New England Organic Produce Conference highlights bright future of organic sales

FOXBOROUGH, MA — The inaugural New England Organic Produce Conference, presented by the New England Produce Council and the Organic Produce Network, was a resounding success, with more than 200 industry members, including buyers from more than a dozen retail chains, gathering May 1 at Gillette Stadium, here.

The day kicked off with an overview of Nielsen data presented by Matt Lally, associate director of Nielsen. Attendees then heard from OPN’s Tonya Antle and the Organic Trade Association’s Johanna Mirenda, who presented an Organics 101 session. A retailer roundtable followed, co-moderated by OPN’s Matt Seeley and Mark DeMichaelis of Olivia’s Organics/State Garden, and featuring Brian Fleming of Stop & Shop, Kevin Barry of Big Y Foods and Mark Jewell of Hannaford Bros. Shannon Allen, founder of Grown, a 100 percent USDA-certified organic fast-food restaurant, wrapped up the event as the keynote speaker. Afterward attendees were invited to take a tour of Gillette Stadium’s hall of fame.

Nielsen’s Lally projects a bright future for organic produce sales. “We are in a tremendous spot with continued growth, and [organic produce sales] have shown no signs of slowing down — and yet there’s a lot of room for improvement,“ he said.  

Lally said if growth continues on its current trajectory, the industry will have approximately $6.2 billion in annual sales five years from now. However, he noted that while organics on average hold 10 percent of the market share, some categories lag behind. If those categories catch up to the average, it would mean the organic produce industry would be doing $7.5 billion of business in five years. He also noted that taking a 15 percent market share, something he sees as very possible, would result in a more than $10 billion organic produce industry five years from now.

Lally discussed some key opportunities for growth in organic sales, both in New England and throughout the country.

While the organic share of sales in New England is near or above the national average in many categories, the region has the opportunity to improve if it can catch up in the following organic categories: kiwifruit (8.1 percent of the market share in New England compared to 20 percent nationally); herbs and spices (23 percent vs. 30.8 percent); blackberries (15.7 percent vs. 19.4 percent); and blueberries (14.2 percent vs. 16.2 percent).

During the Organics 101 session, Mirenda said organic produce is growing at five to seven times the rate of conventional produce — with a lot of opportunity. Millennials, she said, are heavy buyers of organic produce. “Within the next 10 to 15 years, 80 percent [of millennials] are expected to become parents, equating to about 60 million potential organic shoppers.”

“Organics are truly unique,” said Antle. “It is critical that we maintain and protect the organic brand because is the brand that will drive sales in this category.”

The retailer roundtable gave attendees insights from more than 100 cumulative years of produce experience by way of Fleming, Barry and Jewell.

“The organic customer is so important to us because they have a larger basket size,” said Fleming. “We see about a 30 percent bigger basket” from organic buyers.

As far as merchandising organic produce, there was discussion about the benefits of integrating and segregating organic and conventional.

“Organic customers are happy when you segregate the organic produce because they know exactly where to go,” said Barry. “When you integrate they’re not as happy because they need to search around. But when you segregate, you’re not going to grow the category at all because other customers aren’t going to see it.”

“The organic category has evolved,” said Jewell. “In produce alone over the last 10 years we’ve seen double-digit growth. As it became more popular it went from consumers shopping organics for sustainability reasons to it being a health benefit. We decided to integrate and that’s when we saw our biggest uplift in sales over the past 10 years because we grabbed those occasional and non-organic shoppers.” He said Hannaford now takes more of a hybrid approach.

In closing the Retailer Roundtable, Seeley said, “Nobody has it better than us. We grow, we sell, we market the greatest products in the world — they are great for people, they provide people with healthier, longer lives. It is truly a remarkable industry that we are in.”

Allen spoke about food as the focus for managing her family’s health, from fueling her husband and now-retired NBA star Ray Allen, to helping their son with type 1 diabetes.

Allen sees her restaurants as an outlet for delivering convenient, quality food without compromise. “Busy people are frustrated,” she said. “People want better food, and they’re asking for it, but they’re not getting any less busy. We need to raise the level of what we’re offering to accommodate their needs, wishes and desires.”