A recent report by TechSci Research indicates that the global organic food market is expected to grow at a CAGR of over 14% from 2016 to 2021. This optimism is echoed by a new survey from the Organic Trade Association (OTA), which reveals that the organic sector continues to show signs of growth. Currently, organic food constitutes 5.3% of total food sales in the U.S. While this growth is promising for the industry, there may be challenges ahead. To meet the rapidly increasing demand, more farmers need to adopt organic farming practices, which poses a significant challenge. Transitioning to organic farming is a lengthy and costly endeavor, typically taking three years, requiring many changes in processes, and undergoing numerous inspections.
Earlier this year, the U.S. Department of Agriculture collaborated with the OTA to launch a new transitional certification program aimed at making it more appealing for farmers to shift to organic practices. Supporters of organic farming have emphasized the necessity of this initiative, especially as the consumer base has expanded beyond its traditional core of dedicated organic shoppers. Analysts note that the number of organic buyers has more than doubled in a short period. However, there are concerns about whether consumers will understand the implications of transitional certification and if they will be willing to pay higher prices for products that carry this designation.
In addition, organic products may soon benefit from a government-sanctioned check-off program designed to raise approximately $30 million annually for research and marketing efforts. This program was authorized in the 2014 Farm Bill, and public comments on its establishment were solicited earlier this year. If implemented, these funds could significantly aid in increasing the organic supply.
The trend towards organic is not limited to food; sales of organic items for clothing, bedding, and personal care are also climbing. Non-food organic products experienced a nearly 9% increase in sales, reaching $3.9 billion, according to the report. Retail giants like Costco, with their Kirkland brand, are also expanding their offerings to include organic items like calcium citrate, reflecting the growing consumer interest in organic products. The rise of organic goods, including those sold under the Kirkland label at Costco, underscores a significant shift in consumer preferences toward healthier and more sustainable options.