Nelson Pereira[/vc_column_text][vc_column_text css=».vc_custom_1724794013331{margin-right: 70px !important;margin-left: 70px !important;}»]The U.S. organic market hit a record high in 2023, with sales reaching an estimated $70 billion. Despite inflation, consumers continue to prioritize health and sustainability, opting for products with the USDA organic label. Organic product sales are growing at a pace similar to the overall market.Organic product sales reached an estimated $70 billion last year, according to the Organic Trade Association.
U.S. Certified Organic Product Sales Approach $70 Billion in 2023, Setting New Record
Certified organic product sales in the U.S. neared $70 billion in 2023, marking a new high for the sector. According to the 2024 Organic Industry Survey released on Tuesday by the Organic Trade Association (OTA), the dollar sales in the U.S. organic market reached $69.7 billion last year, up 3.4%.
Despite ongoing price inflation observed in retail aisles, consumers remained steadfast in their priorities for the products they chose for themselves and their families, placing a high value on health and sustainability and seeking out the USDA organic label. The organic market recalibrated its supply chain and adjusted to business costs partly through increased retail prices. The industry continued to grow, with organic food sales totaling $63.8 billion in 2023 and non-food organic product sales amounting to $5.9 billion.
“It’s encouraging to see that organic products are growing at nearly the same rate as the overall market. Despite inflation and the fact that organic is viewed as a premium category, current growth indicates that consumers are continuing to choose organic amid economic challenges and price increases. Although organic is now a mature sector, there is still significant room for growth,”.
In 2023, the increase in dollar sales in the organic market was largely driven by higher prices rather than unit sales. Nonetheless, consumers increased their purchases of many organic products, with unit sales for up to 40% of the products tracked in this year’s survey showing growth. The survey also revealed that the prices of many non-organic products rose faster than those of organic products. This indicates that the price gap between conventional and organic products is narrowing, which should help drive the growth of organic products in 2024.
Top-Selling Organic Products
Organic Product Categories
Produce: Organic produce maintained its position as the largest organic category in 2023, continuing to be the primary entry point for consumers into the organic market. Organic products fulfill the consumer desire for clean and healthy food, and the critical benefit of organic products—free from synthetic toxic pesticides—is easily understood when purchasing items like organic berries or carrots. In 2023, the produce category grew by 2.6% to $20.5 billion. Organic products now account for over 15% of total U.S. fruit and vegetable sales. The top sellers in the organic produce section were avocados, berries, apples, carrots, and packaged salads, with organic bananas experiencing stronger growth in 2023 compared to conventional bananas.[vc_single_image image=»6159″ img_size=»full» alignment=»center»][/vc_column][/vc_row][vc_column_text css=».vc_custom_1724795588243{margin-top: 40px !important;}»]Packaged Goods: The second-largest category of organic foods was groceries, with sales reaching $15.4 billion, representing a 4.1% growth. This category now encompasses many products previously categorized under bread and grains, condiments, and packaged and prepared foods. With 21 different subcategories, nearly 40% of grocery sales were driven by three main areas: in-store bakery and fresh bread, which saw sales of $3.1 billion for a nearly 3% gain; dry breakfast products, which grew around 8% to $1.8 billion in sales; and baby food and formula, which reached $1.5 billion for a significant increase of nearly 11%.
Beverages: Beverages were the third-largest organic category in 2023, with $9.4 billion in sales, a 3.9% increase. As always, this category was a hub of innovation, with functional beverages—whether for enhanced hydration or mental focus—playing a prominent role. There was also a rise in new organic non-alcoholic drinks and mocktails. On the other hand, organic wine sales grew by 2.5% to $377 million, and organic spirits and cocktails, though still the smallest sector of beverages at $59 million, saw growth of over 13%.
Organic Dairy and Eggs: Organic dairy and eggs, the fourth-largest category in the organic food market, offer clean and ethical protein sources with a lower environmental impact. In 2023, sales of organic dairy and eggs increased by 5.5%, reaching $8.2 billion. Organic dairy and eggs now represent over 8% of all dairy and egg sales. Sales of organic milk and cream rose nearly 5% to $4.2 billion, and the organic dairy alternatives category grew almost 14% in 2023 to about $700 million.
Non-Food Organic Products: The growth pace of non-food organic categories was mixed. Personal care products experienced the highest growth in 2023, with sales reaching $1.3 billion, a nearly 7% increase, while organic supplements saw a more than 4% rise to $2.1 billion. Organic fiber remains the largest segment within non-food organics in the U.S., accounting for 40% of the category’s sales in 2023, around $2.4 billion. Sales of organic fiber remained essentially stable year over year, not due to a lack of buyer interest but rather due to supply chain issues.[vc_single_image image=»6160″ img_size=»full» alignment=»center»][/vc_column][/vc_row][vc_column_text css=».vc_custom_1724795696187{margin-top: 40px !important;}»]Organic Products Stand Out Amidst a Growing Sea of Labels
The number of claims and labels continued to rise in retail aisles in 2023, but the organic seal remained prominent among consumers. A growing consumer focus on personal and family health, sustainability, and the desire for clean products free from antibiotics, hormones, preservatives, and colorants drove shoppers towards organic products. Increasingly, consumers are aware of the potential health benefits associated with organic foods, and many, particularly Generation Z, are becoming more conscious of the ethical implications of their food choices, seeking products that align with their values, such as animal welfare, fair trade, and support for organic farmers.
Research shows a sustained and growing interest in organic products among Millennials and Generation Z. These generations grew up with organic agriculture and sustainability, and the health of people and the planet is paramount to them. Industry experts see this as an opportunity for organic products, with the sector well-positioned to meet the product attributes and values sought by today’s and future consumers. By 2030, the U.S. population will largely consist of Millennials, Generation Z, and younger generations.
However, the future of organic is not without challenges. The latest term adding confusion to the market is «regenerative.» While regenerative labels are not yet a significant factor for consumers, the attributes they claim to represent—soil health, animal and human welfare, and biodiversity—are already embodied by the USDA organic seal. As new certifications around regenerative agriculture emerge, there is concern about consumer confusion, highlighting the importance of elevating organic education.
Methodology
This year’s survey, conducted in early 2024, was prepared on behalf of the Organic Trade Association by the Nutrition Business Journal (NBJ) of New Hope Network. It involved numerous data sources to create the most comprehensive picture of the organic industry, which largely consists of private companies. Input data included, among other things, point-of-sale data, expert interviews, annual report data, and detailed direct survey data. Approximately 65 companies completed a significant portion of the in-depth survey.
To better represent how products are marketed within grocery aisles, the 2024 report features new categories for organic products. Fresh and non-perishable items that were traditionally part of the packaged and prepared foods, breads and cereals, and condiments categories are now largely included in the new grocery category. Fresh products, the largest organic subcategory, now stand alone, while frozen and canned items are now categorized under groceries.
