Industry Insights
The U.S. organic food market size was valued at USD 43.7 billion in 2017 and is expected to grow over the forecast period owing to rising demand from health-conscious consumers. Moreover, increasing cultivation of organic produce through sustainable farming practices is expected to contribute to market growth.
U.S. organic food market revenue split, by product type, 2017 (% share)
Consumers are increasingly seeking organically grown products owing to their low chemical content. This, combined with rising awareness regarding health benefits of protein-rich organic food, is slated to propel the market.
Growing consumer preference for products free of pesticides, synthetic fertilizers, and other chemicals is expected to result in the growth of the U.S. market. Increasing health concerns owing to high consumption of conventional foods is anticipated to give rise to demand for natural and non-toxic products. Consumers are making conscious decisions about the products they purchase and their effects on human health. Nutritional properties of various edible products have been attracting consumers today and their consumption for disease prevention and healing has considerably upped demand.
Rising preference for green labels and vast choice of food items have made consumers look beyond a company’s offerings. They are more aware about a company’s values and origin. Thus, social cause and ethical sourcing of products haved gained popularity among consumers. Concious consumption of green products is also related to minimizing waste. Companies are making efforts to reduce waste products. For instance, snack company Barna uses bananas that are rejected for export in many of its snacks. ReGrained, a granola bar producer, uses grains wasted in beer brewing to make its health bars. Thus, increasing consciousness among consumers is expected to result in the growth of the U.S. organic food industry over the forecast period.
High demand for healthy and nutritional products has driven the U.S. market for organic food over the past few years. Consumers have become more aware of health benefits of consuming meat and poultry free of hormone or grass feed. Thus, increasing demand for natural meat is expected to drive the market over the forecast period. moreover, rising spending power of consumers and advanced farming practices have helped farmers yeild good returns. As consumers desire for chemical free nutritional foods, they are willing to spend more.
However, high prices and short shelf life is expected to act as a restraining factor for market growth in near future.
Segmentation by type
• Fruits & Vegetables
• Dairy Products
• Prepared Food
• Beverages
• Others
The organic fruits and vegetables segment has evolved significantly over the past decade and is expected to drive market growth in future. Fruits and vegetables hold a significant share in the market owing to their rising popularity. According to the Organic Trade Association, more than 15% of fruits and vegetables consumed in U.S. are organic. Rising demand for organic beverages is anticipated to further propel the industry over the forecast period.
Manufacturers are introducing innovative juices and beverages containing organic vegetables and fruits. These juices and beverages are free of artificial colors, sweeteners, and preservatives, thus, offering required nutrients. For instance, Coca Cola has launched its organic tea product named Honest.
Moreover, the trend of clean ingredients has gained popularity in the dairy industry. This has given rise to cultured dairy products and innovation in formulation and packaging. Thus, increasing innovation is expected to drive the market over the forecast period.
Competitive Landscape
The U.S. organic food market has a mix of numerous well established and local players. Major industry players include General Mills, Inc.; Nature’s Path Foods; Amy’s Kitchen; Newman’s Own; and Organic Food Bar. Privately owned small manufacturers have gained a strong foothold in the market over the past few years. Multinational companies such as SunOpta also enjoy a significant presence in the U.S. market.
