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U.S. Organic Food Industry Tops $40 Billion for the Very First Time, But Growth Slows Dramatically

After polling more than 200 organic food companies, the Organic Trade Association recently released the results from its highly anticipated 2017 Organic Industry Survey.

Here are the key highlights:

* Total U.S. organic sales for 2016 were $47 billion, up from $43.3 billion in 2015.

* Total U.S. organic food sales for 2016 were $43 billion, up from $39.7 billion in 2015, and total U.S. organic non-food sales were nearly $4 billion in 2016.

* Organic fruits and vegetables posted 2016 sales of $15.6 billion, which accounted for 40% of overall organic food sales and 15% of all produce that Americans consume.

* Organic meat and poultry grew by 17% to $991 million in 2016, the category’s biggest ever yearly gain.

* The condiment category was the brightest spot of all. Organic dips (hummus, etc.) surged by 41% to $57 million, and organic spices grew to $193 million.

* 60% of all organic businesses with more than five employees reported an increase of full-time employment during 2016.

The organic meat and produce categories were very strong, and the overall organic food sales figure hit record territory. Additionally, organic food now accounts for 5.3% of all food sales in the U.S., the highest it has ever been.

However, the one figure that did stand out to me in this sea of positivity was the overall sales growth of organic food.

We saw growth of U.S organic food sales from 2014 to 2015 of 11%. Yet, the growth from 2015 to 2016 was 8.4%. That is a slowdown of approximately 24%.

What caused this?

It could be a surge in online sales, which might not be fully captured in this survey and most certainly had a negative impact on retailers. It could be the increased competition among organic retailers or a growth in supply, such as milk or imported (fraudulent) grains, which has resulted in lower prices. Or, it could be the lack of support for organic from the federal government is finally catching up to us.

Whatever the reason, we’ll continue to investigate this situation and report back to you when we have more information.

Nevertheless, high single-digit growth could be the “new norm” for the organic food sector and is still a phenomenal number, especially considering what is happening in the conventional food sector.

Errol Schweizer, the former Vice President of Grocery at Whole Foods and an advisor to more than a dozen food companies, has his own take on the situation.

“While growth may be slowing year-over-year, the industry is extremely robust and unit volume may very well be higher. But the bigger problem I see is the overemphasis on price, which is largely driven from Wall Street and mass retailers. We cannot forget that the heart and soul of the organic industry are the small and medium-sized farmers in the U.S., who are increasingly having trouble making a living. These are the people we cannot forget about because this is what made organic successful in the first place. Let’s put the farmers first.”

If OTA’s numbers tell us anything, it should be this. Developing a long-term, comprehensive plan for supporting small and medium-sized U.S. organic farmers needs to be a priority for all of us.

Because organic is so much more than price.


Have a great day!

Max Goldberg, Founder

This Week's News Items

Weekly News Summaries

First Course

The UK Sees a 3% Drop in Organic Farmland

Interestingly, while the UK suffered a 3% decrease in overall organic farmland, the area of land converting to organic grew by 22%.

Friends of the Earth

Report: Bee Population Plunges by 33%

By Erin Jensen

The Bee Informed Partnership and the Apiary Inspectors of America said in its annual survey that beekeepers suffered a 33.2% decrease in their colonies. With drastic EPA cuts looming, this number will continue to go down, putting our food supply in real jeopardy.


The Propaganda Against Organic Cotton Has Begun

By Marc Bain

Don't be fooled by articles such as this one, which posits that organic cotton may not be a better option. Many people believe that GMO-cotton is responsible for the 250,000 farmer suicides in India.

Food Navigator

Debating the Definition of "Bioengineered"

By Elaine Watson

A very good recap from the American Conference Institute food law and regulation forum in Chicago, where things such as "bioengineered" definitions and GMO-labeling laws were debated.

Second Course
Fast Company

Why the Natural Beauty Industry is an Unstoppable Force

By Rina Raphael

The demand for natural and organic ingredients in beauty products could change the industry forever. A very positive development.

Civil Eats

Ron Finley Talks 'Gangsta Garden' Victory

By Scott Thill

An interview with Ron Finley after the huge emotional win of having his 'gangsta garden' be saved.

Food Tank

Crowdfunding Platform to Support Small Farms Pursuing Regenerative Agriculture

By Alexandra Groome

Launched by the leading fair trade advocacy organization Fair World Project, Grow Ahead is a crowdfunding site to help small farmers meet the global climate change challenges.

Third Course

Leonardo DiCaprio Invests in Hippeas

By Mark Dorman

Alongside venture capital firm Strand Equity Partners, actor Leonardo DiCaprio has made another investment in an organic food company.


Whole Foods to Open a Free-Standing Restaurant in Atlanta

By Chris Fuhrmeister

This week, the supermarket chain will open its first, free-standing restaurant in the Southeast. Called The Roast, this Brazilian churrascaria will serve diners in a fast-casual environment.

The Verge

Pinterest Rolls out a 'Shazam for Food' Feature

By Nick Statt

This new feature should be on the radar screen of social media managers at organic food brands.

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This Week's Quick Hits

Quick Hits

* Alison Burgos and Michelle Gaber, who run Miami’s uber-successful, plant-based Seed Food and Wine Festival, have announced an expansion to Los Angeles. Seed Food and Wine LA will take place February 8-11, 2018. I’ll share more details as they become available.

* On Living Maxwell, I wrote about the very serious matter of genetically-engineered eucalyptus trees, which could soon become a reality on American soil. Please read and tell the USDA to reject this horrible idea.

* I was in Boston this past weekend and had a great meal at Woods Hill Table, the all-organic, farm-to-table restaurant in Concord, MA. The owner of Woods Hill Table is Kristin Canty, who produced the documentary Farmageddon.

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