Dive Brief:

• Sales of organic food rose 4.3% in 2022 to a record $61.7 billion, the first time the category crossed the $60 billion benchmark, according to the Organic Trade Association’s (OTA) annual report. This compares to $57.5 billion in organic sales in 2021.
• Produce was the best-selling category in organic food at $22 billion, accounting for about 15% of all fruit and vegetable sales, OTA said. The next best-selling organic sector was beverages — with $9 billion in sales in 2022, an increase of 4% — behind jumps in coffee, soft drinks and enhanced drinks. Dairy and eggs came in third at $7.9 billion, up more than 7% from the prior year.
• Despite food inflation reaching a four-decade high in 2022, consumers are buying more organic offerings, signaling a continued interest in the sector valued for its sustainability and health benefits. 

Dive Insight:

To organic food advocates, the sales show the category is thriving even during economic volatility. The OTA noted while organic growth has slowed from the highs of its pandemic-era boom in 2020, specific categories continue to show significant increases.

“Organic is at that right intersection of environmental and personal health,” Tom Chapman, OTA’s CEO, said in a statement. “Organic brings together the interest in human health and a healthy environment, and that offers organic a positive pathway forward and will help organic businesses withstand challenges in the future.”

With inflation showing signs of easing, consumers could have more money to spend, providing another tailwind for organic food and beverages. The cost of food at home has fallen steadily during the past several months, and four of the six major grocery store food groups saw monthly price decreases in April, according to the U.S. Bureau of Labor Statistics.

Organic food advocates tout its sustainability benefits by using 45% less energy and emitting 40% less carbon than non-organic food, according to a Columbia University report. 

Consumers are considering the environment when making food purchasing decisions. In a survey last month from consulting firm Kearney, 42% of consumers said they always or nearly always take sustainability into account. And while 46% of respondents said cost is a primary factor for why they would not buy a product with sustainability claims, that figure fell four percentage points from 2022.