in
the soil. According to data provided by the United States Department of
Agriculture (USDA), the National Agriculture Statistics Service surveys
revealed that the certified organic cropland acres increased by around 79% to
reach 3.6 million acres, and certified farm operations increased by more than
90% to 17,445 farms in the country.
Organic farming reduces the
environmental impact associated with conventional farming, such as chemical
runoff and greenhouse gas emissions. This resonated with farmers who wanted to
minimize their ecological footprint. Retailers and food manufacturers were
expanding their organic offerings, creating new market opportunities for
organic farmers. This expanded market access encouraged more farmers to adopt
organic practices.
Moreover, consumers have
become more aware of the after-effects of non-organic food production processes
on the environment. The use of various synthetic substances and chemical
fertilizers is severely harmful to human health and the environment. Therefore,
consumers are shifting towards the usage of more environmentally sustainable
and organic products.
Furthermore, various
government initiatives to support organic farming are also assisting the growth
of the United States organic food industry. For instance, in 2022, the United
States Department of Agriculture (USDA), within the new Organic Transition
Initiative, invested around USD 300 million, which will help build new and
better markets and streams of income for farmers and producers.
United States Organic Food Market
Trends
As more consumers seek
healthier and more sustainable food options, the demand for organic products
has increased significantly. Major retailers and grocery chains have recognized
the potential of the organic food market and have committed to offering a wider
selection of organic products. They have dedicated more shelf space and
resources to accommodate organic offerings. Retailers have introduced their own
private-label organic brands to provide more affordable organic options and
compete with established organic brands. This move has increased the
availability of organic products across different price points. Restaurants,
cafes, and foodservice establishments have started incorporating organic
ingredients into their menus to cater to health-conscious diners. This has
extended the reach of organic offerings beyond retail stores. Many supermarkets
and grocery stores have created dedicated sections or aisles for organic
products. This makes it easier for consumers to identify and purchase organic
items during their shopping trips.
The rise of e-commerce and
online grocery delivery services has provided a platform for a broader range of
organic products to reach consumers, including niche and specialty organic
items. Retailers and food manufacturers have collaborated directly with organic
farmers and suppliers to ensure a steady supply of organic produce and
products, fostering relationships within the organic farming community. Beyond
fruits and vegetables, the organic market has expanded to include a variety of
food categories such as dairy products, meat, poultry, snacks, beverages, and
pantry staples.
Challenges in the United
States Organic Food Market
Organic farmers adhere to
strict guidelines and avoid the use of synthetic chemicals, which can increase
production costs. Organic farming methods might result in lower crop yields
compared to conventional farming, reducing economies of scale and potentially
raising prices. Obtaining and maintaining organic certification can be
expensive for farmers and food producers, adding to the overall cost of organic
products. The demand for organic products has increased over the years, but the
supply may not always keep pace, leading to higher prices. Some organic brands
position themselves as premium products, further justifying a higher price
point.
Organic farming relies more
on manual labor for tasks such as weeding, pest control, and soil management
since synthetic chemicals are not used. Farmers must comply with strict organic
certification standards, which involve additional paperwork, inspections, and
fees. Organic farming methods often result in lower yields compared to
conventional farming due to the avoidance of synthetic fertilizers and
pesticides. Organic farmers frequently practice crop rotation and cultivate
diverse crops to maintain soil health, which can require more planning and
management. Organic farmers use natural methods to control pests, which may be
less efficient and require more frequent monitoring.
Recent Developments
- In 2021, Organic Prairie
launched organic ground beef in the US, which is pre-seasoned with all-organic
spices.
- In 2023, Remedy Drinks
launched Berry Blast Energy and Tropical Twist Energy drinks, that are made
with organic ingredients including raw green coffee bean extract and ginseng which
delivers an organic, and all-natural energy drink option. Both energy beverages
are 100% plant-powered ingredients to fuel feel-good energy.
Market Opportunities
- Consumers are becoming more
health-conscious and seeking food options perceived as healthier and more
natural. Organic food is often seen as a healthier choice due to its lack of
synthetic chemicals and pesticides. There is a growing awareness of the
environmental impact of conventional agriculture, leading consumers to support
organic farming practices that prioritize sustainability and conservation.
Consumers are increasingly concerned about the origin and production methods of
their food. Organic certification provides transparency and assurance of food
safety. Younger generations, particularly Millennials and Gen Z, are more
likely to prioritize organic and sustainable food choices, influencing overall
market demand. Retailers and foodservice providers have responded to consumer
demand by increasing their organic food offerings, making organic products more
accessible to a broader audience. Social media and online platforms have played
a role in educating consumers about the benefits of organic food, leading to
increased interest and demand.
- The companies in the United
States organic market have an opportunity to expand their business by launching
different organic beverages in the country. For instance, Organic fruit juices
like orange juice, apple juice, and mixed fruit blends, Organic herbal teas,
green teas, and black teas, Organic almond milk, soy milk, oat milk, and other
plant-based milk alternatives, Organic coconut water, Organic energy drinks,
etc. The organic beverages market continues to expand as consumers prioritize
health, sustainability, and environmentally friendly choices in their beverage
selections. Businesses that offer a diverse range of organic beverage options
and focus on transparency and sustainability are likely to find success in this
growing segment of the organic food market.
Market Segmentation
The United States Organic
Food Market is segmented based on product type, distribution channel, region
and competitive landscape. Based on product type the market is segmented into organic
fruits & vegetables, organic meat, poultry & dairy, organic processed
food, others including pulses, cereals, etc. Further, based on distribution
channel the market is fragmented into supermarkets/hypermarkets, Specialty
stores, grocery stores, e-commerce and others, including departmental stores,
direct selling. Based on region the market is divided into South, West,
Midwest, Northeast.
Company Profiles
Sprouts Farmers Inc., General
Mills, Inc., The Hain Celestial Group, Inc., Amy’s Kitchen, Inc., Aurora
Organic Dairy, Eden Foods, Inc., Clif Bar & Company, LLC, Harris Teeter,
LLC, Danone North America Public Benefit Corporation, Organic Valley are some
of the leading companies in the United States organic food market.