Report Description

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.