Demand for new categories of organic products is growing
During Super Bowl LIV in February, an advertisement for Anheuser-Busch’s organic light beer was seen to an estimated 102 million viewers. “In America, less than 1% of farmland is organic, and farmers who want to transition face monumental challenges,” the opening line of the television ad said. What if we could just have a beer and help them?
Then, the St. Louis-based brewer declared that it will pay farmers who switch to organic land a premium. According to the brand, “we’ll help transition six square feet of farmland to organic” for every six-pack of Michelob Ultra Pure Gold sold.
“If every football fan picks up a six-pack, we can change America’s organic farmland forever,” the advertisement said in its conclusion.
The commercial shows that customer demand for organic products is growing across a wider range of product categories. Younger consumers are driving this trend, as they are looking for sustainable solutions such as beer produced using organic rice and barley.
“Consumers frequently mention that they select organic products because they think they are ‘better for me and my family,'” according to Angela Jagiello, head of education and insights at the Washington-based Organic Trade Association. “On behalf of organic, the Organic Trade Association oversaw one of the biggest consumer research initiatives to date in 2019.” Customers expressed to us their appreciation for the USDA organic seal’s stringent regulations and enforcement, the prohibition of more than 700 chemicals in organic food, and their belief that organic farming methods can help slow down global warming.
The Organic Trade Association has been attributing the growth in the organic industry to millennials for a number of years, especially as they become parents and increase their consumption of organic products.
The organic sector is in for exciting times, according to Laura Batcha, OTA executive director and chief executive officer. “We’ll see a surge of new organic eaters and consumers over the next ten years, including tomorrow’s millennial parents and their offspring.”
Supply is still a significant obstacle, according to Ms. Jagiello.
“More than 5% of US food sales are now organic, but less than 1% is farmland,” the speaker stated. Since grains form the basis for so many items (including both animal and grain-based goods), supply is especially difficult. The conversion of land to organic requires three years. Farmers employ organic methods during that time, but they are unable to charge premium prices for their products. From a financial standpoint, that can be a challenging request for farmers. Furthermore, farmers that want to switch to organic farming require greater technical support.
The natural opening
The 2019 Organic Industry Survey by the OTA states that sales of organic products in the US reached $52.5 billion in 2018, an increase of 6.3% from the year before. Sales of organic food climbed 5.9% to $47.9 billion, above the 2.3% gain in sales of all food.
“Although organic is becoming more and more popular, attitudes about it are anything but status quo,” Ms. Batcha stated. “Those in the organic industry saw a significant shift in 2018 toward activism and teamwork to advance the cause of organic farming’s potential for sustainability and environmental action.”
The organic market is seeing a surge in product development driven by broader industry trends. Ms. Jagiello mentioned goods made with useful components, healthy fats, and substitute carbohydrates.
“Beverages are a fascinating category to watch and somewhat of a trend incubator for organic,” the speaker stated. In comparison to other categories, organic shoppers in this one are a little less price sensitive and have a strong taste for novelty.
In 2018, the market for organic beverages increased by 13.5% to reach $6.4 billion. A lot of organic trends start in the beverage section of the supermarket and spread to other departments.
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Trends by category
According to the OTA, produce continues to be the most popular organic category, accounting for almost 36% of all sales of organic food. Sales of all fruits and vegetables, including conventional and organic products, gained 1.7% in 2018, whereas sales of organic fruits and vegetables increased 5.6% to $17.4 billion. Roughly fifteen percent of produce sold in the US is organic. This includes fruits and vegetables. In the organic sector, carrots, greens, apples, and bananas are still preferred, but organic berries, mangos, papayas, avocados, Brussels sprouts, and cauliflower are becoming more and more popular.
Dairy and eggs are the second-largest organic sector, with sales of $6.5 billion in 2018, an increase of 0.8%. Organic egg sales increased 9.3% to $858 million, although they have since dropped from the high double-digit increases seen in prior years.
According to the group, dairy has suffered as millennials choose more plant-based options and skim milk and low-fat products become less popular. The organic dairy sector has responded to these changes by launching milk beverages that are higher in protein, offer more full-fat options, come in novel flavors, and are made from grass.
“Organic dairy is seeing tremendous innovation,” Ms. Jagiello stated. The last few years have been difficult for dairy as consumers have adopted plant-based substitutes. But in the end, we are mammals, and I wouldn’t be hasty to write off one of the primary groups that contributed to the mainstreaming of organic.
The organic sector has a growing possibility in chocolate. Consumers are reading labels more carefully for decadent goods, such as baked goods and confections, according to Gretchen Hadden, marketing communications manager for Cargill Cocoa & Chocolate, a branch of the Wayzata, Minn.-based Cargill company.
According to Ms. Hadden, “organic chocolate gives them permission to indulge.” These customers see organic products as being healthier. Chocolate’s capacity to provide a hint of indulgence for a delightful sensory experience places it at the center of many consumer-focused or label-friendly categories, including protein shakes, sports and performance bars, snacks, and more.
Made from Belgian chocolate liquor, Cargill Cocoa & Chocolate has added USDA organic certified bittersweet and semisweet chips to its lineup of organic products. A variety of organic cocoa powders are also available from the company, ranging from light brown and non-alkalized to brown/medium reddish and somewhat alkalized.
“We recently introduced a new product, organic red cocoa powder,” Ms. Hadden stated. “This new addition completes our range of organic cocoa powders.” Its reddish-brown color gives it a deep, dark color, and its flavor profile is rich and flavored with overtones of dark chocolate.
In the distance
New rules might encourage the creation of organic flavor products. A definitive rule mandating the use of certified organic tastes in certified organic products when commercially accessible was released at the end of the previous year by the US Department of Agriculture’s National Organic Program. In the past, natural flavors that weren’t organic may be used in goods that were certified organic. The new regulation only applies to goods that are certified organic; goods containing organic ingredients are exempt.
The OTA, which filed a petition to support the expansion of organic flavor availability and use, claims that at least 50 vendors provide more than 4,500 certified organic tastes.
Vice president of regulatory and technical affairs Gwendolyn Wyard stated, “When we filed the petition, we realized the number of available certified organic flavors was not adequate to meet the current total needs of the organic marketplace.” “But, considering the exponential rise in popularity of organic flavors, we decided to take the initiative and mandate their use when they are available in the necessary quality, quantity, and form in order to move the needle toward continuous improvement.”
Bell Flavors & Fragrances, Northbrook, Ill., has obtained an organic flavors certification at its Northbrook production site, to assist producers of organic food and beverages in meeting the new rule. The company claims that over 100 flavors from the spray dry, dry mix, and liquid compounding manufacturing areas were included in the certification.
A line of flavors targeted at millennial consumers, certified organic and Non-GMO Project confirmed, was introduced by Teterboro, New Jersey-based Symrise last year.
Emmanuel Laroche, vice president of marketing and consumer analytics at Symrise and global marketing leader, stated that millennials are the fastest-growing consumer generation and that they prioritize what’s best for their families as well as themselves. “So, organics are at the top of their grocery lists when it comes to foods and beverages.”
Next, where will the organic market go? Packaging might be the next big thing, according to Ms. Jagiello.
According to Ms. Jagiello, “there is a robust conversation about sustainable packaging in the organic industry.” Members of the industry are exerting pressure on suppliers to provide more sustainable, low-plastic options, both individually and collectively. Although buyers and retailers will need to be educated, everyone will ultimately benefit from this. The leading edge of this problem will be organic, and it will Organic food will be at the forefront of this movement and will spur constructive change across the food sector.