| Source: BlueWeave Consulting and Research Pvt Ltd BlueWeave Consulting and Research Pvt Ltd
New Delhi, Jan. 25, 2022 (GLOBE NEWSWIRE) — The US organic food market is growing at a high CAGR because of the increasing health awareness among consumers. Additionally, a growing concern over the environmental impact of conventional farming due to the extensive use of chemical fertilizers, pesticides, and other substances is driving the market forward…
A recent study conducted by the strategic consulting and market research firm BlueWeave Consulting revealed that the U.S. organic food market was worth USD 52.3 billion in 2020. According to the study, the market is estimated to grow at a CAGR of 8.7%, earning revenue of around USD 95.1 billion by the end of 2027.
The organic food market in the United States is growing because of factors such as increasing health awareness among consumers and increasing environmental concerns due to the heavy use of pesticides, chemical fertilizers, and other chemicals in conventional farming. In addition, the shift towards organic farming is providing lucrative growth opportunities for the US organic food market. According to the 2019 Organic Survey reports, there has been a 17% increase in the number of certified farms in the U.S. between 2016 and 2019. This is anticipated to boost organic food production in the country, further increasing its accessibility, propelling its market growth.
Growing Shift Towards Organic Farming is Driving the U.S. Organic Food Market
Organic farming is gaining significant popularity in the United States. According to the Department of Agriculture’s National Agricultural Statistics Service, there were more than 14,000 certified organic farms in the US in 2016. Additionally, according to the United States Department of Agriculture (USDA), organic food products are now available in nearly 20,000 natural food stores and nearly 3 out of 4 conventional grocery stores across the United States and organic sales account for more than 4% of the total U.S. food sales.
Moreover, according to the 2017 Census of Agriculture by National Agricultural Statistics Service, sales of organic commodities went up by 31% in 2016-2019 with crops sales increasing by 38% during the same period. Furthermore, the Census reports that crops accounted for 58% of organic sales, led by vegetables and fruits. A growing awareness of the adverse effects of chemical fertilizers, pesticides, antibiotics, and other substances in conventional farming is contributing to the shift towards organic farming. Thus, there is a high likelihood that this will increase the penetration of organic foods in the U.S. market, which will boost the overall U.S. organic food market during the forecast period.
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Increasing Availability of Organic Foods in Supermarkets Chains Projected to Boost Market Growth
A recent survey showed that around 82% of Americans buy organic foods and most of the sales is derived through conventional grocery stores. Despite the popularity of online grocery shopping among younger consumers, consumers are becoming more familiar with the availability of organic food in retail stores, club stores, and supercenters. In response, major supermarket chains such as Walmart, Target, Costco, Kroger, and Safeway are adding organic foods to their store shelves, thereby improving consumers’ access to organic foods, which is expected to boost the market growth during the forecast period.
High Cost of Organic Food Products is Expected to Restrict the Growth of the U.S. Organic Food Market
Organic food products are comparatively high priced than inorganic food products. For instance, as per the latest Weekly Retail Organic Price Comparison from the United States Department of Agriculture (USDA), organic bananas cost USD 0.69 per pound while inorganic bananas cost USD 0.48. Similarly, a 3-pound bag of organic oranges cost around USD 6.03 and the price of same bag is USD 3.42 for inorganic oranges. Likewise, customers pay USD 5.0 for a 5-pound bag of organic potatoes, while same bag of inorganic potatoes cost USD 3.11.
In recent years, inflation has driven up the pricing of organic products in the United States, and the rising price of fertilizers will likely push up organic food prices further in the future. Furthermore, the shortage of shipping containers and labor forces affects the price of organic foods, which limits the growth of the organic food market in the United States.
U.S. Organic Food Market – By Distribution Channel
Based on distribution channels, the U.S. organic food market is segmented into online channels and offline channels. The offline channel is further classified into supermarkets/hypermarkets, convenience stores, retail stores, and others. On the other hand, the online segment accounts for the largest market share because of the inclination of the younger demographic towards the convenience of door-step delivery. Moreover, organic food brands in the United States also resort to popular grocery sites, such as Amazon.com as well as launch their own websites to boost their market sales. They also offer great deals and discounts through online platforms, along with subscription services to attract consumers, which favors the segment’s growth.
For more info please visit press release of United State organic food market: https://www.blueweaveconsulting.com/press-release/us-organic-food-market-witnessing-a-healthy-growth-track-forecast-to-grow-at-a-cagr-of-8-7-by-2027
Impact of COVID-19 on U.S. Organic Food Market
The growth of the organic food market was hindered after the unprecedented outbreak of the COVID-19 pandemic. The sudden imposition of nationwide lockdown resulted in panic buying of products by the consumers, which resulted in a shortage of stocks from convenience stores and supermarkets. According to the Organic Trade Association (OTA), the sales of organic products exceeded USD 60 billion in 2020, more than doubling the previous year’s growth. OTA further states that organic food sales increased by 12.8% in 2019 to USD 56.5 billion, a considerable increase over the 4.6% growth in 2019 to USD 50.1 billion.
The restrictions on distribution channels also led to severe losses to the organic food companies. However, the organic food brands resorted to online sales channels to boost their sales and meet the growing demand of consumers amid the global health crisis. The demand for organic food is anticipated to proliferate in the post-COVID-19 period with increasing health consciousness among consumers.
U.S. Organic Food Market – Competitive Landscape
The leading players in the U.S. organic food market are WhiteWave Foods Company, Hain Celestial Group, General Mills, Nature’s Path Foods, Amy’s Kitchen, Newman’s Own, Impossible Foods, Shenandoah Growers, Good PLANeT Foods, Rowdy Mermaid Kombucha, and other prominent players.
The market is highly concentrated among leading players, such as WhiteWave Foods, General Mills, Hain Celestial Group, which hold a major share in the market. However, several organic food startups and small companies are emerging and are expected to give tough competition to big players in the coming years with their wide range of products. Additionally, the market players constantly launch new products that meet the changing consumer needs and tastes. Furthermore, the adoption of competitive strategies such as partnerships, mergers, acquisitions, collaborations, etc., is also prominent in this market.
In January 2022, Eat Well Investment Group Inc. announced that its majority-owned portfolio company, Amara Organic Foods is now available nationwide across Walmart Canada and on Walmart’s expansive eCommerce platform, Walmart.com. Amara Organic Foods is one of the fastest-growing baby food brands in America. Having recently added Walmart to its distribution networks, Amara Organic Foods has access to many of North America’s leading big-box retailers, including Whole Foods, Sprouts Farmer’s Market, Loblaws and more.
In January 2022, Daily Harvest announced a multi-year partnership with American Farmland Trust (AFT) and California Certified Organic Farmers (CCOF) to support historically underserved farming communities in California. The partnership will work towards advancing organic agriculture, promoting environmentally sound farming practices, and increasing access to organically grown fruits and vegetables, while also focusing on equity in the farming community.
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The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the United States organic food market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the United States organic food market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.
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