Mintel: Organic Growth to Slow

Market growth rates for organic food and drink will decline as the economy struggles, according to research firm Mintel, which said the market for organic foods and beverages should reach $7.2 billion in 2008, an increase of over 140% from the $3 billion recorded during 2003.

CHICAGO — Market growth rates for organic food and drink will decline as the economy struggles, according to research firm Mintel, which said the market for organic foods and beverages should reach $7.2 billion in 2008, an increase of over 140% from the $3 billion recorded during 2003. But with many Americans now struggling financially, Mintel predicts sales of organic foods will be affected. "Rising food and gas prices, the credit crunch and economic uncertainty have deeply affected people's shopping habits," said Mintel senior analyst Marcia Mogelonsky. "Across the board, Americans are spending less and 'organic vs. traditional' is a decision many people are thinking about carefully." According to Mintel, the price of all food at home increased more than 7% in the past year. "To cope with higher prices, many shoppers are simply opting not to buy pricey organic or premium brands," said Mogelonsky. Mintel also says private label posts an increasingly large threat to branded organic lines. When Mintel asked survey respondents about the difference between name-brand and private-label organics, three in five (60%) said it didn't matter, that they reached for "whatever is available" when shopping.

Read More of Today's Headlines [2]