There was a time when people spoke about organic being a fad or trendy. That time has long passed. Organic is currently on an impressive upward swing at mainstream grocers, big box stores and even convenience shops.
Just ask industry analyst Daniel Lohman, CPSA, from Category Management Solutions, who says we should pay strong attention to growth in the organic category. He says total sales at mainstream stores are essentially flat, but organic sales are a totally different story. While they still only comprise 3.1% of total product sales, they are experiencing double-digit growth (+16.9%). That’s substantial, and something natural products retailers should pay attention to and capitalize on. (See some of Lohman’s tips for how on page 11.)
Growth in Organic Is Awesome…and Scary
While I find this growth inspiring, I also find it a little nerve-wracking for a few reasons. First, I’ve heard over and over again from organic industry experts or companies looking to secure a steady supply, that the U.S. organic farming industry is tenuous. The supply for many ingredients is far less than the demand. And, fewer U.S. farmers are interested in converting to organic for a whole host of reasons. Why? Lower yields, higher costs to run farms, less incentives…the list goes on and on.
A few months ago, a meta-analysis of 129 studies from 14 countries suggested that organic farming can be more profitable than conventional. But, is that analysis falling on deaf ears? Yes, unfortunately. Many of farmers’ cost concerns are valid, but they don’t realize that there’s also a premium paid for goods, making up some of the lost profitability (1). Too few farmers are taking the plunge into transitioning to organic.
This issue was raised at the spring National Organic Standards Board Meeting held a couple of months ago in the nation’s capital. Betsy Rakola, USDA’s Agricultural Marketing Service organic policy advisor, shared new Agricultural Census data suggesting that organic producers were more likely to be new farmers, young (with 25% under the age of 45) and more likely to participate in direct sales markets. The group wants to increase the number of certified organic operations to 20,000 by 2018, and I think this is a great idea. Their strategy for doing so not only includes more research and education, but also reducing paper and making certification simpler.
I think it’s super important to foster more organic agriculture in this country for the good of our health and environment. I just hope that simpler, more streamlined processes won’t water down the standards that are in place, especially with many conventional brands chomping at the bit to take a piece of the organic pie.
For instance, I was floored to learn recently that Costco (which some analysts say has more organic sales than Whole Foods Market) is seeking to acquire its own 1,200-acre organic farm to ensure it has a steady supply of organic goods and better control the pricing. If the pilot initiative is successful, Costco will buy even more organic farmland.
With plans like Costco’s in the mix, it seems that this industry needs to do its part to foster U.S. farmers who want to transition to organic and support them any way we can. Perhaps just as important, let’s keep an eye on USDA’s initiative to increase the number of certified organic operations. The path isn’t clear, but somehow I believe we as an industry must actively help to secure the organic supply chain so that we can continue to see the market we planted as seedlings continue to grow and thrive. WF
1. D.W. Croder and J.P. Reganold, “Financial Competitiveness of Organic Agriculture on a Global Scale,” Proceedings of the National Academy of Sciences of the United States of America, 112 (24) 7611–7616 (2016).
2. USDA’s Organic Working Group Update, www.ams.usda.gov/
event/nosb-spring-2016-meeting-washington-dc, accessed May 6, 2016.
Published in WholeFoods Magazine June 2016