US organic market achieves new record high

In 2015, the market for organic products in the United States reached a new peak of  US$43.3bn (€39.6bn). This figure was revealed in an investigation by the Organic Trade Association (OTA),  the US American manufacturers' association that carried out the study in collaboration with the Nutrition Business Journal in the first quarter of 2016. It tells us that the market share of organic products in the total food market is around 5 %, which is roughly the same as in Germany.

The data show us that the increase in turnover is about 11 % and, therefore, on a par with growth in Germany. This growth equates in absolute figures to a rise of  US$4.2bn (€3.8bn), which is nearly equal to half of organic turnover in the whole of Germany in 2015 (€8.62bn).

Of the  US$43.3bn, retail sale of food accounted for 39.7bn and non-food for 3.6bn. Despite various setbacks, such as procurement hampered by lack of availability, the organic sector was able to grow significantly. This is why the industry appealed to politicians to provide more incentives for farmers to convert to organic, a move that would create greater availability of organics for Americans and further opportunities for growth. The major supply problems are found in the dairy and cereal product segments. As OTA Managing Director Laura Batcha points out, the industry itself did a lot last year to remedy this situation: “The organic industry invested considerable sums in infrastructure, training and improving the supply chain of raw materials in an effort to secure the reliable flow of goods.“ Examples of promoting the value chain in domestic production are the Organic Grain Collaborative – it includes the companies Annie's, Stonyfield, Organic Valley, Clif Bar, Nature's Path and Grain Millers –  and the Organic Fiber Council,  founded on the initiative of the OTA in the yarn and fibre industry. The Council was created with the aim of raising awareness of organic cotton and increasing the the number of fields devoted to growing organic cotton in the USA.

Strong growth of chain stores

Organic products are sold in the USA via the conventional food trade and by the approximately  8,500 wholefood stores. These stores are different from those in Germany in that they also stock conventional goods. Depending on store concept, the proportion of organics might be 50 %, 75 % or as high as over 90 %. The biggest players on the US market are Whole Foods, with around 400 supermarkets, and Trader’s Joe, with 450 supermarkets. In the conventional trade we think of Walmart, Krogers and Costco as the biggest players that also sell organic goods. Although the big players are expanding all the time, the number of regional chains is also on the increase, as is the case in Germany, explains Stefan Hauke, who runs a consulting agency in North Carolina. For example, in the whole country there are around 200 consumer cooperatives that operate their own wholefood supermarkets. Among the regional chains are Sprouts, with 200 stores, The Fresh Market (170 stores) and Natural Grocers (100 stores). Smaller chains are Earth Fare with 35 outlets, Fresh Thyme ( 20), New Seasons ( 20) and Mrs. Green‘s (20). 

The product groups fruit and vegetables remained in first place with sales of US$14.4bn. This sector has always been the entry point for organic products because here we can readily appreciate the connection between growing a crop in the fields and the product in the stores for the consumer. The share of organic products in the total US fruit and vegetable market is an astounding 13 %. Fresh juices and drinks registered the highest growth of all categories. Here there was a real explosion in turnover, and growth reached 33 %. But condiments too rose by 18% and passed the one billion dollars mark. The dairy segment raised its profile with growth exceeding 10 % and achieved turnover of US$6bn. Here  too organic scores with a share of 15% of the total market. “Fresh products straight from the farm, especially fruit, vegetables and dairy products drive the market and account for over half of organic turnover,“  says the delighted OTA boss  Batcha. But smaller segments too have registered good growth figures, an example being snacks. 14% more snacks were sold than in the year before, reaching a figure of US$2.3bn – three times as much as ten years ago. (Picture: "Garden Market" in Park City (Utah))

Garden Market in Park city (Utah). Photo Kai Kreuzer

More and more consumers are buying natural products

What is also very pleasing is the trend of not only eating organic but of people embracing the  idea of eco in their lifestyle in general. Eco goods are becoming increasingly popular and now constitute 8.2% of total organic trunover. The product group includes first and foremost natural textiles and organic food supplements.  The conviction of OTA's managing director: “Organic is a bright star in our agriculture and the economy of the USA. Our success will continue to rest on the solid foundation of committed industry participants, transparency and convincing organic guidelines that consumers can trust.“

Possible compulsory labelling for GMO divides the population

Whereas the discussion about the labelling of genetically modified food has died down in Europe,  since these products now have to be declared, the discussion about compulsory labelling is in full swing in the USA. There have already been referendums  in several states that, from the point of view of the advocates of  labelling, have been lost by a narrow margin (49 % to 51 %). This is attributed to the huge financial superiority of agro-industry and the food industry. That was the case in California in 2012, Washington State in 2013 and Oregon in 2014. In California the opponents had five times as much money at their disoposal (US$46m) as the advocates of labelling.

However, the breakthrough finally came last year with a victory in Vermont. In Maine and Connecticut too, similarly in progressive New England, the referendums  achieved positive results. Referendums are currently being held in half of the federal states. Coordination has been taken over by the campaigning alliance “Right to know“   (information about the referendum in Minnesota can be accessed here: (www.righttoknowmn.org)

Vermont: the first state with compulsory labelling from July

From July 2016 things will get serious for the food industry. From that date GMO foods must be labelled in the state of Vermont. But since most food products come from firms that sell them not only in Vermont but across the whole of the USA it is expected that labelling will become established step by step in all states – through the backdoor, you might say. At least, this is what the advocates of compulsory labelling are hoping for.

In the meantime,  we're seeing the increasing spread of poisitive free-of-genetic-engineering labelling. Now thousands of supermarkets in the USA voluntarily stock products that are labelled free of genetic modification – an orange butterfly on a green stalk. Up-to-date information on the stage discussion has reached is provided by the internet portal Non GMO Project (http://www.nongmoproject.org).