Posted on June 18, 2020 by Sustainable Food News

Conventional produce sales growth beats organics for ‘first time in recent memory’

Monthly organic banana volume bigger than next two categories combined, says Organic Produce Network report

While U.S. retail sales of organic fresh produce rose last month by double digits, it was the “first time in recent memory dollar increases in conventional out-paced organic growth.”

That’s according to a new report on organic fresh produce sold at retail nationwide in May prepared by Category Partners LLC for the Organic Produce Network, LLC (OPN), an online and live content programming group for the organic fresh produce industry.

According to the report, which was based on retail sales scan data from Nielsen, organic produce sales increased 16.3 percent to $662.2 million, while conventional produce sales rose in May by 18 percent to $6.7 billion.

However, in terms of volume, organic produce sales, which jumped 16.2 percent to 221 million pounds, beat conventional produce sales, which increased 15.5 percent to 4.5 billion pounds.

In April, retail sales of organic fresh produce grew 18.4 percent to $542.4 million, and jumped 20.5 percent by volume to 182.5 million pounds.

Those totals were down slightly from March, when stay-at-home orders were first being issued around the country spurring pantry stocking purchases by consumers. In March, just as the pandemic’s impact was taking hold, organic produce sales jumped 22 percent to $547 million, and 26 percent by volume.

Overall, the dollar increase in organic fruit and vegetable sales for the first quarter of 2020 was up 8 percent to $1.6 billion, as January and February sales came in at 1.8 percent, OPN said.

Bananas continue to be the dominant category in organic produce. In fact, organic banana volume is not only the largest in the produce department but is bigger than the next two categories – carrots and apples – combined.

Interestingly, retail prices for the top three organic categories – bananas, carrots, apples – are priced relatively close to their conventional counterparts, said OPN.

Top 15 organic produce categories

Celery, herbs and avocados generated the strongest percentage gains in May among the top 15 organic categories, according to the report. Overall, percentage gains in organics exceeded conventional in 11of the top 15 volume categories.

“Of the top 15 organic volume growth categories, nine were vegetables. Large volume increases in products like organic cauliflower, celery, herbs, mushrooms and broccoli continue to reflect a shift in consumer home-food preparation habits seen since the beginning of the pandemic in March,” said the report.

Meanwhile, the average price per pound for the entire organic produce category in May was $2.99 per pound compared to $1.48 per pound for conventional produce.

“Pricing practices have a significant impact on retail dollar performance. For example, when looking at dollar generation, packaged salad is the [number one] category in produce,” the report said. “However, on an equivalized volume basis organic packaged salad carries a price premium of 85 percent over the conventional alternative. As such, organic packaged salad drives a disproportionate share of organic dollars relative to the actual volume.

“Compare the price premium on packaged salads with bananas (29 percent), carrots (35 percent) and apples (30 percent) and we see much different price premiums for the categories which lead in volume. Production costs and the balance between organic supply and demand largely determine shelf prices paid by consumers,” the report said.

Check out OPN’s May 2020 Organic Produce Performance Report.

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