New research suggests that despite expected production increases, sales growth has not matched produce production according to Rabobank.
Factors that contributes to slowed sales are lower prices and availability of popular organic items in stores.
Food Dive reports that produce items like berries, carrots, apples, tomatoes, lettuce and packaged salads dropped by 0.4% from 2016 to 2018 after seeing a 1.3% increase in 2013 and 2015.
As volume increases, prices decline because organic growers and shippers premiums are reduced for certain produce.
Via Food Dive:
Prices have also felt downward pressure from consumers who buy organic produce occasionally but will pass if the cost differential with conventionally grown produce is too much. Price sensitivity can mean weaker prices as organic supplies have increased, the report pointed out. These issues are partially offset by the fact that consumers across all demographic groups — with recent bumps courtesy of millennials and Hispanics — continue to seek out organic foods. According to Nielsen figures reported by the Organic Trade Association in 2016, 82% of U.S. households surveyed reported buying some type of organic products. OTA reported 5.7% of all food sold in the U.S. last year was organic, with both food and non-food organic products commonly available in grocery stores. Another influencing factor could be how much organic food is available around the country, Kathleen Merrigan, professor and executive director of the Swette Center for Sustainable Food Systems at Arizona State University, told Civil Eats. Growth is slowing to single digits as demand outpaces supply, she said.
Production will need to change as organic produce grows to meet the prices of traditional growing in order to see increased growth. How to accomplish that will take new and innovative technological advances.