Sales growth of natural, organic products slows, but still on track to surpass $300bn by 2023 –

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Natural Products Expo East
By Elizabeth Crawford contact
24-Sep-2021 – Last updated on 24-Sep-2021 at 16:06 GMT
Related tags: expo east, Organic
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“Despite the pandemic, and in some ways because of the pandemic, [2020 was an] amazing year for us … with total industry sales growing 12.7% to $256b,”​ New Hope’s senior VP and market leader Carlotta Mast said yesterday at Natural Products Expo East in Philadelphia.
She explained to in-person and virtual event attendees that much of that surge was due to last year’s pantry loading and brand exploration due to limited supplies of more familiar products and a desire to bring something new into their homes.
But, she added, as the threat of the pandemic eases demand for natural and organic goods remains strong even as sales growth slows.
The pandemic “continues to positively impact the industry today. People tried those new brands, and in many cases they stuck with them, especially those across the food and beverage categories,”​ she said. “In addition, health and wellness in supporting our immune health became top priorities for us during the pandemic, and this continues to also persist and help grow our industry in 2021.”
The industry’s sales in 2021 are projected to grow 6.6% to $271b, which is slower than 2020 but still has the segment on track to surpass $300bn in sales by 2023 – suggesting the estimated $9bn sales growth attributable to the pandemic last year was just the beginning, and will continue to lift industry sales over the next three years and beyond, Mast said.
A “major contributor”​ to the natural and organic industry’s growth was food and beverage, which drove more than 70% of the industry’s total sales in 2020 and remains a strong driver in 2021, Kathryn Peters, executive vice president of SPINS, said at the conference.

She explained that natural and organic and functional foods and beverages are on track to reach $200bn by 2022 – outpacing “in a pretty significant way total US food and beverage sales.”
She added natural and organic food and beverage sales are growing about 7% in 2021 – lower than the 9% growth last year, but still notably higher than the 5% in 2019 before the pandemic.
“We aren’t expecting that to drop back anytime soon,”​ Peters said.
Despite industry leaders’ optimism for the natural and organic industry going forward, Mast cautioned stakeholders not to take consumer interest in their segment for granted – but rather, she said, they need to continue to innovate and offer products that meet evolving consumer demand.
For example, while immunity-boosting claims may have drawn many consumers into the segment in the past 18 months, what will keep them engaged are products that support sleep, stress and children’s health – all of which remain pain points despite vaccination options for adults.
Peters noted that industry already is innovating to meet these needs. In the beverage segment, SPINS is tracking a 51% increase in immunity boosting claims with elderberry, echinacea and camu camu leading the way. Likewise, she said, rest and destress claims are up 36% with ingredients such as CBD, melatonin, theanine and valerian. Finally, the use of adaptogens, including chaga and rishi mushroom, ashwaganda, maca and holy basil, is up 32%, she said.
Peters also noted that as consumers increasingly embrace the idea of food as medicine they are turning to conventional products for the benefits they once sought in the dietary supplement aisle.
For example, sales of ashwaganda in food are up 129.5% to $8.4m in the year ending Aug. 8, 2021. In the same period, SPINS found sales of super mushrooms up 16.1% to $420m, moringa up 14.7% to $2.5m, elderberry up 96.5% to $16.3m and MCT up 50.7% to $146m.
Alongside increased demand for functional ingredients is an ostensibly insatiable desire for plant-based options, according to SPINS data.
“I hear people sometimes say, I don’t want to hear any more about plant-based, but it is still on fire,”​ Peters said, noting that sales of plant-based products in the 52 weeks ending Aug. 8 are up 12.8% to $6.4b. This is outpacing the 4.2% year-over-year increase of food and beverage more broadly.
Peters attributed the plant-based trend’s ongoing strength to consumer belief that the products are better for their bodies and the planet.
“Certainly there are some darlings of the industry right now with oat and other things, and it is just great to see continued ingredients bringing new innovations into plant-based,”​ she added.
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