With more people opting for healthier lifestyles, sales in the U.S. organic products industry was at a record high in 2015. The industry was able to amass $43.3 billion in sales revenue which is 11% higher than the previous year according to the survey conducted by the Organic Trade Association. Much of the revenue was generated by organic food sales at $39.7 billion which is ten times higher than the income produced by organic non-food products that made $3.6 billion last year.
Organic Produce Is the Backbone of the Organic Products Industry
Organic produce is the backbone of the organic industry as it generated sales worth $14.4 billion last year. Consumers often feel a close connection with the industry via the food they eat. About 13% of the produce sold in the country is labeled organic.
The demand for organic foods is evident in the rising demand for fresh organic juices which enjoyed a 33.5% growth in the previous year. Other categories of organic produce that are in high demand include condiments and dairy which have generated $1 billion and $6 billion in sales, respectively, last year. The organic snack food category is also a major player in the industry which has seen a growth of 14% since 2014.
High Demand but Low Supply
The unprecedented development of the organic products industry was due to high demand by the consumers for organic products. However, the high demand also means supply issues as the production of organic products in the country is beyond its capacity to meet the consumption needs of the people. Nearly 5% of the foods sold in the United States are labeled organic.
The organic industry came up with different means to address this challenge as well as other issues that influenced the industry including poor infrastructure and policies. The organic industry has joined hands with other companies to fortify their supply chain so that there is a constant stream of products to support the healthier lifestyle of consumers.
Supply Chain Challenges
Organic products have now found their way to the mainstream market. Today, many supermarkets, membership warehouse clubs, and other outlet stores provide organic offerings to consumers unlike before. However, the organic industry has experienced supply chain challenges over the recent years. For instance, the grains and dairy were two areas in the industry that could have enjoyed a more robust growth if not for the supply chain challenges.
The hurdles in the sector have led stakeholders to secure more organic acreage to grow produce, encourage new farmers to adopt organic practices, and develop programs to help experienced conventional farmers transition into the organic way of life. These initiatives were met with enthusiasm as more organic companies are working with one another to address the concerns.
Despite the problems, the organic industry stakeholders are confident about the future. They are making sure that the industry is built on transparency and the engagement of interested parties to garnish the consumers’ trust.
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