Aug 11, 2021

Sales of organic food grew nearly 13% to more than $56 billion

Home cooking during the pandemic has lifted overall sales of organic products in California and across the U.S.

As people worked from home and ventured out less frequently, the market for organic products jumped by more than 12% to nearly $62 billion in 2020, according to an annual survey conducted by the Organic Trade Association.

Highlights of that survey were shared during a meeting of the State Board of Food and Agriculture, which focused on California organic agricultural production. The monthly meeting, held last week via webinar, included speakers who discussed market trends, research and emerging issues related to organic production.

“Shoppers really deeply stocked pantries and freezers, so lots of categories had pretty big upticks,” said Angela Jasiello of the Organic Trade Association.

Sales of organic food grew nearly 13% to more than $56 billion, according to the survey.

Organic fruits and vegetables, which now account for 15% of the total U.S. retail produce market, saw notable gains. Fresh organic produce sales rose by nearly 11% in 2020 to nearly $18.3 billion. Frozen fruits and vegetables jumped 28.4% to $925 million. Canned fruits and vegetables increased 24.7% to $759 million. Dried beans, fruits and vegetables went up 18.1% to $503 million.

Growth across all organic categories was constrained primarily by supply, Jasiello said, as “supply chains were caught off guard” from raw product to packaging to shipping capacity.

Sales of organic nonfood products, which account for about 9% of total organic sales, reached $5.5 billion in 2020, “with some real winners in this category – and some struggles as well,” she said. For example, fiber – the largest segment in the nonfood category – experienced a “slow-growth year” of about 5%, as there wasn’t “much browsing in retail stores, not as many places to be and excuses to shop for new fiber items.”

California continues to be “an organic powerhouse,” she said, ranking No. 1 in the nation with 5,077 organic businesses. Some 90% of California shoppers buy organic, with commodity sales increasing 27% to nearly $3.6 billion – 36% of the U.S. total – from 2017 to 2019. The state boasts almost 20% of all organic acreage in the U.S., with 74% of its counties considered organic hotspots. Berries, chicken, milk, lettuce and grapes are the top organic crops in California, she noted.

On the national level, Jasiello said the biggest policy challenge relates to the lack of movement to advance and update organic standards at the U.S. Department of Agriculture. She cited a backlog of 20 different recommendations that have gone through the National Organic Standards Board that have yet to be implemented.

“This will continue to harm the organic sector as innovation and environmental and consumer demands continue to increase,” Jasiello said.

The Organic Farming Research Foundation in Santa Cruz, which regularly surveys organic farmers about their needs and challenges, will be doing a special report on California trends using data from its 2020 national survey, said Executive Director Brise Tencer. That report will be available in the fall, she noted.

In its 2016 survey, irrigation and drought management came up as top needs for organic farmers, she said, with soil health, biology, quality, nutrient management and fertility management being close behind.

The foundation has invested in research to help support development of quality strawberry transplants for organic systems. It is also developing integrated irrigation management strategies to improve water and nutrient use efficiency in organic processing tomato production, Tencer added.

Despite its name, California Certified Organic Farmers in Santa Cruz certifies more than 4,000 organic producers throughout North America, including in Mexico, although the lion’s share of its membership remains in California, where it certifies more than 2,000 farmers and nearly 1,000 processors and handers, according to CEO Kelly Damewood.

CCOF’s goal, she said, is to reach 30% organic farmland in the state by 2030, “because we believe organic can really offer solutions for climate resilience, economic security and health equity.” As the leading organic state, California currently farms about 10% of its land organically, she noted. Less than 1% of the nation’s land is farmed organically.

Since the start of the CDFA Produce Safety Program in 2017, more than 430 California farms have been inspected, with less than 20% of them organic, said program Supervisor Shelley Phillips. Organic farms “generally have a good understanding of food safety,” she said. About a third of those inspected have gotten clean records, she said, although two-thirds are not in full compliance.

Some compliance issues relate to personnel qualifications and training that haven’t been completed, sometimes due to a lack of training records or other paperwork discrepancies, she said. Inspectors also recorded some health and hygiene compliance issues related to improper hand-washing or access to facilities. Most noncompliance issues relate to record keeping, which Phillips said is “easily correctable and is not really going to lead to a large food safety issue.”

Noting the program’s motto is “to educate before we regulate,” she said the program offers “a lot” of education and outreach to ensure farmers understand how to comply with the produce safety rule.

“We want this culture of food safety to become ingrained” in California farms, she added.

Jeremy Johnson, chairman of the California State Organic Program Advisory Committee, said it is working with the state to ease the administrative burden on organic farmers so that there’s less paperwork. He said the committee has also been providing recommendations to the state on how it can best use excess funds from organic registration to support organic. It has narrowed priorities to equity, education and research.

Houston Wilson, director of the University of California Organic Agriculture Institute, formed in 2020, said “a huge gap” remains in research for organic. Though research is needed in every area of production, he said the institute’s highest priority is providing more effective crop nutrition practices, followed by weed, pest and disease management.

With creation of the institute, Wilson said, California organic farmers will now have an additional resource to maintain their lead in the nation “while at the same time contributing to the economic viability and environmental quality of agriculture in this state.”

– Ching Lee, California Farm Bureau