Organic household purchasing

Upward trajectory for organic sales should continue

The percentages keep coming up in favor of the organic food industry, which could see sales growth through 2025.

A Nielsen survey released in March showed organic food items were found in 82.3% of American households in 2016 as the national average climbed 3.4% from 2015 to 2016. Total U.S. organic food sales in 2015 were $39.7 billion, up 11% from 2014, according to the Organic Trade Association’s 2016 U.S. Organic Industry Survey.

The organic food industry in Western Europe and the United States has experienced high-single-digit to low-double-digit sales growth for a prolonged period of time, Rabobank said in October 2016. Organic food sales in Western Europe are forecast to have a compound annual growth rate of 6.7% until 2025 while the CAGR in the United States is forecast at 7.6%, said John David Roeg, senior consumer foods analyst for Rabobank.

“Food producers should increase their focus on organic, through new products and brands, or through the reformulation of existing products to help grow their top lines,” Mr. Roeg said. “This will also help them to position themselves as responsible businesses.”

Short-term growth in the United States is somewhat higher, but a prolonged, much higher growth rate is unlikely because a supply chain is not sufficiently established, Rabobank said.