Organic demand on the rise

Organic demand on the rise

Spurred by a trend toward healthful eating, among millennials and others, demand for organically grown fruits and vegetables seems to be spreading throughout the U.S. and Canada.

Organic produce no longer is marketed to a niche demographic, said Bil Goldfield, director of corporate communications for Dole Food Co., Westlake Village, Calif.

“Organic foods are quickly becoming the mainstream for many consumers,” he said.

While millennials are a “driving force” in organic produce consumption, he said the recent boost in demand also reflects an overall increased sense of health, wellness and convenience. 

At the same time, he said that while continued growth in new organic categories is limited, there are opportunities to provide consumers with a deeper understanding of how organic produce is grown and harvested.

“What the organic consumer is looking for the most is authenticity and transparency in their food choices,” he said.

“They care about where and how their food is produced.”

Many grower-shippers say organic sales are growing significantly. 

Since San Juan Bautista, Calif.-based Earthbound Farm certified its original 2.5 acres 35 years ago, the company has believed that as more people understand the value of organic, the category will grow, said Alan Ediger, chief commercial officer.

“And we were right,” he said, citing Nielsen data indicating that 85% of U.S. shoppers buy something organic at least occasionally.

Earthbound Farm grows and markets products ranging from value-added salads to row crops to frozen and dried produce-based items, he said.

Organic apple volume also is up industrywide compared to just a few years ago as more acreage completes the three-year transition phase to organic, said Brianna Shales, communications manager for Stemilt Growers LLC, Wenatchee, Wash.

“The industry has organic volumes to support more promotions than we have in the past,” she said, “which bodes well for selling more volume and attracting new consumers to organic.”

At Sage Fruit Co. LLC, Yakima, Wash., volume of organic apples has grown from 5% to up to 15% in just a couple of years, said Chuck Sinks, president of sales and marketing.

“We’re really growing our tonnage in organics,” he said.

Sinks expects the popularity of organics to continue to grow in big cities with a large, diverse consumer demographic, while sales may flatten out in some rural areas.

This year will be a litmus test for organic apples out of Washington, since the state’s growers will have the largest organic crop they’ve ever had and the smallest conventional crop the state has seen in a couple of decades, said Kevin Stennes, organic sales manager for Chelan-based Chelan Fresh Marketing.

“There are some strange dynamics going on,” he said.

It remains to be seen if the state can keep growing organics at the pace it has been doing and be sustainable, he said. 

Greenhouse organics also have found a niche.

“The demand for a complete line of greenhouse grown-organic vegetables has been increasing year over year,” said Matt Mastronardi, executive vice president of Pure Hothouse Foods Inc., Leamington, Ontario.

“Pure Flavor has been working with its family of growers throughout North America to develop key items to meet the retail and foodservice demand,” he said.

All of the greenhouse-grown tomatoes, cucumbers and bell peppers and field-grown squash and eggplant that Nogales, Ariz.-based Wholesum Family Farms sells are organically grown, said Ricardo Crisantes, chief commercial officer.

Last year, the organic growth rate at Wholesum Family Farms was in the range of 15% to 20%, Crisantes said.

He expects growth to continue, but it may be more in the 8% to 12% range.

“It’s harder to grow when you have a bigger piece of the pie,” he said.

Items like eggplant can saturate the market quickly if several farmers start growing them, he said.

“That’s too much for the market on a very inelastic demand item.”

On the other hand, grape tomatoes have gained market share because they are widely available, relatively low priced, and they are easy to merchandise, he said.

Price premiums on many organic items have come down in recent seasons, he said.

At a recent organic conference, he said he learned that a 20% premium over conventionally grown produce “is the sweet spot.”