Source: Organic Trade Association news release

U.S. sales of certified organic products approached $70 billion in 2023, a new record for the sector. Dollar sales for the American organic marketplace hit $69.7 billion last year, up 3.4%, according to the 2024 Organic Industry Survey released Tuesday by the Organic Trade Association (OTA).

Despite stubborn price inflation seen throughout retail aisles, consumers remained clear-eyed about their priorities in the products they chose for themselves and their families, valuing health and sustainability, and seeking out the USDA Organic label. The organic marketplace recalibrated its supply chain and reconciled the cost of doing business in part with increased retail pricing. The industry continued to grow, with organic food sales in 2023 totaling $63.8 billion and sales of organic non-food products totaling $5.9 billion.

Certified organic produce was the largest sales category in 2023

"It is encouraging to see that organic is growing at basically the same rate as the total market. In the face of inflation and considering organic is already seen as a premium category, the current growth shows that consumers continue to choose organic amidst economic challenges and price increases. Although organic is now a maturing sector in the marketplace, we still have plenty of room to grow," says Tom Chapman, co-CEO of the Organic Trade Association.

In 2023, the increase in dollar sales in the organic market was driven more by pricing than unit sales. But that said, consumers boosted their purchases of many organic products. Increases in unit sales were reported for up to 40% of the products tracked in this year's survey. The survey also showed that prices for many non-organic products climbed at a faster rate than organic products. This means the price gap between conventional and organic is closing, which should help fuel growth for organic products in 2024.

Matthew Dillon, co-CEO of OTA, adds that to achieve this growth, "It is essential to educate consumers that choosing organic is a straightforward way to tackle some of the greatest challenges we face. Whether it's accessing healthy foods, improving transparency in supply chains, mitigating climate change, supporting rural economic resilience, protecting natural resources, or realizing the multitude of other benefits, effectively communicating and delivering on these promises is the key to expanding organic's share of our dinner plate."

Produce again tops organic sales

Produce held its spot as the largest organic category in 2023, continuing to be the primary entry point for consumers into the organic market. Organic produce meets the consumer's desire for clean, healthy food, and the importance of organic's critical benefit of no toxic synthetic pesticides is easy to grasp when buying organic berries or carrots. In 2023, the category grew by 2.6% to $20.5 billion. Organic produce now accounts for more than 15% of total U.S. fruit and vegetable sales.

Top sellers in the organic produce section were avocados, berries, apples, carrots and packaged salads, Organic bananas saw stronger growth in 2023 than non-organic bananas. Unfortunately, apple crops weren't big enough to meet consumer demand, even though sales increased.

The second biggest-selling food category in the organic aisles was the grocery category with sales of $15.4 billion for 4.1% growth. This new category represents many of the products previously grouped under breads and grains, condiments, and packaged and prepared foods. With 21 different subcategories, close to 40% of the sales in the grocery category were driven by the top three performers: in-store bakery and fresh breads with sales of $3.1 billion, a gain of almost 3%; dry breakfast goods up around 8% to $1.8 billion in sales; and baby food and formula at $1.5 billion for a hefty gain of nearly 11%.

Beverages were the third largest category for organic in 2023, posting $9.4 billion in sales, up 3.9%. As always, this category was a driver of innovation with functional beverages, whether for enhanced hydration or mental focus, playing a prominent role. Last year also had a surge in new organic non-alcoholic beverages and mocktails. On the flip side, organic wine sales were up 2.5% to $377 million, and organic liquor and cocktails, while still the smallest sector of beverages at $59 million, posted growth of more than 13%.