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Organic Food Sales Continue Global Growth/Locally Sourced Foods and Farm to Table Increase in Popularity, Business and Industry Trends Analysis

The Research Institute of Organic Agriculture (FiBL) reported that organic food sales reached almost $132.25 billion worldwide in 2021 (latest data available), up from approximately $100 billion in 2018.  The term “organic” typically refers to crops grown without pesticides, herbicides or fungicides.  Food that bears an organic label must meet criteria set by the U.S. Department of Agriculture (USDA).  Specifically, these products must be at least 95% free of artificial flavors, colors, preservatives or fertilizers, synthetic pesticides, irradiation (germ-killing radiation) or genetically modified ingredients.  The U.S. is the largest single market for organic food and beverages, and reached a new high of $63 billion in sales in 2021 according to the Organic Trade Association.
While the organic sector has been growing rapidly, it remains a relatively small segment of the total food industry.  Growth has been led largely by small companies that were able to expand over the years, and later were often acquired by food industry giants.  Cereal company Kashi, acquired by Kellogg, is an excellent example.  More recently, major food and drink companies are experimenting with launching their own organic brands.  Coca-Cola acquired Honest Tea for example, which later launched the Organic Honest Fizz line of soft drinks.  Simple Truth is Kroger’s in-store brand of organic foods.
Foods certified as “natural”, as opposed to organic, may have been exposed to artificial fertilizers, synthetic pesticides, irradiation and genetically engineered ingredients.  With regard to meat and dairy products, the organic label requires that livestock be fed only organic grains or grasses, and that they be free from growth hormones and antibiotics.  Livestock also must have access to the outdoors.

Internet Research Tip:  Organic Foods
The Organic Trade Association, www.ota.com, offers a wealth of information about the cultivation and sale of organic foods in North America.

     Organic foods generally sell at higher prices than traditionally grown foods.  A growing number of consumers, individuals and restaurant operators alike tout organic foods as having superior flavor and texture.  Other proponents cite the health benefits of avoiding chemicals and potentially poisonous treatments used as pesticides.  There is currently no research data to support these claims.
The organic trend plays particularly well in a segment of the population referred to as “LOHAS,” that is, consumers who attempt to practice a lifestyle of health and sustainability.  This is a well-educated group with significant purchasing power that would be interested in products such as hybrid automobiles, renewable or high-efficiency energy systems, and “Fair Trade” coffee.
One trend in marketing organic produce in America is called Community Supported Agriculture (CSA).  These are membership-based clubs that are run by individual, local farms.  Typically, for a set weekly fee, members receive a weekly batch of produce.  For passionate consumers, this may be the best way to get the freshest-possible produce while having the greatest possible knowledge about how and where the produce was grown.  Delivery methods vary widely.  In some CSAs, members help to pick the produce at the farm itself, or they travel there to pick up their basket of produce.  In more expensive memberships, members receive door-to-door delivery.  Upscale CSAs may charge a substantial initiation fee, and virtually all of them limit the number of members.
Local harvest markets are popping up in cities and towns across the U.S.  Local Harvest, www.localharvest.org , is a web site that lists farmer’s markets, farms, CSAs, grocery/co-ops and more, including market schedules and locations.  The site also has an online store offering CSA subscriptions, meats, produce, seeds, coffee and teas, among other things.
Organic products may have limited shelf life as they contain no preservatives.  Consequently, they must be picked and/or packed when they reach optimum freshness and quickly shipped to nearby markets to avoid spoilage. 
While supermarkets, such as Whole Foods Market (now owned by Amazon), that position themselves as sellers of more natural foods had the early lead in organic food sales, the growing consumer interest in organic products quickly inspired competition from major chains such as Kroger.  Large sections of organic produce are now common in everyday supermarkets.
Major grocery store chains such as Kroger, Walmart, Whole Foods and Costco are enthusiastic sellers of organic foods, and they are large enough to contract with multiple organic farmers.  Since they operate store locations throughout the U.S. and beyond, they are therefore close enough to suppliers to take advantage of the small window of opportunity before organic products spoil.
Major food producers who have long sold traditionally grown products are jumping on the lucrative organic bandwagon.  General Mills, for example, sells Cascadian Farm and Muir Glen organic brands throughout the U.S.  Organics are also crossing oceans.  Take French food company Danone SA, for example.  Its Stonyfield Farm yogurt is made from milk from dairies in France and Ireland and then shipped to North America as well as to retailers in Europe.

SPOTLIGHT: Earthbound Farm
One of the largest growers of organic produce in the U.S. is Earthbound Farm, www.ebfarm.com, founded in California’s Carmel Valley in 1984 by two young entrepreneurs who moved cross-country from Manhattan.  It now has farm locations totaling almost 45,000 acres, primarily in California, Arizona and Mexico.  One of its mainstay products is salad greens, and it processes 30 million salad servings each week.  Its products are available in 75% of America’s supermarkets nationwide.  The company is a subsidiary of Taylor Farms.


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