Daily Spotlight

Opportunities in Organic Food

The demand for organic food in America is rapidly increasing as consumers and families have made fundamental changes in health consciousness. The numbers indicate that organic food has indeed transitioned from a niche lifestyle choice into an important economic driver. Drilling down, sales of organic food have grown at a compound annual rate of 9% over the past 20 years, to last year's total of $65 billion. As a percentage of the overall food-at-home spending category, organic food's share has increased from 2.5% to 5.8% during that time span, as overall spending on food has increased at a 4% rate. Several factors are driving the trend. For one, diet has become a key component of personal wellness, and consumers are increasingly focusing on cleaner ingredients and nutrient density. For another, the price gap between conventional and organic goods has shrunk in recent years. For a third, mainstream retailers have caught on to the trend and are stocking more organic options; more than one-half of organic food sales now occur through mass-market retailers, supermarkets, or big-box club stores. We think the organic food trend, driven in part by younger generations that prioritize authenticity and ethical production, is durable and likely to continue into the foreseeable future....  from 2.5% to 5.8% during that time span, as overall spending on food has increased at a 4% rate. Several factors are driving the trend. For one, diet has become a key component of personal wellness, and consumers are increasingly focusing on cleaner ingredients and nutrient density. For another, the price gap between conventional and organic goods has shrunk in recent years. For a third, mainstream retailers have caught on to the trend and are stocking more organic options; more than one-half of organic food sales now occur through mass-market retailers, supermarkets, or big-box club stores. We think the organic food trend, driven in part by younger generations that prioritize authenticity and ethical production, is durable and likely to continue into the foreseeable future.  more

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