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Fresh organic produce sales climb in 2018

Organic fare remains key sales driver for produce

Sales of organic fresh produce advanced 8.6% to $5.6 billion last year, according to data from the Organic Produce Network (OPN) and Nielsen.

OPN said yesterday that the robust growth in organic fresh produce dollar volume came in a year when overall grocery store dollar sales rose just 2%.

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In 2018, fresh produce accounted for 26% total store organic sales and had a growth rate “on par” with overall store organic sales, indicating a shift toward more mainstream demand across products, OPN and Nielsen reported. Organic fresh produce closed out the year on a strong note with a 13% sales gain in the final week.

“Although organic accounted for 10.1% of total produce sales, it’s driving a disproportionate amount of growth within the produce department,” Matt Lally, associate director at Nielsen, said in a statement. “In total, 43% of total produce growth occurred from organic items, which equates to an additional $450 million sold.”

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Among fresh organic produce items, blueberries saw the highest growth, with dollar sales up 33.3% to $256 million for the 52 weeks ended Dec. 29, 2018, according to Nielsen xAOC’s Total Food View. Next in terms of sales growth were grapes (+14.9% to $169 million), bananas (+9.3% to $290 million), herbs and spices (+7.8% to $263 million) and apples (+6.4% to $393 million).

Prepackaged salads generated the highest overall sales in fresh organic produce last year, totaling $1.12 billion, a 5.3% year-over-year gain. Also among the top 10 best-selling items were carrots ($340 million, +3.5%), strawberries ($298 million, +1.9%), lettuce ($252 million, +3.5%) and tomatoes ($204 million, +0.8%).

“What’s especially interesting about the 2018 numbers is an impressive two-thirds of all produce commodity groups increased organic sales year over year, which indicates this is not an isolated incident,” explained Matt Seeley, CEO of the Monterey, Calif.-based Organic Produce Network. “Perhaps most importantly, organic growth occurred in these three categories despite a decline in conventional sales.”

Still, OPN and Nielsen noted, fresh produce offerings bearing the “organic” label doesn’t guarantee their success in produce, as conventional items in categories such as strawberries and tomatoes saw much greater sales growth.

A key factor is pricing. For example, respective prices were $1.97 and $3.38 per pound for conventional and organic tomatoes and $2.26 and $4.26 per pound for conventional and organic strawberries.  

“When you compare this difference with commodities that experience a high organic growth rate such as grapes, the difference is striking,” according to Tally. “Grapes rang in at $2.18 per conventional pound compared to $2.94 per organic pound. Clearly, here’s a strong connection between the growth of organic and the price premium with its conventional counterpart.”

Besides strawberries and tomatoes, other fresh organic produce categories with growth potential include onions, bell peppers, watermelon and mandarins, which remain “disproportionately underrepresented” in organic sales versus the total produce average, OPN and Nielsen said. One way to reach more organic shoppers with these items, they added, is to ensure that product is readily available, especially during key sales periods like summer holidays, Thanksgiving and Christmas.

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