Organic Food Business Trends

Following last year’s 12% hike, the U.S. organic food market growth doesn’t seem to be slowing down. In fact, certain reports state that the organic food market should continue to grow on the global scale at a CAGR of over 16% through 2020 as an increasing number of people continues to wake up to the benefits of 100% clean produce and beverages. The figures are crystal clear: in case the popularity of organic labels persists and grows further, the global food industry’s future will be painted in cleaner, healthier, and tastier shades. Here’s a brief overview of recent organic food business figures and expectations for further market developments in the years to come.



The Main Engines of Organic Growth

Despite somewhat higher retail prices, more and more people around the world are warming to the health benefits of organic products, and the change of heart is the main engine fueling the dynamic organic food market growth. Another factor that impacts revenue rise in organic food business worldwide is a growing awareness of the extent of pollution caused by classic farming and food production methods. The steady organic food market sales increase is therefore good news for all the players in the food marketing channel and the environment as a whole.

Judging by the current market outlook, we’ll be seeing scores of organic brands emerging on the horizon in the years to come, ready to roll out a highly diversified product offer in order to cater to the growing needs of end-users who value quality more than anything.

Biggest Growth by Food Category

Viewed by food group, the category of organic fresh juice and beverage recorded the fastest and most extensive growth in the U.S. of late, scoring a 33.5% hike in 2015 alone. As for organic produce, it managed to bring home a double-digit growth rate in 2015, with 10.6% in total sales increase and a whooping 13% stake in the overall U.S. produce market in the said period. Among the major organic food groups, condiments recorded most rapid expansion, with 18.5% growth in sales which set an all-time high for the niche industry in the U.S. for the first time. Organic dairy also recorded substantial sales increase in 2015, scoring a 10% hike and rising to account for 15% of all organic food sales in the period.

Based on the figures, the U.S. organic market growth in the time to come will be fueled by dairy and produce sales growth, and brands looking to bring green profits home should reconsider their production methods and product labels and certificates while the market demand is still large enough to accommodate for the switch to organic food production.

Roadblocks and Milestones Ahead

While the organic food industry looks like it is yet to see its golden era, farms and producers who decide to jump on the no-chemicals wagon in the years to come will have to conquer a few initial challenges before they get to scoop the profits for their green work. For instance, farmers who make a decision to go organic with their crops should be prepared for the initial costs and preparatory procedures, as they will have to complete soil testing and geotechnical laboratory exams before they can embrace organic farming procedures. As for food manufacturers eager to board the organic boat, they will need to pass a range of chemical residue tests to make sure that the production lines and food processing procedures in their plants are compliant with valid regulations before their organic certificate applications are approved. 

Is Future Food Truly 100% Organic?

Although the global organic food market is expected to continue growing in the years to come, it will take years for it to overcome fragmentation and for national food safety authorities to curb abuse of organic labels by producers who value profits more than consumers’ trust or wellbeing. Unfortunately, many food brands that advertize their products as 100% natural are still not true to the organic form. In fact, a survey of 2005 USDA inspection records carried out by Wall Street Journal back in 2014 found that as many as 38 out of 81 accredited certifying entities failed to follow Agriculture Department standards when testing organic farms and food suppliers. In this context, the global organic food industry will have to cover a lot more ground before it hoists the 100% chemical-free flag on its mast.

The organic food market is growing fast both in the U.S. and in the rest of the world, and though the rise of 100% pesticide- and chemical-free, non-GMO, and no-gluten labels is still not uniform across regional markets, it’s clear that the future of food business will be far cleaner and more lucrative for every link in the marketing chain. Still eating pesticide-laced broccoli? Good luck with that.