Organic produce sales still on the rise in spite of inflation

Overview of organic fruits in the U.S. market, complemented by charts from Agronometrics. Original published on November 1, 2023.

Despite higher food prices spurred by inflation, consumers who typically include at least some organic fruits and vegetables in their grocery carts are not giving up on the category. In fact, many are increasing their organic produce purchases.

“Consumers purchasing organic produce are still looking for a wholesome and clean product that is natural and pesticide-free and free of any unnatural growing processes,” said James Braswell, senior category manager of produce and floral for Downers Grove, Ill.-based Fresh Thyme Market. “True naturalist or organic shoppers are also extremely label-loyal, so they’re motivated to shop organic produce because of the brand they’re purchasing.”

The Packer’s Organic Fresh Trends 2023 survey, which polled more than 1,000 U.S. consumers, found that roughly 6 out of 10 respondents purchased organic produce at least periodically during the past year. Among those consumers, 10% indicated that organics represented more than 75% of their annual fruit and vegetable purchases, compared with just 7% who reported the same level of organic buying in the previous year’s survey.

Twenty six percent said that organic produce represented 11% to 25% of their annual fruit and vegetable purchases, compared with 25% of consumers who indicated the same level or organic purchase share a year ago.

Organic Fresh Trends also found that consumers who reported buying at least some organic produce in the past year were willing to pay more for it compared to conventional fruits and vegetables. While 11% said they were not willing to pay any premium, 27% were willing to pay up to 10% more. Nineteen percent said they would pay a much higher premium of 25% to 49% — down slightly from 20% of respondents who indicated likewise in the 2022 survey.

Recent sales figures also show continued consumer interest in organic produce.

Source: USDA Market News via Agronometrics.
(Agronometrics users can view this chart with live updates here)

According to Circana OmniMarket Integrated Fresh multi-outlet data for the 52 weeks ending Sept. 10, 2023, sales of organic produce grew slightly over the previous year. Dollar sales totaled $7.8 billion, which reflects a 0.2% increase. Sales by volume declined 2.6%, and price by volume grew nearly 3%.

Dollar sales for organic fresh vegetables saw a 0.5% increase while volume sales dipped 3.4%, and price per volume increased 4%. Fresh fruit dollar sales remained flat, and volume sales dipped 1.7%. Price by volume for organic vegetables increased by 1.7%.

Comparatively, conventional produce dollar sales totaled $68 billion, up 2.7% during the last 52 weeks, and volume sales declined 0.7%. Price per volume for conventional produce grew 3.4% compared with only 3% for organic. The narrowing price gap between conventional and organic produce likely provided some consumers with an additional incentive to choose organic.

Those on especially tight budgets, however, appear to be choosing conventional fruits and vegetables on more occasions.

“Organic sales perform well at Fresh Thyme Market. However, due to recent changes in the economy and post-pandemic shopping habits, we have seen some changes in organic shopping habits,” Braswell said. “We’re seeing some consumers opt for non-organic produce instead of organics due to the tightening budgets in an inflationary market.”

TOP-SELLING ORGANIC COMMODITIES

Braswell noted that berries, grapes, apples, leafy lettuces and greens are some of the most popular organic produce items for Fresh Thyme customers.

“We also have great support from our loyal shoppers on categories that we only carry in organic, including carrots and mushrooms,” he said.

Braswell has also noticed a trend that is likely tied to consumers’ desire to eat healthfully and avoid pesticide residue.

“Produce items with an edible skin have become popular among organic shoppers,” he said.

Inflation has had an impact on the sales of packaged salads, Braswell said, with some cannibalization occurring as consumers switch to lower-priced conventional chopped kits.

For Hy-Vee, based in West Des Moines, Iowa, the top-selling items for both conventional and organic produce are similar.

“The most sought-after organic fruits and vegetables include spinach, spring salad mix, bananas, strawberries, Honeycrisp apples and all varieties of berries,” said John Griesenbrock, vice president of produce and floral.

The popularity of organic items tends to vary with the seasons, he added.

“Organic squashes are at their peak freshness and demand during the fall, while spinach remains popular year-round,” Griesenbrock said. “Berries and melons, of course, are always in greater demand in the warmer months than other times of year.”

For Organic Fresh Trends respondents who purchased organic produce at least periodically during the past year, the top commodities were sprouts (62%), kale (61%), artichokes (58%), cranberries (58%), Asian pears (57%), papayas (56%) and apricots (53%). Organic commodities ranked near the bottom included sweet corn (29%), watermelon (28%), cantaloupe (27%), potatoes (27%) and onions (27%).

In terms of commodities that consumers purchased as exclusively organic, the top choices included cranberries (28%), papayas (27%), Asian pears (26%), sprouts (24%), artichokes (24%) and kale (22%).

Circana sales figures highlight a variety of consumer preferences when it comes to organics.

At 19%, cooking greens saw the largest dollar sales gain in the fresh vegetable category during the 52 weeks ending Sept. 10, 2023, followed by jicama (up 16%), asparagus (up 12%) and cabbage (up 12.5%). The biggest declines occurred for parsnips (down 69%), pumpkins (down 63%), endive/chicory (down 51%) and okra (down 50%).

Among organic fresh fruit subcategories, stone fruit and tropical/specialty fruit experienced the largest dollar sales declines at 13% and 12%, respectively. Mixed fruit saw the largest increase at 1.4%, and common fruit (including berries, apples, grapes and other noncitrus staples) sales grew 1.2%.

Coconuts (41%), tangerines (36%) and mandarins (36%) experienced the largest dollar sales increases, while dates and pomegranates saw the biggest sales declines at 71% and 32%, respectively.

MERCHANDISING AND PROMOTION TRENDS

When Organic Fresh Trends 2023 asked organic produce consumers about how they prefer organic produce to be displayed at retail stores, 70% said they want to see organics placed in their own separate area. The other 30% indicated that they prefer to see organic produce intermixed with conventional produce and marked with signage. This is consistent with the previous year’s findings.

Hy-Vee promotes organic produce in its stores with a hyperlocal approach.

“Our Hy-Vee Homegrown program works with hundreds of local growers within 200 miles of each store to bring locally grown items fresh from their farms to our stores,” Griesenbrock said. “We know that organic produce shoppers are likely concerned not only with how their produce is grown, but [also] the environmental impact of how that produce is harvested and shipped. By keeping these produce items hyperlocal, we can give organic produce shoppers the best of both worlds.”

Through Hy-Vee’s website, customers can learn about the more than 250 growers that the company works with throughout the Midwest. The Hy-Vee Homegrown landing page includes a map of the market’s grower partners in eight U.S. states, along with grower profiles and videos.

At Fresh Thyme, the focus is on sourcing fresh organic produce items that will capture consumers’ attention.

“We are constantly looking for new items that relate to our loyal customers’ needs and wants,” Braswell said. “At Fresh Thyme, we are committed to bringing the freshest produce to our communities and meeting our shoppers wherever they are on their health and wellness journey.”

The News in Charts is a collection of stories from the industry complemented by charts from Agronometrics to help better tell their story.

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