The American Market for Organic Products

Update on 12/12/2024
 

In the United States, sales of organic products continue to show significant growth signals. In America, the trend towards organic and healthy eating is becoming more established.

Sales of organic products in the United States reached nearly 70 billion dollars in 2023, with an increase of 3.4% compared to 2022, setting a new sales record for the American market. Sales of organic foods totaled 63.8 billion dollars, while those of non-food organic products reached 5.9 billion dollars.

There is a constant and growing interest in purchasing organic food products among Millennials and Generation Z in America. Since it is estimated that by 2030 the majority of American consumers will be made up of Millennials, Generation Z, and younger generations, the American market for organic food products is seen as a strategic choice for Italian companies' exports.

Update on 01/04/2022
 

The USA is the largest market in the world for the sale of organic products. It is also the most promising market for selling Made in Italy organic products. Moreover, according to Italian organic exporting companies, the USA ranks third in the top 10 markets with the greatest growth prospects. The strong interest in organic from American consumers is also confirmed by the industry's numbers, all on the rise, with the consumption of natural, organic, and functional foods and beverages showing the best performances. - A significant contribution to the growth of the natural and organic industry in the USA came from the food and beverage sector, which generated over 70% of total sales in the organic sector in 2021 and remains a strong driver for 2022, - stated Kathryn Peters, Executive Vice President of SPINS – with market forecasts indicating the sector is on track to reach 200 billion dollars by the year. 

The impact of Covid has played a crucial role in the rise of the organic food market in America, - stated Carlotta Mast, Senior Vice President of New Hope Network, at the 'Natural Products Expo East' in Philadelphia. In the USA, during the initial phase of the pandemic, products labeled with claims associated with the health emergency, such as immune system boosting or the presence of healthy-considered vitamins, led to an initial double-digit surge in sales in the natural and organic sector. The positive trend continues even now, despite the Covid threat having eased with the increase in vaccination rates across the United States - The pandemic continues to have a positive impact on the organic sector. American consumers have tried new brands, which in many cases have continued to be part of their shopping cart, especially in the food and beverage category, - Mast continued. – But despite the widespread optimism for the future of the natural and organic industry, Mast 'warned' organic companies to - not take consumer interest in this sector for granted, but to continue to innovate and offer products that meet the evolving demand of American consumers. - American consumers now seek products that intersect multiple values: health, environmental, and social.

The factors that make the United States a high-potential market for organic products

In the United States, some health-conscious consumers gravitate towards organic products, as opposed to conventional ones, due to concerns about highly processed foods, artificial ingredients, as well as the effects of pesticides, hormones, and antibiotics. However, there is also growing demand for functional foods and beverages with specific health effects, such as foods that promote relaxation and sleep or help combat stress, or those that support the development and health of children, who remain a weak point in the vaccination campaign in the United States. Peters noted that the organic food and beverage industry is already innovating to meet the new needs of U.S. consumers. This is confirmed by the many new products and labels debuting in the American market.

In the beverage segment, for example, SPINS is recording a 51% increase in products that boost immune defenses, containing ingredients like elderberry, echinacea, and camu camu. CBD-based products, melatonin, theanine, and valerian to reduce anxiety and stress have seen a 36% increase; and finally, the use of adaptogens, including chaga and reishi mushrooms, ashwagandha, maca, and holy basil, has risen by 32%. Peters also noted that as the food as medicine approach grows, American consumers are increasingly turning to food products to find beneficial effects that they previously sought in supplements. According to a SPINS report in America, in 2021, sales of ashwagandha in the food sector increased by 129.5% to $8.4 million; sales of super mushrooms rose by 16.1% to $420 million; those of moringa by 14.7% to $2.5 million, and elderberry by 96.5% to $16.3 million. The same SPINS research reveals that alongside the increased demand for functional ingredients, there is a growing demand for plant-based products. Peters attributed the unstoppable growth of the plant-based trend to the belief among U.S. consumers that these products are good for the health not only of the body but also of the planet. 

Steve Lutz, Senior Vice President for Innovation at Category Partners, stated that the organic market has also been driven by the greater availability of products and the reduction of the price gap between organic and conventional products. - This price gap has gradually reduced over time, thanks to the greater availability of products, and this will continue to drive prices down in the future, - Lutz added. Among the other factors that make the United States a high-potential market for organic, we find the high number of heavy users, those who consume organic at least once a week, representing 40% of the total. In BIO purchases, moreover, the consumer pays attention to certain aspects in particular, such as the origin of the food, the brand (producer or supermarket), and the sustainability of the product, which includes, for example, eco-friendly packaging and information on low environmental impact. 

The purchase channels for the organic sector in America are predominantly large-scale distribution (online and offline) and specialty stores

A survey conducted on a representative sample of American consumers by Nonisma to understand where organic products are purchased revealed that 26% choose large-scale distribution (online and offline), 25% opt for stores specializing in organic products (online and offline), while 14% go directly to the producer. According to the analysis, overall, 41% of American consumers buy organic food online, preferring home delivery (65%) over the click&collect option (25%). 

How Italian-branded organic products fit into the American market

Not only is there growing interest among American consumers in organic-origin foods, but it increases even more if the products are of Italian origin. The survey by Nomisma also reveals that the United States ranks Italy first in the top 5 for the quality origin of food products, and the same applies to organic: 71% of Americans perceive a higher quality of Italian products compared to those from other countries, so much so that 8 out of 10 Americans are willing to pay a higher price to have the guarantee of Made in Italy in organic. The report also highlighted specific categories of organic foods where Italian origin has more value, such as wine, extra-virgin olive oil, and pasta. In the United States, the most sought-after organic products at the moment are: fruits and vegetables, eggs, meat, milk, yogurt, fruit juices, vegetable purees and preserves, cheeses, legumes, extra-virgin olive oil, and wine. 

The geography of organic product sales in America

In the United States, the queen of the organic market is California, with a business volume of 2.2 billion dollars. And this trend towards organic spending characterizes the entire West Coast, and focuses on ten federal states: California first and foremost, with a good gap followed by Washington with a business of 515 million dollars and Pennsylvania at 313 million. The geography of organic sales in other federal states sees Oregon (237 million), Wisconsin (201 million), Texas (199 million), New York (164 million), Colorado (147 million), Michigan (125 million), Iowa (103 million) 

What is USDA labeling

American consumers increasingly seek transparency, demand integrity from the food industry, and guarantee through certification with the USDA Organic seal. The organic food label is regulated by the 'United States Department of Agriculture' (USDA) and food producers undergo a certification process to use the 'USDA Organic' mark on their products.  

According to the USDA, organic is a labeling term that indicates that the food or other agricultural product has been produced through approved methods. In other words, organic itself is not necessarily a health indication. It simply means that the food has been produced using organic methods. These methods include a list of federal standards that address aspects such as soil fertility, pest and weed control, and animal husbandry practices.