Mintel estimates organic market sales of $6 billion

by Keith Nunes
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CHICAGO – Organic food sales have grown 132% since 2002, according to Mintel International, Inc., while organic beverage sales nearly doubled (97%) during the same period. Together, the organic food and beverage markets now make up a nearly $6 billion dollar a year industry.

"This isn't a niche market full of environmental health nuts and affluent yuppies anymore," said Marcia Mogelonsky, senior research analyst at Mintel. "Organic is now part of the picture for everyone from the Hispanic immigrant mother to the hip suburban teen next door. With health issues and food contamination cases in the news, many people have begun looking for safer, more natural food and drink."

Mintel’s data showed that over half (52%) of Americans purchased organic foods in the past year, while over a quarter (26%) went for organic beverages. It is a notable increase from the 34% of consumers who bought either organic food or beverage products in 2002. What is more, nearly a third (32%) of adults now report purchasing organic products "as often as possible."

Manufacturers have caught on and Mintel Global New Products Database showed a steady increase in new organic product development. The year 2006 saw nearly 1,600 new organic food and beverage products launched in the U.S., over twice the number released in 2002 (732). Even retail grocers have entered the segment, currently featuring over 300 private label organic products and entire departments dedicated to organic foods.

"Organics will undoubtedly continue to thrive, but there are hints that the industry may face increasing challenges," said Ms. Mogelonsky. "Private label brands offer cheaper prices than traditional brands, so while their rapid expansion into organics may encourage more people to buy more organic products, but it could actually hurt market growth."

Mintel expects strong, consistent growth for the organic food and beverage market, but the research firm predicts a decline in the rate of growth. Organic food sales are expected to rise 59% by 2012, while the organic beverage market is projected to grow by nearly two-thirds (65%) in that time.

Additionally, the prices for organic food and beverages are a barrier for many consumers. Mintel’s consumer survey revealed that two-thirds of Americans said they would buy more organics if the products cost less. This element of the data suggests potential interest in less expensive private label brands may change the face of organic products sold in supermarkets.

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