KANSAS CITY — The US organic food and beverage industry faces a number of challenges going into 2025, including an excessive supply of commodity crops, a shifting political landscape, tariffs on imports, and fraud. Retail dollar sales, however, are expected to continue to be strong, but likely not enough to move organic from niche to mainstream.

“The American organic sector is bigger than ever,” said Tracy Favre, board of directors president, Organic Trade Association (OTA), Washington. “Sales of certified organic products are at record levels, even as inflation has pressured consumers. Our 2024 Organic Industry Survey reported that organic sales closed in on the $70 billion mark in 2023, a new high for organic.”

Prioritizing organic

The OTA conducted a survey of about 1,200 US adults this past year. The findings showed that 70% of consumers trust the organic seal.

“Consumers were clear-eyed about their priorities in the products they chose for themselves and their families, valuing health and sustainability, and seeking out the USDA organic label,” said Favre. “It is the most trusted of any agricultural label, and the second-most trusted food label existing, second only to the American Heart Association’s iconic checkmark.”

Record-high dollar sales and trust in the seal are not enough for organics, albeit, it is quite the accomplishment for OTA, which turns 40 this year. Organic still remains a niche in many food and beverage categories. The leading sectors are dairy, meat and produce, according to OTA data. There’s a lot of room for growth in prepared and packaged foods, as well as beverages.

“When you look back 20 years, we were at $10 billion,” said Matt Dillon, co-chief executive officer of OTA. “This incredible growth is a testament to the collective power of our members who have expanded access to organic and ignited the passion of organic consumers.” 

Kellee James, vice president of business development, Argus Media Inc., Houston, countered that with, “But for organic to truly have the impact that it can, it needs to get bigger.”

To get bigger, volume sales of need to grow. This will help organic crop prices recover.

“The organic market came down much faster than we expected in 2024,” said Ryan Koory, vice president economist at Argus Media. “Ample supplies and weak demand growth are expected to keep downward price pressure on U.S. organic commodities as the industry enters the 2025 marketing year.”

Large domestic production of commodity crops (corn, soy and wheat) combined with an increase in imports is expected to keep downward pressure on prices, according to Argus analysis. And, Argus expects there to be an increase in organic feed demand. Ample organic supplies are expected to limit price gains throughout 2025. This, in turn, will likely impact planting decisions in 2025. Organics needs some shaking up to make it more attractive to the entire supply chain.

Where to go from here?

As OTA commences on its fifth decade, the association — along with its members — is exploring new opportunities and actions, such as growth in foodservice. There’s a push to get more fast-casual restaurants and university dining to offer organics, as this is where a younger demographic concerned with the health of the planet has strong purchasing power.

“(Another challenge is that) organic has lost some important champions on Capitol Hill and in the administration,” Favre said. “Incoming members of Congress and policy makers will need to be educated about the many benefits of organic, and of the need to provide the support necessary for organic to expand.”

Dillon added, “We will continue to advocate for organic in a shifting political landscape. We will continue to be the leader in advocating for Farm Bill priorities that serve our members and mission and ensure continued growth across the wide diversity of sectors we represent.”   

The OTA plans to reenergize its conversation around the organic sector with an eye on the next generation. Future farmers, businesses leaders, advocates and consumers are critical for continued success.

“This conversation must include a discussion of the impact of our agricultural system on outcomes, specifically, how our decisions to choose organic affect the planet and people,” said Dillon. “We’ve already initiated conversations, partnerships and the development of principles to advance organic farming by better accounting for our positive outcomes and competing with other impact claims.” 

This is where regenerative organic comes into the picture. It is a sector that Nature’s Path Foods Inc., Vancouver, British Columbia, Canada, has long been a player.

Founded in 1985, the family-owned company distributes its products in more than 50 countries. It was not an easy start, but the family was committed to organics, according to Arjan Stephens, president and founder.

“Organic is non-negotiable. It’s our foundational value,” said Stephens. “Regenerative organic is the gold standard. We have worked tirelessly to keep organic advocacy at the forefront of our mission. We continually invest in farmland, converting it to organic, and we always challenge organic standards for the better.

“We get asked every month or so if we want to sell. The answer is no. We love our independence,” said Stephens. “Keeping the business in the family enables the company to stay committed to a triple bottom line: socially responsible, environmentally sustainable and financially viable.”

He shared advice for anyone going into organics. “Ask yourself ‘why?’ Have a purpose. Ours is the soil. Our purpose is to always leave the soil better than you found it.”

Including soil into the organic equation is something most consumers have not grasped. While nearly three-fourths of Americans trust the organic seal, most are unfamiliar with what the Regenerative Organic Certified (ROC) label represents. Today there are more than 2,040 ROC products on the market licensed by nearly 240 brands.

The Regenerative Organic Alliance, Sebastopol, Calif., which oversees the ROC label, recently released the certification’s first national branding campaign called “Heal the Earth, Nourish your Life” to educate all Americans on the healing power of regenerative organic agriculture.

The campaign explains ROC’s three pillars, which is that it’s more than organic. “It goes beyond no synthetic pesticides, no toxic additives and non-GMO ingredients by championing biodiversity and healthier soils, protecting animal welfare and ensuring worker well-being.”

Incorporating fraud prevention

Seals, labels and certifications are all very appealing, but what happens when cheaters are allowed to cheat? Up until March 23, 2024, neither the USDA Organic seal nor the ROC label prevented the chance of fraud in the ingredient supply chain. That’s the date that the rules published in USDA’s National Organic Program’s Strengthening Organic Enforcement (SOE) act had to be implemented. The regulation includes steps to help deter and detect organic fraud and protect organic integrity throughout the supply chain. But the system is not perfect, especially with imports.

“It’s hard to quantify fraud, because you do not know when it is happening,” said Gwendolyn Wyard, founding partner of Strengthening Organic Systems (SOS), Corvallis, Ore. The SOS was founded in 2024 with the purpose of improving the resilience and overall integrity of global organic supply chains. The company is focused on supporting the implementation of the SOE.

In efforts to comply with the SOE rule, organic businesses and certification agencies are focused on verifying organic suppliers and the external factors to the certified organic business that may lead to fraud. Wyard explained that fraud can also take place within a company.

“A strong ethical business culture is the first step toward preventing ethical lapses and organic fraud. Not only does it foster a sense of shared responsibility and ownership within an organization, but it also fosters transparency, accountability and integrity,” said Wyard. “This makes it difficult for fraudulent activities to go unnoticed or unchallenged. When employees understand and embrace the importance of honesty in their work, they are less likely to engage in dishonest practices. Employees are also more likely to report suspicious behavior if they know it is taken seriously by management. When individuals feel invested in the company’s values and reputation, they are less likely to engage in activities that could harm the business or its customers.”

Increased testing of organic raw materials, improved training for inspectors and increased reporting will be necessary to ensure the integrity of U.S. organics. With most fraud coming into the country from imports, mandatory testing of genetically modified organisms or pesticide residues would help. But as of now, it’s not required.

That may change as a growing number of younger shoppers prioritize food being free from pesticides and chemicals, free from GMO’s, and produced without synthetic hormones and the heavy use of antibiotics. They will demand transparency and proof of integrity. The regenerative claim will also likely become a bigger part of the food industry lexicon.

“This latest (OTA) survey shows a great opportunity for organic,” concluded Dillon. “Today’s younger consumers, who are driving organic’s growth, pay close attention to claims and want to know more about the products they’re buying.”