Organic fresh produce is booming despite total grocery store dollar growth may have climbed only two percent in the last year.
The Organic Produce Network (OPN) and Nielsen, have released new data showing organic produce sales have set new records, totaling $5.6 billion in 2018, far exceeding the status quo. And the year ended on a particularly high note as sales soared 13 percent the final week of the year.
The OPN notes it is particularly interesting is an impressive two-thirds of all produce commodity groups increased organic sales year-over-year which indicates this is not an isolated incident. At the same time, organic growth occurred in these three categories despite a decline in conventional sales.
According to a press release, fresh produce represented 26 percent of total store organic sales, and a growth rate of 8.6 percent was on par with total store organic, suggesting a continued movement toward mainstream demand across product consumption.
In terms of absolute dollars, blueberries saw the greatest increase followed by prepackaged salads. Many popular organic categories exceeded $20 million in dollar growth—among them organic bananas, apples, and grapes.
“Although organic accounted for 10.1 percent of total produce sales, it’s driving a disproportionate amount of growth within the produce department,” said Matt Lally, Associate Director at Nielsen. “In total, 43 percent of total produce growth occurred from organic items which equates to an additional $450 million sold.”
OPN noted in its press release, organic isn’t a given recipe for success. Products like strawberries and tomatoes experienced far greater growth in the conventional offering, but a closer look reveals how important pricing is for these categories. Prices varied widely—ranging from $1.97 to $3.38 per pound between conventional and organic tomatoes and $2.26 to $4.26 for conventional and organic strawberries.
“When you compare this difference with commodities that experience a high organic growth rate such as grapes, the difference is striking,” noted Lally “Conventional grapes rang in at $2.18 per conventional pound compared to $2.94 per organic pound. Clearly there’s a strong connection between the growth of organic and the price premium with its conventional counterpart.”
In addition to room for growth in the strawberry and tomato category, onions, bell peppers, watermelon, and mandarins are all disproportionately under-represented in organic sales compared to the total produce average. And OPN noted that making organics widely available during key periods like summer holidays, Thanksgiving, and Christmas is a great way to reach more shoppers.