Edible Monterey Bay

Organic Produce Outlook Just Keeps Getting Brighter

December 18, 2018 – Speakers at the second Organic Growers Summit, held Dec. 12–13 at the Monterey Conference Center, gave the 900 organic farmers and agricultural service providers in attendance a lot to be encouraged about: Growth of the organic produce sector continues to vastly out-perform conventional and several factors, they argue, should ensure significant gains in 2019 and beyond.

Today organic food overall, while rapidly growing, still represents just 5.5% of all food purchased in the United States.

But the total dollars spent on organic produce during the year ending in November grew to 13.9%, and the sector is growing 5 to 7 times the rate of conventional, according to Brian Lechner, vice president–client consulting for Nielsen, who spoke on the panel Organic Data Dive: A Look at the Numbers Driving Decisions on the Farm. (The Western region that includes California purchased the most organic produce, 17.5% of all sales, while the Midwest bought the least organic produce, 11.6%.)

Nielsen also found the biggest organic produce growth in the past year has been in fruit, which was up 15.1% versus a year earlier. Blueberries took the lead with a jump by nearly one third, to a remarkable $324.5 million in sales. Bananas and grapes also jumped by more than 20%, and apples and avocadoes grew by more than 15%. Organic vegetable sales grew less, but still by a hefty 8.2%, with mushrooms, potatoes and celery leading the way and kale and mixed vegetables falling slightly.

“We’re just at the beginning, probably the third inning,” said keynote speaker John Foraker, the CEO of Once Upon a Farm, a fresh, cold-pressed organic baby food maker, and former CEO of Annie’s, Inc.

So what’s driving all this growth?

Daniel Oxenham of Piper Jaffray investment firm explains consumer attitudes towards organic

For starters, Nielsen found in a September 2018 study that awareness of organic labels and what they mean has reached a near-saturation of 97%. The largest concentration of awareness is among what Lechner called “mindful moms” living in “cosmopolitan centers” and affluent suburbs, raising children under age six. Still, the firm found awareness of organic growing methods was 76% even among respondents with incomes less than $20,000.

Laura Batcha, executive director of the Organic Trade Association, said on the same panel that the word “safe” was the number one term that came up in a survey of 1,200 members of the consumer network that follows the OTA’s news and social media. The second-most used words used for organic by respondents to the survey, done just earlier this month over the period December 6–10, were delicious, clean, fresh and nutritious.

What’s more, such is the passion for organic that more than 35% of survey respondents said “price doesn’t matter” when it comes to buying organic, and only 3% said they would not pay more for organic. Respondents were significantly more likely to say they’d substitute another organic item when they could not find an organic version of what they were looking for, rather than buy a conventionally grown item. And Nielsen also found in an early 2018 study that 49% of consumers surveyed would pay more for products coming with high quality and safety standards, such as the organic label.

But the big driver cited across a few sessions was the millennial generation, which is well known for its values-driven consumer habits and, more specifically, its commitment to organic.

Among the evidence, Nielsen’s Lechner referenced an early 2018 study that found that 83% of millennials versus 66% of generation x and 62% of baby boomers find it extremely or very important that companies take steps to improve the environment. And these kind of attitudes, he noted, are leading to a potent intersection of the goals of “healthy for me” and “healthy for we” fueling organic purchases.

When it comes to the future, Once Upon a Time’s Foraker noted that just 25% of millennials now are parents, but 80% of the group will be parents in the next 10 to 15 years, and with that, they will likely be purchasing even more organic.

Also boding well for the future of organics, Batcha noted, is the trend for organics to be relatively impervious to what she called a current recession-like consumer outlook and mistrust of governmental and corporate institutions caused by higher levels of anxiety about the state of the world. She noted that thus far, the organic seal has been seen as a safe harbor that overrides institutional mistrust.

And at the same time, she noted that organic is being reinforced by many consumer trends and influences that favor organic choices, such as a desire for authenticity, simplicity, sustainability, good health, transparency, value and knowing the origin and story behind a product.

“The good news for organic in all of this is it’s tied to a whole lot of these influences,” Batcha said, and as a result, organics are here to stay. “The consumer is not going to move away from it.”

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