
TL;DR: Organic market sales rose to $69.7 billion in 2023, driven by higher prices rather than unit sales. Organic food reached $63.8 billion, led by produce. Grocery and beverage categories also grew, with significant increases in dairy and eggs. Despite economic challenges, organic products remain popular, with room for further growth through consumer education.
Organic Market Grows
In the American organic market, dollar sales hit $69.7 billion last year, an increase of 3.4%, according to the 2024 Organic Industry Survey by the Organic Trade Association (OTA). This report was shared today at their annual meeting in Washington.
Price, Not Units
In 2023, the rise in dollar sales was driven by pricing rather than unit sales, OTA stated. However, many consumers increased their purchases of organic products. Unit sales rose for up to 40% of the tracked products in this year’s survey. Notably, prices for many non-organic products climbed faster than those for organic products, closing the price gap. This trend may boost organic product growth in 2024.
Sales Breakdown
- Organic Food Sales: $63.8 billion
- Organic Non-Food Sales: $5.9 billion
“It’s promising that organic is growing at a similar rate to the total market,” said Tom Chapman, OTA’s co-CEO. Despite inflation and the premium status of organic products, consumers are still choosing organic options amid economic challenges and price hikes.
Room for Growth
Matthew Dillon, the other co-CEO, highlighted the need to educate consumers on the benefits of choosing organic. It’s a straightforward way to address major challenges. This includes accessing healthy foods, improving supply chain transparency, combating climate change, supporting rural economies, and protecting natural resources.
Organic Produce Leads
Produce remains the largest organic category, continuing to be the primary entry point for consumers into the organic market. Organic produce meets the consumer’s desire for clean, healthy food. The importance of non toxic synthetic pesticides is clear when buying organic berries or carrots.
Produce Growth
In 2023, the produce category grew by 2.6%, reaching $20.5 billion. Organic produce now makes up more than 15% of total U.S. fruit and vegetable sales. The top sellers were avocados, berries, apples, carrots, and packaged salads. Organic bananas saw stronger growth than non-organic bananas.
Grocery and Beverages
The second largest food category was the grocery category, with sales of $15.4 billion, growing by 4.1%. This new category includes products formerly under breads and grains, condiments, and packaged foods.
Top Grocery Subcategories
- In-Store Bakery and Fresh Breads: $3.1 billion (up 3%)
- Dry Breakfast Goods: $1.8 billion (up 8%)
- Baby Food and Formula: $1.5 billion (up 11%)
Beverages were the third largest category, posting $9.4 billion in sales, up 3.9%. While non-alcoholic beverages surged, organic wine sales rose by 2.5% to $377 million. Organic liquor and cocktails, though the smallest sector at $59 million, grew over 13%.
Dairy and Eggs
The fourth-largest category, organic dairy and eggs, saw a 5.5% increase, reaching $8.2 billion. They now account for over 8% of all dairy and egg sales. Milk and cream sales were up almost 5%, to $4.2 billion. The organic dairy alternative category grew by nearly 14%, reaching around $700 million in 2023.
Market Trends
At a media briefing, Chapman mentioned that the baby food industry uses all organic apples available in Washington state and is now looking to Canada to increase supply. He noted that meat sales were down, aligning with the rest of the grocery industry. Frozen food sales declined as consumers returned to restaurants. Pet food sales also dropped due to a lack of established USDA standards to give consumers confidence.
Organic sales are on the rise, driven by pricing and increasing consumer demand for healthier, transparent, and environmentally friendly products. The market shows promising growth despite economic challenges, and with better consumer education, there is ample room for further expansion.