Organic Demand Exceeds Supply
It’s probably safe to say that those who have maintained that “organics” were just another food fad were mistaken.
According to The Natural Marketing Institute’s 2005 Organic Consumer Trends Report, 30 percent of U.S. consumers use organic products.
The consumer demand for organic foods continues to increase exponentially (sales were up 18 percent for 2004 vs. 2003 according to NMI) and the biggest obstacle to achieving even greater growth in key categories has been a lack of supply.
Dairies supplying organic milk, for example, have had a difficult time keeping up with demand.
According to a report by Stacy Delo on MarketWatch TV this weekend, the dairy cooperative Organic Valley has seen demand for its products outpace growth by 11 percent. The co-op says it had to pull out of a deal with Wal-Mart last year because it could not keep up with the demand for organic milk.
Milk is not the only product category where supply is a concern for organics. According to Ms. Delo’s report, sales growth for organic meats is expected to grow 31 percent a
year until 2008. Consumer concerns about mad cow disease, antibiotics given to livestock, and a number of other factors has led a growing number of consumers to choose organics
over conventional fresh cut and processed meats.
Moderator’s Comment: How do you see the organic food industry changing as demand for these products continues to
grow? How can retailers use organics to differentiate when many of their competitors are also selling similar products?
– George Anderson – Moderator
- Got organic? – MarketWatch TV
- Organic Food & Beverage Sales Increase 18%; Household Penetration Decreases – The Natural
- Industry Statistics and Projected Growth – Organic Trade Association