This is clearly an inflection moment in the organic-food industry. The rise to where we're at today, with more than half of all households reporting the purchase of at least one organic item on supermarket day, certainly took a while. But the gravitas is now evident.
In our January 4 post on the emerging organic escalator, we shared some of the data. It took decades for global organic-food sales to reach $116 billion in 2015. Four years from now, 2022, they're expected to total $327 billion. The U.S. represents 40% of sales and is growing 8% per year vs. 1% for total food sales in the country.
The demographics are compelling. Millennials are purchasing more organics per average than their elders, and the rapid expansion of middle and upper classes in developing economies is opening a vast new consumer frontier.
Two weeks after our story, Organic Authority reported in a great rundown of trends to watch this year that Amazon's acquisition of organic retail giant Whole Foods and its subsequent inclusion of Whole Foods products in Amazon Prime will be one of the drivers, given Amazon's retail dominance, and we add not just of direct sales, but more importantly for the industry as whole, of even faster mainstreaming of organics in the daily lives of consumers.
Mainstreaming, of course, will mean greater affordability, a trend highlighted in the latest organic-industry survey conducted by influential firm RoboResearch, also published in January.
The growing integration of price-competitive organic products in store merchandising and shelf placement next to conventional brands, the survey indicates, as opposed to segmenting organics in a separate premium section, is a strong sign of greater consumer embrace.
The survey found a number of other drivers, including the frantic rush by governments and health insurers to slash healthcare costs, a movement that is now the new normal and is leading doctors and patients to focus far more on food-based prevention and the reduction of chemicals in what we eat.
Greater convenience is yet another — as RoboResearch describes it, "portable healthy offerings for consumers on the go," in a combination of "freshness, clean ingredients and convenience." The survey points to significant innovations in the pipeline.
Speaking of innovations, there are so many sales-boosters in the works that it is tough to keep up. Here's a brief sampling from these and other sources:
- Plant-based foods of all kinds. Organic vegan is catching on beyond the traditional consumer niche, in great measure because the options are widening.
- Clean meat. This is generally associated with plant-based substitutes, but the new thing is happening in the lab, away from farms altogether. It is called cellular agriculture, and perhaps the biggest market opportunity lies in creating an entirely new class of protein-rich, chemical-lean and slaughter-free meat products.
- Functional organic foods, or those to which certain ingredients are added to boost their health value. Scientists are conducting extensive research on these "functions" and creating matches with various foods, leading to a rapid commercialization pace of associated brands.
- Florals. Food labs are also experimenting with new textures and flavors available in organically grown flowers.
All in all, we are in for quite a ride. Stay tuned.