Fresh Organic Produce Sales Reach $5.6 Billion in 2018

Fresh Organic Produce Sales Reach $5.6 Billion in 2018

In a year when total grocery store dollar growth only reached 2%, organic fresh produce once again surpassed the status quo, according to new information released by the Organic Produce Network and Nielsen. In total, organic produce sales reached $5.6 billion in 2018, with the year ending on a particularly high note as sales increased 13% the final week of the year.

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“Although organic accounted for 10.1% of total produce sales, it’s driving a disproportionate amount of growth within the produce department,” said Matt Lally, Associate Director at Nielsen. “In total, 43% of total produce growth occurred from organic items which equates to an additional $450 million sold.”

Fresh produce represented 26% of total store organic sales and a growth rate of 8.6% was on par with total store organic sales, which suggests a continued movement toward mainstream demand across product consumption. Blueberries increased the most absolute dollars, followed by prepackaged salads. Organic bananas, apples, and grapes all exceeded $20 million in growth as well.

“What’s especially interesting about the 2018 numbers is an impressive two-thirds of all produce commodity groups increased organic sales year-over-year, which indicates this is not an isolated incident,” said Matt Seeley, CEO of the Organic Produce Network. “Perhaps most importantly, organic growth occurred in these three categories despite a decline in conventional sales.”

At the same time, organic isn’t a guaranteed success in produce. Products like strawberries and tomatoes experienced far greater growth in the conventional offering. A closer look reveals how important pricing is for these categories. Prices were much higher for organic tomatoes and strawberries compared to conventional: $3.38 compared to $1.97 to per pound for tomatoes, and $4.26 compared to $2.26 per pound for strawberries.

“When you compare this difference with commodities that experience a high organic growth rate such as grapes, the difference is striking. Conventional grapes range in at $2.18 per conventional pound compared to $2.94 per organic pound. Clearly, there’s a strong connection between the growth of organic and the price premium with its conventional counterpart,” Lally said.

However, there is good news on the strawberry front. Organic strawberry acreage in California has risen to more than 13% of total strawberry acreage, which is a notable gain in percentage over the last two years, even as the total organic acreage has remained fairly constant.

The California strawberry crop is a bit of an anomaly as the acreage continues to decline, but production is on the rise as newer varieties produce significantly more trays per acre than older varieties. And of course, weather is always a huge factor as it materially affects production numbers on a year to year basis. Nonetheless, the numbers are revealing even on a stand-alone basis.

In 2017, there were 4,166 acres of organic strawberries in California against a total acreage figure of 36,387. Organic acreage represented 11.5% of the total, while organic production at 16.7 million trays represented only 8.1% of the 206 million trays that California sold. In 2018, there were 4,276 acres of organic strawberries, which represented 12.6% of the total devoted to organic strawberries. The 21.9 million trays of organic strawberries represented 9.8% of production.

So, while total production grew by 9%, organic strawberry production jumped 31% and, in the same time frame, conventional strawberry production only increased by 7%. The yield numbers were also striking, as in 2017, the average acre yielded about 4,000 trays of organic strawberries with the yield per acre jumping to more than 5,100 trays per acre for 2018.

With that as the backdrop, the California strawberry industry enters the 2019 season with about the same organic acreage as 2017, but with the expectation that yields will continue to increase and so total organic volume will be greater than the last two years.