Natural and organic foods are one of the fastest growing market segments in the United States, growing at triple the rate of other food sales.
Natural and organic foods have topped sales records continuously over the past decade. This growth is expected to continue as more and more consumers become aware of the benefits of organic foods and as natural and organic foods become more accessible.
In 2015 the organic foods market grew 11% over 2014, selling $43.3 billion dollars in food products in the United States. In 2016, sales topped $47 billion, showing a similar growth rate of around 10%. The organic and natural food category far outpaces the entire food category as a whole, which showed only a 3% growth over the same period.
Consumer demand has risen at an even faster rate. In the last two years, supply of organic food products has been unable to meet the demand, and supply shortages and infrastructure issues have plagued the industry. There is a clear need for more suppliers of quality organic food products in America, as well as a strengthened network of organic food distribution and sales. Huge changes are being made in this arena and it is likely that this will lead to even greater exponential growth of the organic foods market.
The largest category of organic foods is produce, accounting for approximately 30% of all organic food sales. It is now estimated that around 13% of all fruits and vegetables sold in the United States are organic. The second largest organic category is dairy, accounting for 15% of organic sales.
The two categories seeing the greatest amount of growth, however, are drinks and snacks. Drinks and snacks have always been popular among American consumers and as Americans take more strides toward healthy living and clean eating, the demand for these goods is skyrocketing. The organic drink market has seen a 35% growth rate year over year, organic snacks at 16%.
Non-food organic products are also seeing equivalent growth patterns, as more consumers look for the organic label on their nutritional supplements, cleaning products, cosmetics and even clothing.
While much of the growth in the organic foods market segment can be attributed to the massive cultural shift toward healthy eating, the availability of organic and natural foods is a significant factor. In the last few years, more stores have been offering a greater selection of organic goods. Where organic foods once were a specialty item reserved for high-dollar health food stores, consumers now expect to find reasonably priced organic items at all of their local food stores. Big box stores, mass market retailers and large grocery chains have all picked up on the popularity of organic foods and are stocking more organic options than ever before.
Additionally, catering companies, restaurants, and other hospitality industries have increased their usage of organic foods to keep up with demands. This provides a massive commercial wholesale avenue for organic food suppliers.
Overall, the trends in organic food purchasing look as though the organic and natural foods frenzy is sure to continue and expand. Improved infrastructure and increased channels of distribution will pave the way for even greater growth in this area. As large corporations, such as Walmart and Amazon (which recently purchased Whole Foods Market) become greater presences in the organic foods market segment, the availability of organic foods will increase, fueling the fire of exponential market growth.