Slow growth in organic food sales as pandemic wanes

After jumping nearly 13% in the early days of the pandemic, organic food sales rose less than 2% in 2021 as Americans ditched loading the pantry, the Organic said Thursday. Trade Association (OTA). Organic food sales totaled $57.5 billion last year, an increase of $1 billion from 2020.

This is the slowest growth rate in more than a decade for organic, usually one of the most dynamic segments of the food sector. The pandemic has upended the food industry in 2020, pushing consumers to grocery stores while closing restaurants and schools. Shoppers fought shortages by buying extra food when they could. There was a boom in home baking.

“Like every other industry, organic has seen many twists and turns in recent years, but the resilience and creativity of the industry has kept us strong,” said OTA chief executive Tom Chapman. “As pandemic shopping patterns and supply shortages began to ease in 2021, we saw the best performers in categories that were able to remain flexible, despite the changing landscape.”

In releasing its annual report on the organic industry, the OTA said that in 2021 shoppers – instead of stockpiling food as they had during the pandemic – returned to the familiar routine of buying food as they needed it. Food sales increased by 1.8% compared to 2020 and non-food sales increased by 7%.

Fruits and vegetables, the largest organic food sector, recorded sales of $21 billion, up 4.5%. Sales of fresh produce jumped 6% and dried beans, fruits and vegetables increased 6.5%. Overall, 15% of U.S. fruit and vegetable sales last year were organic, the OTA said.

Processors are putting more packaging on organic produce because some shoppers believe it reduces the risk of coronavirus on their purchases. “It is not yet clear whether this trend will continue, as organic food shoppers have historically preferred less packaging and less use of plastic,” the OTA said.

After soaring in 2020, sales of organic dairy and egg products declined in 2021 as supply issues became less frequent, the trade group said. Tighter organic food supplies contributed to higher prices and lower total sales, he said, although sales were still 11% higher than in 2019.

Organic meat sales increased 2.5% to nearly $2 billion. Organic poultry was the best performer in the category, up 4.7% to more than $1 billion.

Sales of packaged and prepared foods fell 5%, “representing a shift from pantry loading to more measured shopping habits,” the OTA said. Canned soups, nut butters and pasta sauce, which followed escalating consumer demand in 2020, saw the biggest declines in 2021. However, baby food sales increased by 11%, to $1.2 billion.

Snack sales, which fell in 2020, rebounded in 2021 as offices, schools and stores reopened. Coffee sales also exploded, rising more than 5% “as Americans increasingly shifted to hybrid and work-from-home models.”

With $2.3 billion in sales, textiles generated 40% of revenue from non-food organic products, a category that also includes dietary supplements and personal care products.

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