The organic produce business has evolved positively over the years. This has been made possible by increased supplies, additional variety, customer knowledge, intensified marketing and expanded merchandising. However, recent annual sales have shown a slight slowdown. “Yes, we have seen a slight sales change,” said Vince Mastromauro, produce director for Sunset Foods in Highland Park, IL. “I attribute it to much economic uncertainty with the inflationary cost of goods placed on everyday basic luxuries in the case of our food industry. Customers purchased conventional produce items over organic because it costs them less than paying the premium retails for organics. On the flip side, the weather has been favorable during the transitional period from Salinas to the desert regions. Hopefully, there should be better yields that could keep organic produce costs lower. Hence, this will give us better opportunities for more promotions of organic items in the new year.”
Organic growers have done outstanding work in supplying product and innovating consistent improvement. Retailers also expanded department sections to accommodate more variety along with substantial ad marketing. Both have greatly combined a strong team effort in building the organic category up to that 12 percent, but 12 percent still lies idle.
By now inflation has farmers faced with much higher operating and production costs. When the organic fruit and vegetable producing costs necessitated higher charges to the retailers, the increased prices passed on to consumers weakens their normal shopping behaviors. This obviously slows consumer demand and cripples movement on the sales floor.
Organic farming costs more to produce than conventional items. The growing methods rely on orthodox soil treatment, planting, field maintenance, harvesting and transporting the product. The sensitivity of handling organic produce with care from the growing fields to the stores is vital to its quality and condition. Shelf life is most vital and limited due to that sensitivity in order to control shrink.
Consumers concerned about eating clean, healthy and nutritious fresh fruits and vegetables are drawn to organic produce for those benefits. Young Millennials and Generation X individuals are most likely to choose organic food items. Even though organic produce items are premium priced, those consumers are still willing to pay higher prices for the additional benefits.
The quality of organic produce has gotten much better over the years. This improved higher quality has encouraged more purchases by consumers. The new addition of plant-based products is now a growing trend among health-conscious shoppers.
The top three organic produce items are berries, packaged salads and apples. There is a consistent demand for strawberries, blueberries, raspberries and blackberries. Though berry prices are 56 percent more than conventional, customers seeking organics are willing to pay for them.
Packaged salads and apples are 68 percent and 47 percent higher than conventional, respectively, as well. The same consumers are also prepared to pay the premium prices for those items.
Another top leading sales volume driver is organic bananas. The bananas are priced 30 percent higher than their conventional counterpart and organic customers still want them. Organic bananas showed an increase of 4.3 percent in sales in 2023 over the previous year.
All this is a positive highpoint in the growth of the organic category. Yes, there are slowdowns and some setbacks now and then in any business — even for organic produce sales but let’s not only look at a stumble on the path. We’ve come a long way to reach 12 percent of the total produce sales. It may be stalled for a bit at this point, but the percentage will increase when the merchandising becomes more aggressive again.
It will take more product availability, better assortment, improved costs, lower retails and expanded displays to get the job accomplished.
When that all comes together, it will drive sales upward.
Ron Pelger is a produce industry adviser and industry writer. He can be contacted at 775-843-2394 or by e-mail at [email protected].
