Natural and Organic Products Sales Grow 12.7% to $259 Billion in 2020
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This article originally appeared in Presence Marketing’s April 2021 Industry Newsletter
By Steven Hoffman
Natural and organic products sales grew an estimated 12.7% to $259 billion, with sales on track to surpass $300 billion by 2023, reported New Hope Network at its virtual Spark Brand Success event, held March 2-4, 2021. Sales were accelerated by the COVID-19 pandemic, as consumers cooked more meals at home and developed a greater interest in healthier food, wellness and boosting immunity. “2020 was a challenging year. But natural and organic brands face a bright future. We are positioned where a growing number of consumers are headed,” Carlotta Mast, SVP and Market Leader at New Hope Network said at the event, the Fermentation Association reported. Natural and organic food and beverages (39% of total sales) and functional food and beverages (31% of total sales) dominate the market, reported the Fermentation Association. Other key findings include: Consumers are prioritizing health and are seeking immunity-boosting and nutrient-dense foods. However, while consumers are focusing on health and wellness more than ever, they’re also struggling with junk food, lack of exercise, and anxiety and sleep issues emerged in 2020. Also, binge drinking is up a disturbing 41% among women since the start of the pandemic, Mast noted. Consumers want less sugar and fewer carbs and additives, and plant-based foods, pantry staples, frozen foods and meat/fish/poultry experienced the highest growth rates, while snack foods and packaged and prepared foods declined as fewer people opted for grab and go offerings during lockdown. Of note, Mast said the pandemic accelerated e-commerce sales, which grew 60% in 2020, generating $16.5 billion in natural and organic products sales. She noted that natural products are outpacing conventional products in e-commerce, with natural shoppers spending on average twice as much as those that buy “traditional” items online. “As you all know, organic is mainstream now,” Mast said. “During other economic downturns that we’ve experienced, the organic sector has typically taken a hit when it comes to sales growth, but not in 2020,” she said.
Organic Acreage and Sales Continue to Grow Worldwide
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Originally Appeared in Presence Marketing News, March 2020
By Steven Hoffman
Based on data collected from 186 countries, 2018 was another record year for organic agriculture. Organic farmland increased worldwide in 2018 by 2.0 million hectares (4.9 million acres), according to the 21st annual survey, The World of Organic Agriculture, conducted by the Swiss-based Research Institute of Organic Agriculture (FiBL) in partnership with IFOAM Organics International and released in February 2020.
While this represents a modest increase of 2.9%, growth in global acreage has been steady for a number of years. Globally, 1.5% of all farmland is estimated to be organic. However, according to FiBL’s 2020 report, many countries have far higher shares of organic – in 16 countries, 10% or more of all agricultural land is reported to be organic.
Globally, a total of 71.5 million hectares (177 million acres) were organically managed in 2018. Australia recorded the largest organic agricultural area (35.7 million hectares, or 88.2 acres), followed by Argentina (3.6 million hectares or 8.9 acres) and China (3.1 million hectares or 7.7 million acres). North America, including Canada, Mexico and the U.S., reported 3.3 million hectares or 8.2 million acres of organic agricultural land in 2018.
Because of Australia, FiBL reports, half of all global organic agricultural land is in Oceania. Europe has the second largest area, followed by Latin America. Also, in 2018, 2.8 million organic producers were reported worldwide, with India continuing to be the country with the highest number of producers (1.15 million).
Market research firm Ecovia Intelligence, working with FiBL, estimates that the global market for organic food was more than $100 billion US. The U.S. leads the market with sales of $44 billion US in 2018, followed by Germany ($11.8 billion US) and France ($9.9 billion US).
According to the World of Organic Agriculture study, a number of major markets continued to post double-digit growth in 2018, and the organic market in France grew by more than 15%. Danish and Swiss consumers spent the most on organic food in 2018 (312 euros or $339 US per capita). Also, Denmark reported the highest market share, with organic sales capturing 11.5% of the country’s total food market.
In related news, market research firm Mercaris reports that U.S. farmers harvested nearly 3.3 million acres of certified organic field crops in 2019, beating previous estimates for every region of the country. Helping to offset a rainy growing season, the harvest was driven by 14% more organic field crop operations, reported New Hope Network. Among the report’s highlights: the U.S. organic hay and alfalfa harvest was up 8% in 2019, with 11% more certified organic farms; 13% more certified organic operations harvested corn in 2019, offsetting a decline in the number of acres harvested per operation; the U.S. certified organic soybean harvest increased 11% in 2019; and acres of harvested organic wheat grew 16% year over year as a result of expansion in the High Plains region, New Hope Network reports.
“Despite what can be fairly described as the most difficult growing season in more than a decade, 2019 was a remarkable year for organic production,” Ryan Koory, Director of Economics at Mercaris, told New Hope Network. “The addition of new organic growers suggests that 2020 could see organic production reach new record highs,” he added.
Butter Labeling Wars: Wisconsin Dairy Industry Takes On Plant-based “Butter”
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Originally appeared in New Hope’s IdeaXchange, July 2019
By Steven Hoffman
Until recently, the U.S. dairy industry remained relatively quiet regarding the proliferation of plant-based products that use words such as “milk,” “yogurt” and “cheese. Now, lobbyists and policymakers for dairy producers in Wisconsin, the nation’s leading producer of butter made from cow’s milk and the state that calls itself “America’s Dairyland,” want to limit use of the word on plant-based products, such as the best-selling vegan “butter” sold by Miyoko’s Kitchen, reported Bloomberg News.
This past spring, Wisconsin’s Department of Agriculture, Trade and Consumer Protection (DATCP) instructed supermarkets to remove nondairy products that use the term “butter” on labels, based on complaints from dairy producers that these products don’t comply with the state’s definition of butter, which requires that butter be made from dairy-based milk or cream. After being singled out and pulled from several stores, Miyoko’s agreed to affix a sticker to the label that read “vegetable spread.”
Companies such as Miyoko’s are riding a wave of popularity for plant-based products, especially dairy alternatives, reports Fortune. Plant-based milk retail sales totaled $1.8 billion for the year ending May 25, 2019, a 6.5% increase, according to data shared from Nielsen. Cheese substitute sales totaled $117 million, showing 17.4% growth. Cashew butters were up to $12.6 million, representing an increase of 4.9%, Fortune reported.
Changing consumer preferences toward plant-based foods are often cited as a chief cause of dairy’s slow decline, however, vegan products using labels such as “milk” – or in this case, “butter” – are seen by the milk lobby as misleading consumers to unfairly steal market share.
An official at DATCP said the agency is not planning to enforce labeling laws on other dairy products, such as “milk,” however, it will follow the FDA’s lead in this regard. Regarding butter, however, “It’s been an important product.” Wisconsin products more than one third of all butter sold in the U.S., Fortune reported.
FDA, for its part, may seek to restrict use of such traditional dairy terms by plant-based food producers. As part of its Nutrition Innovation Strategy, FDA announced it is modernizing standards of identity, which “define through regulation certain characteristics, ingredients, and quality of specific foods,” said an agency statement from Scott Gottlieb, who served as FDA commissioner at the time of the strategy’s launch. However, a review commissioned by the Plant Based Foods Association (PBFA) reported that 76% of people who commented to the FDA were in favor of allowing plant-based products to continue using dairy terminology.
“The entire debate over the use of the term milk and other dairy terms on plant-based foods and beverages is a solution in search of a problem,” Good Karma Foods CEO Doug Radi told Food Navigator USA in January 2019. “Plant-based foods that can directly replace dairy-based products make use of the same terminology (e.g. milk, butter, cheese) because they serve the same purposes and are used in almost exactly the same way as their dairy counterparts (in cereal, a glass, smoothies, coffee, etc.) Consumers understand words in context,” he said. “Consumers think these words represent proper descriptors for the products and do not believe we are trying to pass off our products as a dairy product. In fact, we would not be successfully doing so, as consumers buying our products are looking for alternatives to dairy,” Radi added.