Tabs

Tabs

Quick Stats

Quick Stats

Organics Dashboard From Passport

  • The organic packaged food and beverage market in the US is highly fragmented, with the leading player, Danone Groupe, recording a value share of 3.8% in 2019, followed by Amy’s Kitchen Inc. with a share of 3.6%. Artisanal brands are popular in the US, with a value share of 2.9% in 2019.
  • The US is the largest market for organic products in the world, ranking 1st globally in terms of market size. The forecast growth rank is low, recorded at 23rd globally. However, the large market size is a highly influential factor in the relatively low growth rate.

  • Organic products in the US recorded a market size of US$19.8 bn in 2019, representing about 42.0% of the global market with a per capita expenditure of US$60.38.
  • With an increasing demand from health-conscious consumers and the rise of a wide variety of premium offerings, organic products in the US are expected to remain strong, recording a value CAGR of 4.9% for the forecast period 2019-2024.

 

Qualitative Analysis

Qualitative Analysis

Quick Facts
  • Organic packaged food and beverages in the US recorded value growth of about 6.2% in 2019, registering a market size of US$19.8 bn.
  • With a 17.0% increase in value, organic honey recorded the strongest growth in 2019.
  • Organic black tea recorded the highest value increase in 2019, growing by 8.0%. However, this growth is influenced by a 2.0% increase in average unit price for organic hot drinks, which is still lower than the increase in the average unit price of soft drinks, standing at 4.0%.
Market Trends
  • Organic alternatives have witnessed a decline in demand within most soft drink categories, except juice. However, in hot drinks, demand for organic beverages is strong, with organic tea witnessing a rise in sales as clean labels, ethical sourcing and sustainability, which are aspects rolled into the organic label, increase in priority among tea drinkers. Such characteristics are defining the quality of tea and the ethics of producers and are concurrent with the popularity of specialty products and premiumization within the organic category.
  • Premiumization is helping drive demand for organic confectionery, particularly organic chocolates. The assumption of chocolate providing a variety of health benefits is becoming more mainstream, which is the reason why consumers are turning towards consuming chocolate and opting for the more premium and organic products. While several confectionery products are seen as a quick, on-the-go option for dessert, consumers are putting quite a bit of thought into their purchase, with factors such as the country of origin becoming significantly crucial, similar to picking wine, highlighting that the growth of organic chocolate is likely to vary from the kind of growth expected for non-organic offerings, with organic confectionery overall set to record a forecast value CAGR of 5.0% for the forecast period 2019-2024.
Competitive Landscape
  • One of the major branded players in organic beverages in the USA is Unilever United States Inc., ranking third among branded players. In an attempt to boost brand share and leverage the rising demand for premium tea, Unilever acquired the Pukka and Pure Leaf brands to expand its hot tea business. Both brands have witnessed positive performance within organic categories such as organic black, green, fruit/herbal tea, thus presenting an opportunity for Unilever to improve its share within hot tea.
  • Private label brands are registering a significant share of sales in the US, with a value share of about 13.0% in 2019. This rise in demand for private label products is fuelled by the change in consumer perception, with private label products now seen to provide similar quality to that of branded products at a more affordable price. Furthermore, brand loyalty is not as strong in commoditized products such as olive oil, leading to several brands gaining share benefiting from discounted price offerings.
  • With more consumers becoming health conscious, the perception on artificial preservatives and additives, in general, has grown increasingly negative, pushing ready meals manufacturers to revamp their offerings with new ingredients and entirely new product lines. As a result of the growing importance of health and convenience, organic ready meals have witnessed strong demand, with an 8.6% value increase in 2019 alone. Brands such as Amy’s Kitchen have achieved substantial growth by offering healthy and convenient organic ready meals options. Over the forecast period, as competition increases, organic certification is likely to be more widely pursued as an avenue for further growth.
Prospects And Growth Opportunity
  • The rising coffee culture is helping drive demand for organic coffee in the US, with increasing premiumization in the category driving consumers towards organic coffee, as they are perceived to be of higher quality. Furthermore, products’ origin and manufacturing process are becoming vital purchasing factors, as US consumers are more aware of their effects on taste. Also, organic certifications have become a seal of assurance, indicating that products are of high quality and are responsibly sourced. With further advancements in production processes and increasingly efficient technology expected to drive down prices, organic coffee is expected to become more widely adopted, registering a forecast value CAGR of 3.6% for the period 2019-2024. The growth is further accentuated with private labels offering high-quality products at lower prices.
  • The changing consumer perception of private labels has also helped drive demand in the category of organic juice. With a high level of fragmentation of the organic juice market, retailers are able to leverage their higher number of outlets to secure a share of private labels over other bands. Today, private label consumers are not restricted to the price-conscious consumer, rather many consumers with high disposable income are turning to private label ranges. Products like Target’s Good & Gather and Aldi’s Simply Nature for juices, not only feature an organic certification but also include other premium attributes such as GMO-free certifications and fortified functionality.
  • Organic honey has shown a substantial increase in demand, with new offerings and premiumization influencing consumer purchase decisions. Today, honey is no longer viewed as a commodity, as consumers are presented with a wide array of options including local honey, which is promoted through the attribute of being made from pollens native to the area where the consumer lives. Additionally, the rise in demand for honey is driven by increasing knowledge of its health claims, as it contains several antioxidants and is seen as a guilt-free way of adding sweetness to a meal. Organic honey, in particular, is seen to resonate the best among consumers as the organic certification generally provides an impression of less processing and high quality.
General Health and Wellness Trends
  • Consumers in the US are increasingly concerned about the environmental impact of animal-based farming in the meat and dairy industries due to rising concerns on the ethical treatment of animals. This has led to an interest in alternatives such as plant-based and demand for products from companies like Beyond Meat and Impossible Foods, which has, in turn, led to incentives for new manufacturers entering the fray and for innovative new products to generate nationally. While these products are still priced higher than most traditional animal products, they are rapidly moving towards mainstream status and appear unlikely to cease growing at any point soon, and likely shaping the industry for years to come.
  • Within soft drinks, functionality has become an increasingly important factor influencing purchasing decisions. As a result, functional/fortified products stood out in categories such as carbonates, water and hot tea. The benefits these products have vary significantly, appealing to a large variety of consumers' needs such as modified energy, cognitive enhancement, and fitness and hydration aids. Driven by product innovation and the increasing premiumization trend within beverages, functional products are expected to continue to witness growth, as manufacturers grow restless to increase value sales.
General Economic and Demographic Landscape

Economy:

  • The economy of the US is expected to slow down in 2020, with real GDP witnessing an expected increase of 1.5% post gains of 2.3% in 2019. The slowdown in economic growth is partially driven by a less supportive fiscal policy, a weaker global economic outlook as well as trade and political uncertainties.
  • The labor market is expected to remain strong, with wages witnessing an increase to balance the slowdown in job growth. Unemployment was recorded at 3.7% in 2019, post a 2018 level of 3.9%, with the reduction primarily driven by new jobs in the service sector.
  • Overall, economic growth is expected to be moderate in the coming years, with real GDP growth reaching 1.6% through 2026.

Population demographics:

  • The population of the US has been rising at about 1.0% per year, reaching a total of 328 million in 2018.
  • The median age in the US witnessed an increase from 35.4 years in 2000 to 38.2 years in 2018. A further rise is expected, with the indicator reaching 40.3 years in 2030.
  • Fertility was recorded at 1.8 births per female in 2017, similar to 1980, with the indicator expected to remain at this level through 2030. Additionally, the US is witnessing an exponential rise in the Hispanic population, which is expected to surpass the non-Hispanic population in the future. The US is the world’s fifth-largest Spanish speaking country.

Income & expenditure:

  • The savings ratio in the US is the same as in 2018, recorded at 10.7% of disposable income, with the indicator staying still since the recession.
  • Consumer expenditure per capita in 2018 was recorded at US$41,460. For the period 2019-2030, total consumer expenditure is expected to record a cumulative increase of 17.7%, averaging 1.5% annually.
  • Per capita disposable income was US$46,322 in 2018. For the period 2019-2030, cumulative growth in total disposable income is expected to reach 17.9% in real terms, registering an annual average of 1.5%.

 

 

Data

Data

Organic Packaged Food and Beverage Data

Data type

Unit

2016

2017

2018

2019

2020

2021

2022

CAGR
(16-19)

CAGR
(20-22)

Health & wellness products consumption*

USD million

167,196.0

167,951.6

171,039.6

175,145.4

177,998.4

181,260.1

184,706.7

1.6%

1.9%

Organic packaged food and beverages consumption

USD million

16,387.2

17,577.0

18,698.9

19,869.6

20,999.0

22,122.0

23,211.2

6.6%

5.1%

Organic packaged food consumption

USD million

14,956.0

16,086.6

17,146.5

18,227.9

19,297.7

20,364.5

21,394.7

6.8%

5.3%

Organic beverages consumption

USD million

1,431.2

1,490.4

1,552.4

1,641.8

1,701.3

1,757.5

1,816.5

4.7%

3.3%

Organic packaged food and beverages consumption as a % of total health & wellness products consumption

%

9.8%

10.5%

10.9%

11.3%

11.8%

12.2%

12.6%

-

-

* Health and Wellness Definition: Health and wellness is the aggregation of organic packaged food and beverages, fortified/functional packaged food and beverages, naturally healthy packaged food and beverages, better for you packaged food and beverages and food intolerance products.

Economic and Demographic Data

Data type

Unit

2016

2017

2018

2019

2020

2021

2022

Total population

million

323.1

325.1

327.2

329.1

331.1

333.0

334.9

% Middle and upper class of total population

%

22.1

22.1

21.7

21.8

22.0

22.0

22.0

% Population aged 65+

%

15.2%

15.6%

16.0%

16.4%

16.9%

17.3%

17.8%

% Population aged 0-14

%

18.9%

18.7%

18.6%

18.4%

18.3%

18.1%

17.9%

% Population with higher education degrees

%

39.5

39.9

40.2

40.5

40.8

41.0

41.2

Average number of children per household

children

0.6

0.6

0.6

0.6

0.6

0.6

0.6

GDP per capita

USD per capita

57,928.5

60,032.6

62,904.3

65,108.3

64,726.9

65,603.6

66,423.9

Consumer expenditure per capita (US$)

USD per capita

38,351.7

39,752.1

41,459.7

42,830.9

43,309.3

43,681.8

44,029.0

Consumer expenditure per capita on food and non-alcoholic beverages (US$)

USD per capita

2,511.7

2,551.0

2,640.0

2,702.7

2,662.5

2,672.4

2,677.9

Retailer and City Data

Top 5 Cities By Population

Data category

Rank

City/retailer

Population
(millions)

Top cities by population (2019)

1

New York

20.2

Top cities by population (2019)

2

Los Angeles

13.4

Top cities by population (2019)

3

Chicago

9.5

Top cities by population (2019)

4

Dallas, TX

7.5

Top cities by population (2019)

5

Washington

6.3

Top 5 Groceries Retailers By Sales

Data category

Rank

City/retailer

Top grocery retailers by sales (2019)

1

Walmart Inc

Top grocery retailers by sales (2019)

2

Kroger Co

Top grocery retailers by sales (2019)

3

Albertsons Cos Inc

Top grocery retailers by sales (2019)

4

Koninklijke Ahold Delhaize NV

Top grocery retailers by sales (2019)

5

Publix Super Markets Inc

Definitions

Definitions

Term

Definition

Health and Wellness

Health and wellness is the aggregation of organic packaged food and beverages, fortified/functional packaged food and beverages, naturally healthy packaged food and beverages, better for you packaged food and beverages and food intolerance products.

Organic packaged foods and beverages

This category includes packaged food & beverages that are certified organic by an approved certification body. Organic production is based on:

• A system of farming that maintains and replenishes soil fertility without the use of toxic and persistent pesticides and fertilizers.
• Organic food & beverages are minimally processed without artificial ingredients, preservatives or irradiation.
• The use of GMOs (Genetically Modified Organism) is prohibited. “Certified Organic” means the item has been grown according to strict uniform standards that are verified by independent state or private organizations.
• Depending on the country, such products are called ‘organic’, ‘biological’ or ‘ecological’: For organic products to be included under Euromonitor definitions, the organic aspect needs to form part of positioning/marketing of the product. This is an aggregation of organic baby food, bakery, confectionery, dairy, ice cream, oils and fats, ready meals, rice, sauces, dressings and condiments, snack bars, soups, spreads, sweet and savory snacks and other organic food.

Note that fresh food products or individual ingredients are not included in this definition.

Compound annual growth rate (CAGR)

The compound annual growth rate (CAGR) is the average annual growth rate over a specified period of time. For instance, the CAGR consumption of from 2016 – 2019 will be the average growth rates across these three years.

USDA GATS data clarification

The data presented in table 2.4 represents the dollar values of the top 5 organic commodities as well as of the total organic exports of the trade partner for the period 2016-2019 as per the United States Department of Agriculture’s Global Agricultural Trade System, a database consisting of international agricultural, fish, forest and textile products trade statistics dating from the inception of the Harmonized coding system in 1989 to present.

Policy Information

Policy Information

Government Agency(s) / Competent Authority

Authorized Government Agency(s): 

United States Department of Agriculture
Agricultural Marketing Service
National Organic Program
 

Agency(s) Contact Information: 

United States Department of Agriculture
Agricultural Marketing Service
National Organic Program
1400 Independence Avenue
SW Room 2642-South
Stop 0268
Washington, D.C. 20250-0268
Phone: 202-720-3252
Standards Fax: (202) 260-9151
Contacts
Website

Organic Regulations and/or Standards

Name(s) of Regulation and/or Standard: 

Organic Foods Production Act of 1990
National Organic Program
National List of Allowed and Prohibited Substances
Guidance & Instructions for Accredited Certifying Agents & Certified Operations

Date of Implementation: 2002

Regulation and/or Standard Scope: 

The Organic Foods Production Act covers crops, livestock, and the products derived from them; personal care products that meet the standards may use the organic label.

Certification and Accreditation

Certification: 

Certification is required for 

  • Farms that sell more than $5,000 in organic products per year (gross sales).
  • Handlers that sell more than $5,000 of organic processed food, including handlers that place bulk products into smaller packages or that repackage/relabel products.
  • Processors that sell more than $5,000 of organic processed products, unless all products contain less than 70 percent organic ingredients or only identify the organic ingredients in the ingredient statement.
  • Vendors that handle (e.g. package) and sell products online (but not in stores) or otherwise deliver organic products.

Locate a certifier

Accreditation Method: 

Government

Accreditation: 

USDA's National Organic Program accredits certifiers across the world.

Additional Information

For those who export organic products from the United States, additional resources may be available:

Federal Export Tools

State Export Tools