US sales of organic foods and beverages continued to outpace conventional grocery sales in 2010, with the market growing 8.5 percent to reach $23.2bn at retail, according to a new report from Packaged Facts.
The market research organization’s latest report,“Natural and Organic Foods and Beverages in the U.S., 3rd Edition”, examined the market for both organic and natural foods and beverages, and found that the US organic retail sector had grown by 56 percent over the past five years. Meanwhile, sales of natural foods and beverages have grown even faster, by ten percent in 2010, to $15.4bn – 73 percent up on sales in 2006.
“The natural foods and beverages segment has grown faster than the organic segment primarily because mainstream marketers have been converting and positioning more of their products with natural formulations,” the report said.
Apart from for certain specific ingredients, there is no regulated definition of ‘natural’, so the term usually refers to products that are specifically positioned as natural by brand marketers. Organic, however, is a strictly regulated claim.
Nevertheless, the two terms are often intertwined in the minds of consumers.
“Generally speaking, all products that are organic are also natural, if not technically then most certainly in the minds of consumers,” the market researcher said. “On the other hand, not all natural products are organic or perceived to be from the perspective of consumers, who expect organic products to be clearly labeled as such.”
While growth in both the organic and natural market segments has been rapid over the past five years, the report predicts even faster growth to 2015. For organic foods and beverages, Packaged Facts projects sales growth from 2012 of 11 to 12 percent a year, and 15 percent annually for the natural sector.
The report said that Frito-Lay’s decision to switch its snack portfolio to natural formulations had already given the market for natural foods and beverages a huge sales boost, and if other manufacturers chose to do the same, growth rates could be even higher.
During the five year period from 2006 to 2011, growth in the organic and natural sectors hit a low of seven percent in 2009 – when sales of conventional foods and beverages grew just two percent.