Retail sales of organic produce in the U.S. in 2020 were up 14.2% year over year, topping $8.5 billion for an increase of more than $1 billion.
Sales volume was up 16% to nearly 3 billion pounds.
Performance in the organic sector outpaced conventionally grown produce, which increased 10.7% in sales and 9% in volume, according to the Organic Produce Network and Category Partners.
The organizations attribute the increase in organic sales to the pandemic, which changed consumers’ grocery shopping habits.
“The pandemic played an enormous role is surging supermarket sales, and organic fresh produce was a major contributor to that growth,” Matt Seeley, CEO of the Organic Produce Network, told the Capital Press.
Lack of foodservice had more people eating at home, and consumers were looking for healthful, safe and wholesome meal options for their families, he said.
It also elevated sales of all food at supermarkets, and retail is absolutely the main driver of organic produce sales, he said.
“Foodservice to date has not been a big user of organic. It’s the final horizon in terms of getting adaptation,” he said.
Challenges related to supply and availability as well as price are major obstacles for organic in foodservice, he said.
Whether organic sales will decline from the current level once the pandemic is under control is the “$64,000 question,” he said.
“Following a decade where sales (increases) have been at double-digit levels, in 2019 things were starting to level off some and increases were modest compared to the rest of the decade,” he said.
But he said he thinks the future for organics is bright, as household penetration across the U.S. has a long way to go.
Of the top 10 organic sales and volume categories, nine had double-digit growth in 2020.
The top three sales categories in value were packaged salads at nearly $1.5 billion, berries at about $1.3 billion and apples at $620 million — each with double-digit percentage gains over the previous year.
Among the categories showing the largest year-over-year sales increases were herbs and spices, up 26%, and potatoes, up 21%. Organic grapes saw a decline of 6% in both sales and volume.
On the volume side, bananas continued to be the biggest mover and increased 16%. Volumes increased 29% for herbs and spices and 20% for berries.
All regions of the country experienced double-digit growth, with the West showing the biggest increases in sales, up 16.8%, and volume, up 17.5%.
“The continued strength of organic fruit and vegetable sales through 2020 despite pandemic-related economic challenges underscores the depth of consumer demand for organic products,” Steve Lutz, senior vice president of insights and innovation at Category Partners, said in a press release.
“As we hopefully see the pandemic begin to subside into 2021, the market opportunities for fresh organic fruits and vegetables in the coming year remain outstanding,” he said.
There are wide swaths of the U.S. where organic fruits and vegetables have limited distribution and narrow assortment in many conventional supermarkets. There are significant growth opportunities both by gaining distribution and supplying latent consumer demand, he said.