Organic Produce Retail Sales on Rise, but Not Necessarily Due to COVID

Organic Produce Retail Sales on Rise, but Not Necessarily Due to COVID

Noticeable gains during the pandemic for retail sales of organic produce have experienced , but it is not necessarily due to the public’s desire to eat healthier.

Category Partners LLC of Idaho Falls, ID has observed the sales increase, which also has been experienced by conventional fruit and vegetables. This may be more the result of shutdowns of other out-of-home choices for purchasing produce.

Category Partners contends organic produce was carrying a slightly higher growth rate than conventional prior to the pandemic and this has remained mostly consistent.

It is hard to say whether consumers are choosing organic fruit and vegetables because they may be perceived to be more healthful than conventional, the company notes. However, organic produce does come with a health perception that often is cited by users as a reason they buy it.

The main reason organic consumers give for buying organic produce is the perceived healthfulness of the product, the firm notes, so it is better for you from a nutrition standpoint, and it has lower levels of pesticide residues than conventional.

Sustainability also comes into play for younger consumers.

The price premium over conventional produce is the primary reason consumers give for not purchasing organic produce.

Shoppers are unlikely to purchase items if the price differential between organic and conventional is too great where they feel they can’t afford organic fruit and vegetables.

Accessibility and occasionally quality are other factors than may affect purchasing decisions.

Bananas are far easily the No. 1-selling organic item in the produce department, followed by carrots and apples.

It is believed bananas lead the pack in large part because they have among the smallest price premiums in the produce department between conventional and organic.

The price differences between organic and conventional vary by commodity.

The per-pound price difference between conventional and organic bananas is 13 cents, the firm reports. The difference for carrots is 38 cents and for apples, 62 cents.

On average, organic item are about double the cost versus a conventional product. In the future the gap is expected to narrow.

From a dollar standpoint, organic packaged salads lead the list, followed by strawberries and apples.

Bananas are No. 8 in dollar sales and carrots come in at No. 7.

Packaged salads have the second-highest price variance between conventional and organic — about an 80% price premium.

The 50% to 60% price premium range is where you see the items that are really driving the volume. Moving outside of that, you can may generate dollars, but you’re going to experience loss of volume.

As far as packaging, the trend away from packaged produce apparently has been disrupted by the pandemic. The long-term trend among consumers, especially younger consumers, seems to be away from plastic packaging.

However, packages that are proliferating, like the gusseted pouch bags, are having tremendous success with consumers.