Organic grocery sales in the U.S. totaled a record $61.9 billion in 2020, jumping by 12.4% from 2019 and outpacing the previous year’s growth rate by more than 7%. New Jersey grocers saw the uptick firsthand, according to The Organic Trade Association’s 2021 Organic Industry Survey, released on May 26.
“Organic is definitely on the continued upswing and moving along steadily [with] additional SKUs being added as they become available by my primary supplier, UNFI,” said FoodCircus Super Markets Inc. President and Chief Executive Officer Lou Scaduto, who owns and operated five supermarkets.
Scaduto looks to UNFI for more organic offerings and brings them into the store to see how they sell. And like conventional products, if they sell, they stay, if they don’t, they go. “But honestly there’s not a lot of discontinuing in natural organic. Conventional grocery has growth, but not to the pace that natural organic has,” Scaduto said.
The COVID-19 pandemic caused a dramatic shift in dollars overnight from restaurants to grocery stores, and supply chains suffered earlier for traditional grocery than organic. “If a grocery store was out of the conventional nonorganic version, [customers] were more willing to reach for the organic version … so some of it was forced,” said Lisa De Lima, vice president of grocery at Mom’s Organic Market, a Rockville, Md.-based chain with a location in Cherry Hill. “But some of it was experimentation. Not getting to go out to restaurants, this was the way people got their entertainment for a while – people were locked down, and food was it,” De Lima said.
Growth spanned various sectors. Total sales of organic fruit and vegetables totaled $20.4 billion, including a more than 28% jump in sales in the freezer aisle. Sales of organic meat, poultry, and fish rose almost 25%, totaling $1.7 billion.
As baking trended, so too did organic flour by 30% and sales of sauces and spices rang up $2.4 billion as folks figured out how to make their home cooked meals more flavorful. Organic spices in particular jumped 51%, more than triple its growth rate in 2019.
“The pandemic caused abrupt changes in all of our lives. We’ve been eating at home with our families, and often cooking three meals a day. Good, healthy food has never been more important, and consumers have increasingly sought out the Organic label. Organic purchases have skyrocketed as shoppers choose high-quality organic to feed and nourish their families,” said OTI Executive Director Laura Batcha at Natural Products Expo West, where she presented survey findings.
According to Angela Jagiello, director of education and insights for OTI, the only thing that constrained growth in the organic food sector was supply, “Across all the organic categories, growth was limited by supply, causing producers, distributors, retailers and brands to wonder where numbers would have peaked if supply could have been met!” Jagiello said, noting that supply chain issues in packaging including bottle lids, pouches, and corrugated cardboard, along with workers and truckers, further prevented producers from beefing up offerings.
On whether or not the uptick is here to stay or if it was a COVID fluke, NPD Group Executive Director and food trends expert Darren Seifer said the numbers are similar to figures he’s seen in the rest of the grocery and perishable foods world.
“What I will say is in prior recessions, organic foods typically didn’t do well because of their inherently higher prices. This time, I think what happened is consumers weren’t spending on the experiential like travel, movie theaters, and restaurants quite frankly, so there was a bit more money to go into the home,” Seifer said.
NPD found the percentage of people trying to get organic foods in their diet hasn’t moved from 20% for at least the last six months, he said. According to the Food Marketing Institute’s most recent Grocery Shopper Trends Report, though, nearly half of consumers – 49% – say they are putting more or somewhat more effort into selecting nutritious and healthy options.
“Consumers went through a journey during COVID. At the beginning of the pandemic, they were gravitating toward more indulgent items like ice cream, things related to baking, salted snacks, and crackers,” Seifer said. “Interestingly enough, as we start to emerge from the pandemic … consumers are trying to undo the behaviors from the beginning the pandemic. Starting in March of this year, we started seeing increases in sales of things like salads and fruit.”
NPD numbers show that sales of organic foods and beverages took a dip during the 2008 recession but had been on a steady upswing since that was resolved until the beginning of 2020. “Perhaps the trend will continue, but 2020 told us that anything can happen, so we’ll just have to keep watching it,” Seifer said.
Scaduto attributed organic sector growth to the education, pointing to a younger generation of consumers. “The young mothers of today are really, really gravitating toward that with their children. I’ve got one granddaughter now and my daughter-in-law is always like, ‘it has to be organic, has to be natural,’” he said.