2023 Organic Industry Survey Shows Resilience of Organic Sector

With the organic products sector growing 4% to $67.6 billion in sales in 2022, certified organic food products now account for 6% of total U.S. food sales

Despite ongoing industry challenges including inflation, supply chain disruptions, increased competition, and a labor shortage “felt acutely by organic producers,” the organic products market grew at a rate of 4% in 2022 to reach overall sales of $67.6 billion, according to the Organic Trade Association’s (OTA) 2023 Organic Industry Survey. Breaking $60 billion in total sales for the first time, OTA said its survey showed “another high-level mark for the resilient organic sector.”

The organic industry in 2022 grew at nearly twice the pace of 2021, when the industry posted 2.3% growth, according to the OTA report, published in May 2023. With organic produce in the lead, sales of organic food in 2022 totaled $61.7 billion, and sales of organic non-food products reached nearly $6 billion. In the last 10 years, sales of organic products have more than doubled, OTA noted.

Certified organic food products now account for 6% of total U.S. food sales, according to OTA.

“Organic has proven it can withstand short term economic storms. Despite the fluctuation of any given moment, Americans are still investing in their personal health, and, with increasing interest, in the environment, and organic is the answer,” said Tom Chapman, CEO of OTA. “Organic’s fundamental values remain strong, and consumers have demonstrated they will come back time and again because the organic system is verified, and better for people, the planet and the economy.”

In its report, OTA noted that inflation increased costs across the whole organic supply chain — “indeed, the entire food supply chain, boosting prices in the grocery aisles. As a result, the organic sector reflected the overall food sector, with the value of organic sales rising even as the growth in the volume of sales for some categories slipped,” the trade association said. Yet, growth was still notable despite supply chain disruptions, ingredient shortages, global disruptions, and the unpredictability of the impact of climate change on agriculture, the trade association noted.

Organic Produce Accounts for 15% of All U.S. Fruit and Vegetable Sales
Leading the way in 2022, as it has in years past, was organic produce, “often the entry point for new organic buyers,” said OTA, noting that produce is the top seller of all organic categories, with sales totaling $22 billion in 2022. Organic produce now accounts for 15% of all fruit and vegetable sales in the U.S., OTA reported.

Organic beverages, the second best-selling category in organic, grew 4% to report sales of $9 billion in 2022, with organic coffee maintaining its lead position with sales nearing $2.3 billion and charting 7% growth in 2022. Organic soft drinks grew an impressive 14% to total sales in 2022 of $503 million.

“Organic beverages continue to climb. They’re an area where shoppers are willing to experiment and are less price sensitive,” said Angela Jagiello, Director of Education and Insights for OTA and coordinator of the annual survey. “Soft and enhanced drinks had a great year, with the non-alcoholic trend being a big contributing factor. Many younger shoppers are reducing or eliminating alcohol, and these organic beverages are a celebratory and sophisticated alternative,” she said.

Dairy and eggs, the third highest selling category in organic, grew a strong 7% over the previous year to post $7.9 billion in sales in 2022. “Continued demand and inflationary price increases helped boost the dollar sales in that category; yogurt and eggs both saw double-digit growth, with organic yogurt sales jumping by over 12% to $1.5 billion, and organic egg sales by 11% to around $1.2 billion,” OTA reported.

Other categories that showed significant growth in 2022: organic baby food and formula sales were up almost 13% to $1.4 billion, sales of organic rice, grains and potato products increased more than 10% to $387 million, organic dip sales were up a big 18% to $194 million, and sales of organic pork grew more than 10% to $63 million, OTA reported.

The organic non-food category, with sales growth in 2022 of 1.6%, was challenged in particular by supply chain disruptions and increased costs. For the year, growth was relatively flat for organic nutritional supplements, fiber, pet food and household products. However, the organic personal care market, charting growth of 5.1% and valued at $1.2 billion, was a bright spot in 2022.

Policy Initiatives and Investment Strengthen Organic
As the organic market has grown to more than double in size in the past 10 years, so too, have the complexities of the market. And while few policy initiatives promoting organic were enacted in the past several years, OTA noted that in 2022 there was good news from policymakers to promote organic production and sales.

First, the Strengthening Organic Enforcement final rule was published in January 2023 to deal with fraud. The rule closes gaps in organic regulations and is designed to promote consistent certification practices and improved transparency and traceability across the organic supply chain — “a key step to maintaining organic integrity and consumer trust in the organic seal,” OTA said.

In addition, in 2022, the U.S. Department of Agriculture (USDA) announced it would invest $300 million to help build the next generation of organic producers and to strengthen and build resiliency in domestic organic supply chains. It’s the agriculture agency’s single largest investment in organic.

In 2022, the National Organic Program, administered by USDA, published proposed rules to bolster animal welfare standards in organic production; a final rule is expected in 2023. USDA also introduced in 2022 an Organic Dairy Marketing Assistance Program, an important step in helping organic dairy farmers affected by increased costs, drought, and other market challenges.

According to OTA’s Tom Chapman, these are important advances, but there is more work to be done in the upcoming Farm Bill to increase support for organic.

“Organic is at the right intersection of environmental and personal health,” Chapman said. “When you think about organic in the long term, it remains the best label out there to address the expectations consumers have for agriculture and their food system. Americans are still investing in their personal health, and organic is an answer for that for a lot of consumers. But there is also increasing interest in investing in the environment and sustainability, and that is where organic is unique, because it brings together both the human health interests and the environment. This makes organic highly desirable to consumers and offers it a good future pathway.”

The Organic Trade Association 2023 Organic Industry Survey report is available to OTA members here. Read the full OTA press release here.
Steven Hoffman is Managing Director of Compass Natural, providing public relations, brand marketing, social media, and strategic business development services to natural, organic, sustainable and hemp/CBD products businesses. Compass Natural serves in PR and programming for NoCo Hemp Expo and  Southern Hemp Expo, and Hoffman serves as Editor of the weekly Let’s Talk Hemp Newsletter, published by We are for Better Alternatives. Contact steve@compassnaturalmarketing.com.