Organic Packaged Food and Beverages in the United States

EXECUTIVE SUMMARY
The United States (U.S.) has the largest organic packaged food and beverage market in the world, with retail sales reaching almost US$11.9 billion in 2010. Organic packaged food is generally more popular than organic beverages in the U.S. In 2010, the organic beverages market only represented 5.8% of the total packaged organic products market.

Consumers in the U.S. tend to have a favourable opinion of organic packaged foods as they are perceived as premium products. There was a slight decline in organic packaged food and beverage sales during the economic recession in 2009. However, sales of these products are expected to grow at a compound annual growth rate (CAGR) of 6.3% from 2010 to 2014. As consumers sought cheaper products during the recession, a larger opportunity for private label organic products emerged. Private label producers now represent over 10.6% of organic packaged food sales, and 18.5% of organic beverage sales.*

Organic packaged foods that require the most amount of processing tend to lag in sales compared to those with less processing. Many consumers believe that the nutritional benefits from consuming organic ingredients will be lost in processing. For this reason, organic ready-meals are expected to be the slowest growing packaged food segment in the U.S. from 2010 to 2014. Organic baby food, ice cream and confectionery are expected to grow the most during the same period.

Organic packaged food and beverage sales will never achieve growth rates like those prior to 2008, as the organic market comes closer to saturation. However, the market is expected to continue growing, and there will always be core purchasers of organic products.