An outline of the Natural and Organic Foods and Beverages in the U.S., 4th Edition report which examines sales and growth potential, identifying key issues and trends that will affect the marketplace through 2019. The report also analyzes and profiles major marketers and retailers, examines marketing and new product trends, and tabulates consumer attitudes and behaviors toward natural/organic foods and beverages and the corresponding retail shopping patterns. Numerous tables, charts, graphs, and illustrations highlight and reinforce key points.
U.S. retail sales of natural and organic foods and beverages rose 5.5% to nearly $53.5 billion in 2014, 53% higher
than sales five years earlier, with the organic foods sector leaping ahead 12.5% in 2014. Amid this rapid growth,
the marketplace is changing rapidly, with new plays by traditional retailers like Kroger, Walmart, and Target, and
strengthening competition to Whole Foods Market from smaller natural food chains and independents. Meanwhile,
lawsuits over alleged misuse of “natural” claims on food labels have mushroomed in the past several years.
“Natural” claims have also been slammed by the popular media, consumer advocacy groups, and even organic
industry groups as being ill-defined and meaningless. The result has been a retreat from “natural” labels by many
marketers, and confusion or avoidance on the part of consumers.
This completely updated report examines sales and growth potential, identifying key issues and trends that
will affect the marketplace through 2019. The report also analyzes and profiles major marketers and retailers,
examines marketing and new product trends, and tabulates consumer attitudes and behaviors toward natural/
organic foods and beverages and the corresponding retail shopping patterns. Numerous tables, charts, graphs,
and illustrations highlight and reinforce key points.
The information in this report was obtained from primary and secondary research. Primary research entailed
interviews with members of the industry and on-site examination of retail stores. Secondary research involved the
evaluation and comparison of data from articles found in financial, marketing, and industry publications, as well
as on corresponding websites and in consumer social media. Other sources for secondary data include annual
reports, 10-Ks, transcripts of investor conference calls, press releases, and literature from individual companies;
articles in trade publications such as FoodNavigatorUSA, Natural Foods Merchandiser, Progressive Grocer, and
Supermarket News; consumer publications such as Forbes, The Los Angeles Times, The New York Times, and
The Wall Street Journal; government reports; industry associations such as the Organic Trade Association (OTA);
and other reports by Packaged Facts.
Statistics on market revenues and growth trends are derived from publicly available data on the retail marketplace,
be they quantitative or qualitative; a broad range of societal and economic trends are factored in, to help shape the
most accurate possible view of sales progress.
The consumer data in this report are derived from the Fall 2010 through Fall 2013 Simmons National Consumer
Surveys Adult Study 12-Month from Experian Marketing Services. On an ongoing basis, Experian Marketing
Services conducts booklet-based surveys of a large and random sample of consumers (approximately 25,000 for
each 12-month survey compilation) who in aggregate represent a statistically accurate cross-section of the U.S.
population. In addition, Experian Marketing Services has developed an index system to calibrate the usage of a
product or agreement with a given statement among a given segment of the population, compared with usage or
agreement among the population as a whole. If, for example, 10% of adults surveyed shop in a particular retail
channel, with 20% of persons age 18-24 and 5% of those 65 or older doing so, the younger age group would have
an index of 200, the older group an index of 50. Generally speaking, Packaged Facts considers an index of 110 or
higher, or 90 or lower, to represent statistically significant deviations from overall averages.
A Range of Sales Estimates from Different Sources
Sales of natural and organic foods and beverages are difficult to calculate since this market cuts a broad swath
across virtually every food category, with “natural” or “organic” characterizing products in widely varying manners
and degrees. Compounding this difficulty, sales of natural and organic foods and beverages in the United States
occur through many channels not tracked by scanner services such as Information Resources, Inc. (IRI), and
through scores of privately owned marketers unwilling to divulge sales figures. In addition, a substantial part of
retail sales are store brands subsumed under broader private label groupings.
Natural and organic product sales are tracked by multiple industry sources, including New Hope Natural Media, a
division of Penton Media, Inc. (http://newhope360.com) and publisher of Natural Foods Merchandiser and Nutrition
Business Journal, among other publications; the Organic Trade Association (OTA, www.ota.com); and SPINS, Inc.
(www.spins.com), whose SPINSscan Natural and Specialty Gourmet and SPINSscan Conventional All Outlet-
Combined (powered by Nielsen ScanTrack) channel scanner data services track sales of UPC-coded products
through natural and specialty/gourmet food channels. Even so, due to these sources’ different measurement
matrixes, the resulting figures are extremely diverse.
SAMPLE INSIGHTS & HIGHLIGHTS
Packaged Facts conservatively estimates that total U.S. retail sales of natural and organic foods and beverages
through all retail channels rose to $53.5 billion in 2014—a 5.5% increase over the previous year’s sales of $50.7
billion and 52.9% higher than sales five years earlier. During the 2009-2014 period, sales rose by a compound
annual growth rate (CAGR) of 11.2%. Since the end of the recession, sales of organic foods and beverages
have grown at a steadily increasing clip, and are projected to advance 12.5% in 2014 to produce $34.0 billion in
retail sales, 61.9% ahead of sales in 2009. During the five-year period, organic foods and beverages grew at an
enviable CAGR of 12.8%.
Packaged Facts projects that the retail market for natural and organic foods and beverages will grow by 62.1%
between 2014 and 2019, for a compound annual growth rate of 10.1%.
Based on figures and estimates from several sources, our previous edition of this report, and current market
trends, Packaged Facts estimates that fresh produce will account for approximately 35% of all natural and organic
foods and beverages sold in 2014. The next largest category is dairy products, including milk and milk alternatives,
yogurt, ice cream, eggs, cheese, etc., comprising 30% of total retail sales. Beverages, including coffee, tea,
juices, soft drinks, and so forth represent 15% of sales; packaged/prepared foods account for 10%; and all other
categories including snacks represent another 10%.
SAMPLE INSIGHTS & HIGHLIGHTS
Share of U.S. Retail Sales of Natural and Organic Foods and Beverages
by Product Category, 2014 (percent)
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