The COVID-19 pandemic has had dramatic consequences for the organic sector in 2020. After jumping by more than 50% during the early days of the pandemic, U.S. organic produce sales were up more than 20% in the spring of 2020. Other categories experiencing softer growth have been seeing big boosts in demand: The run on groceries meant organic milk was in high demand, for example, and sales of organic eggs skyrocketed. Packaged and frozen organic foods saw double-digit growth as consumers increased their at-home meal preparation.
According to the 2020 Organic Industry Survey released by the Organic Trade Association, U.S. organic food sales hit $50.1 billion, up 4.6% from the previous year. It outpaced the general market growth rate of around 2% for total food sales.
“Our 2020 survey looks at organic sales in 2019 before the coronavirus outbreak, and it shows that consumers were increasingly seeking out the organic label to feed their families the healthiest food possible. The pandemic has only increased our desire for clean, healthy food,” said Laura Batcha, CEO and executive director of the Organic Trade Association, in a press release.
The survey results revealed that organic produce maintains top position among organic foods. Organic fruit and vegetable sales in 2019 were up nearly 5%, hitting $18 billion. Millennials and younger generations have grown up with organic and remain the growth drivers for this category. Organic produce makes up almost a third of all organic food sales, and organic fruits and vegetables, including fresh, frozen, canned, and dried, have now captured 15% of the fruits and vegetables market in the United States.
In 2019, growth remained low for organic dairy, but late in the year, the category slowly started to move away from the period of oversupply of skim milk and not enough butterfat that hampered growth in 2017 and 2018. Overall, the $6.6 billion category grew at a rate of almost 2%. Organic dairy is growing faster than the conventional market, with the overall dairy category growing only 0.2%. Organic dairy and eggs accounted for just over 8% of the total dairy and egg market.
Organic meat, poultry, and fish remained the smallest organic food category in 2019, with $1.4 billion in sales. Still, the segment also saw almost 10% growth, the highest growth of any organic food category. Organic poultry remained the organic protein of choice, and the $865 million poultry market made up more than half of the sales for the organic meat, poultry, and seafood category.
While there were certain growth trajectories taking shape going into 2020, the onset of COVID-19 turned the organic food marketplace upside down early in the year. Before 2020, the organic market had been growing steadily year over year. The U.S. economy has been battered by the pandemic, and experts say there are a few outcomes that could play out for organic. Because people are price sensitive, there could be a slowdown in the growth of organic sales. Or, because people are increasingly aware of their health and looking for cleaner products, they may be willing to invest in premium products.