Despite the end of the pandemic and mounting inflationary pressures, organic sales continue to soar. According to the 2023 Organic Industry Survey performed by the Organic Trade Association (OTA), organic food sales hit a record $60 billion. The sector's 4% growth in sales is nearly twice the growth of 2021. Certified organic products now account for 6% of total food sales in the United States.

The prioritization toward personal and environmental health continues to persevere even in uncertain market conditions.

"Despite fluctuations of any given moment, Americans are still investing in their personal health, and with increasing interest, in the environment, and organic is always the answer," stated Tom Chapman, OTA CEO.

All products, including food, cosmetic products, and beverages, are certified by an accredited regulation body to gain a certified organic label. This system reassures that what the consumer buys follows the necessary protocols and standards in organic farming.

Organic Category Highlights

(Data pulled from the 2023 Organic Industry Survey by Organic Trade Association)

Category	Sales (in USD)	Notable Features
Fresh Produce	$22 billion	· Top seller in the organic category. · Organic produce accounts for 15% of total produce sales in the U.S.
Organic Beverages	$9 billion	· The top-selling organic beverage was coffee, hitting nearly $2.3 billion in sales. · The organic soft drink and enhanced drink category saw the most growth at 14%, recording $503 million.
Dairy and Eggs	$7.9 billion	· Increase 7% from 2022. · Organic yogurt sales jumped over 12% to $1.5 billion. · Organic egg sales increased by 11% to around $1.2 billion.
Organic Baby Food	$1.4 billion	· Increase 13% from 2022
Organic Rice, Grains, Potatoes	$387 million	· Up 10%
Organic Dips	$194 million	· Up 18%
Organic Pork	$63 million	· Up more than 10%
Organic – Non-Food	$5.6 billion	· Clothing and Linens account for 40% of sales, at $2.4 billion. · Supplements at $2 billion. · Personal care products rose 5% to $1.2 billion.

Retail Trends in a Nutshell

(Source: Whole Foods Magazine, "Retail Insights 2022")

Compact grocers (stores no larger than 20,000 sq. ft) surge in revenue growth, adding over $1 billion in 2021. Leading stores include Natural Grocers, Trader Joe's, and Aldi.

Aldi is growing steadily towards 2,500 locations. Although it's not as well known for its array of organic options compared to Trader Joe's, that's changing rapidly as they added dozens of private label premium natural organic items at discounted prices.

Natural Grocers reported a 3.8% increase in same-store sales in the first fiscal quarter of 2022, attributing 73% of their sales to their loyalty program.

Independent Retailers and Co-ops remained resilient in a volatile economy. There were around 100 store closures last year, but growth in the remaining stores makes up for the losses. Independent retailers hold onto 4 ^th place in the natural market share. This is mainly due to the exceptional customer service and shopping experience delivered in these stores.

Mass market see success in organic sales. The pandemic added traffic to large chains like Target and Walmart, with a pour-over effect for natural organic sales, increasing over $400 million. The majority of these gains come from vitamins and supplements. Target also adds private label and premium products to their selection.

Conventional supermarkets (Albertson's, Kroger. Publix, Safeway, Wegmans) slow down in growth, with about a 3% change from the year before. Organic sales in this sector made more than $500 million, making it the third large retail segment in the natural organic market share.

Natural grocery chains such as EarthFare, Fresh Thyme, Sprouts, and Wholefoods are experiencing a stall in productivity. Despite adding 42 stores last year, sales have only increased by 1.45%. However, this sector still maintains a significant market share of 29% in the natural food industry.

Vitamin Chains Dwindle in Numbers. Notably, big vitamin giant GNC closed 1300 stores last year. This sector had a 19% decrease in sales, shedding over $500 million. Many vitamin chains opt to go private.

Trends to Watch

Functional, organic beverages: As the "sober curious" movement gains momentum, more people are looking for ready-to-drink carbonated beverages and tonics featuring functional ingredients. Pair that with a desire to regulate stress, mood, and energy levels; you will likely see more products emerge to cater to these unique needs. Beverages will no longer purely be used for hydration and flavour but will have 'boosting' properties on the mind and the body. Functional ingredients will not be limited to beverages but to chips, granola, breakfast items, frozen desserts and more.

Organic soups saw a 14% growth in year-over-year sales. It's a category growing steadily with many products like healthy instant noodles and ramen.

Closing Thoughts

In 1997, organic retail products made around $3 billion in sales.
In 2008, this grew to $21 billion.
In 2022, we hit a record year, surpassing $60 billion in sales at $61.7 billion.

With double-digit growth over the past decade, it seems this trend has taken root and is here to stay. The pandemic may have acted as a catalyst, but people's growing concern for their well-being ensures that the organic movement will keep growing strong. And as more players join the organic market, even the once-modest organic aisles will blossom into vibrant sections that stretch across grocery chains like Walmart, Kroger, and Target. So prepare to embrace a future where the organic world takes center stage and fills our shopping carts with natural goodness.

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