Organic Food

Topics: Organic food, Organic farming, Organic certification Pages: 21 (3917 words) Published: May 18, 2013
Characteristics of
U.S. Organic Sector
The U.S. organic food industry
crossed a threshold in 2000: for the
first time, more organic food was purchased
in conventional supermarkets
than in any other venue. Industry estimates
suggest that nearly half of the
$7.8 billion spent on organic food in
2000 was purchased in conventional
retail outlets. Organic products are
now available in nearly 20,000 natural
foods stores (Natural Foods Merchandiser),
and are sold in 73 percent
of all conventional grocery stores
(Food Marketing Institute).
Growing consumer demand for
organic products has been manifested
in the market in many ways. Acreage
of certified organic farmland is
increasing to meet growing consumer
demand. According to the most recent
USDA estimates, U.S. certified
organic cropland doubled between
1992 and 1997, to 1.3 million acres.
Preliminary estimates for 2001 suggest
that certified organic acreage significantly
increased between 1997
and 2001. From the consumer side,
new products are being introduced
rapidly. For example, over 800 new
organic products were introduced in
the first half of 2000. Desserts made
up the majority of new products in
2000, while most new products introduced
in 1999 were beverages (Myers
and Rorie).
The new U.S. Department of Agriculture
standards for organic food, slated
to be fully implemented by October
2002, are expected to facilitate further
growth in the organic foods industry.
The USDA standard defines organic
production as “A production system
that is managed in accordance with
the [Organic Foods Production] Act
and regulations in this part to respond
to site-specific conditions by integrating
cultural, biological, and mechanical
practices that foster cycling of
resources, promote ecological balance,
and conserve biodiversity.”1 The
national organic standards address the
methods, practices, and substances
used in producing and handling
crops, livestock, and processed agricultural
products (see box). All agricultural
products that are sold,
labeled, or represented as organic
must be in compliance with the regulations
after October 2002.
Organic food is sold to consumers
through three main venues in the
United States—natural foods stores,
conventional grocery stores, and
direct-to-consumer markets—and a
small amount is exported to foreign
markets. USDA does not have national
statistics on organic retail sales.
Industry sources have reported retail
sales for organic food, but those data
are fragmentary and, at times, inconsistent. A trade publication, the Natural Foods Merchandiser (NFM)
reported estimates of total U.S. retail
sales of organic foods for 1990
through 1996. NFM estimated total
organic sales through all marketing
outlets rose steadily from about $1
billion in 1990 to $3.3 billion in
1996, the last year that total sales
were reported. Since 1999, Packaged
Facts, a market research firm, has
been reporting organic food sales.
According to Packaged Facts, organic
food sales in all venues totaled $6.5
billion in 1999 and $7.8 billion in
2000. This increase continues the
streak of industry growth equal to
20 percent or more annually since
Purveyors of natural products were
the primary sales force for organic
food since the beginning of the organic
food movement over half a century
ago. Until 2000, the largest retail outlet
for organic food was natural foods
stores followed by direct markets
(such as farmers markets), according
to NFM data (fig. 1). In 2000, 49 percent
of all organic products was sold
in conventional supermarkets, 48 percent
was sold in health and natural
products stores, and 3 percent
through direct-to-consumer methods
(Packaged Facts). In contrast, in
1991, 7 percent of all organic products
were sold in conventional supermarkets
and 68 percent were sold in
health and natural products stores
Fresh produce remains the top-selling...
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