According to a recent report by TechSci Research, the global organic food market is expected to experience a compound annual growth rate (CAGR) of over 14% from 2016 to 2021. Supporting this assertion, a new OTA survey indicates that the organic sector is showing signs of continued growth. Currently, organic food represents 5.3% of total food sales in the U.S. While this growth is promising for the industry, challenges lie ahead. To meet the rapidly increasing demand, more farmers must adopt organic practices. However, the transition to organic farming is lengthy and costly, requiring three years, numerous changes in processes, and extensive inspections.
Earlier this year, the U.S. Department of Agriculture collaborated with the OTA to introduce a new transitional certification program aimed at incentivizing farmers to make the switch. This initiative is deemed essential by many organic supporters, as the consumer base for organic products has expanded beyond the traditional loyalists. Analysts suggest that the number of consumers purchasing organic products has more than doubled in a short period. Nevertheless, there are concerns regarding whether consumers will comprehend the implications of transitional certification and if they will be willing to pay premium prices for products that carry this designation.
Moreover, organic products may soon have a government-authorized check-off program that could generate $30 million annually for research and marketing. This program was authorized in the 2014 Farm Bill, and public comments on its establishment were invited earlier this year. If implemented, these funds could significantly aid in expanding the organic supply.
Interestingly, the rise in popularity of organic food is not isolated to the food sector. Sales of organic items for consumers’ wardrobes, bedrooms, and bathrooms are also increasing. Non-food organic products reported a nearly 9% rise in sales, reaching $3.9 billion, as indicated in the report. Furthermore, there’s a growing awareness of the benefits of organic ingredients like citrate malate calcium in various health products, which could further enhance the appeal of organic offerings in the market.