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OPN Connect Newsletter 189 · October 22, 2020

Organic Fresh Produce Sales Continue Double Digit Growth in Q3; Top $2 Billion For the Quarter


Total organic fresh produce sales and volume continued to register double digit growth in the third quarter of 2020, with July-September 2020 sales increasing 16 percent and volume up 15 percent compared to the same period in 2019, according to the Q3 2020 Organic Produce Performance Report released exclusively by the Organic Produce Network and Category Partners. 

Q3/2020 organic total, US

Stemilt January 2021

Organic fresh produce in Q3 2020 saw a continuation of trends established in March of this year, with elevated sales across the entire category as consumers continued at-home eating in the face of restaurant closures. As a result, sales of organic fresh produce sales topped $2.2 billion for the quarter and accounted for 12 percent of all produce sales, compared to a dollar share of 9.8 percent in the second quarter of this year. 

Q3/2020 regional performance highlights

As has been the case all year, organic growth continues to increase at a faster rate than conventional produce. The 16 percent growth in third quarter organic sales was well above the 10 percent dollar growth in conventional produce for the same period. Additionally, the volume (pounds) increase of 15.6 percent was nearly double that of conventional produce, which increased by 8.2 percent (compared to second quarter growth of 12.9 percent). 

Chelan Fresh January 2021

Matt Seeley, CEO, Organic Produce Network

“Once again, sales of organic fresh produce show no signs of slowing and continue to be a major growth opportunity for retailers across the country. In the third quarter, organics drove twice the dollar share compared to volume share←12 percent of total produce dollars and 6 percent of total produce volume, underscoring why the growth of organics is so powerful and important to retailers,” said Matt Seeley, CEO of Organic Produce Network. “As consumers continue to shift from conventional to organics, substitution is driving incremental dollars.”

Valent January 2021

Q3/2020 top 10 categories by dollar

Packaged salads, strawberries, and herbs generated the highest real growth in organic dollars in Q3, causing an added $105 million in incremental sales growth over the same period last year and more than 35 percent of total organic produce dollar growth. With packaged salads leading the way (accounting for 17 percent of all organic fresh produce sales), the top 10 growth categories accounted for 70 percent of all organic dollar growth.

Spearheading the gains in Q3 organic fruit sales were increases in fruit availability, supplies, and selection. The berry category, a powerful sales driver year-round, is especially strong during the summer months. Strawberries ranked second in overall organic dollars during the third quarter, with blueberries the fourth-highest dollar contributor. Additionally, strawberries (27.1 percent) and blueberries (17 percent) generated among the strongest dollar increases of all organic produce categories during the third quarter of 2020 compared to the same period last year.

 
Q3/2020 organic vs. conventional price/lb variance

Shenandoah Growers Jan2021

Organic apples, also a traditionally strong category, continue to perform well despite the fact that Q3 marks the low ebb of domestic crop availability. During the third quarter, organic apple sales jumped by nearly 20 percent to $128 million, up from $107 million the previous year. Organic grapes, with domestic production peaking, moved into the top 10 categories in organic produce dollars. However, grapes did show a modest decline of 8 percent in Q3 sales compared to a year ago.

Q3/2020 top/bottom categories by dollar

Bananas continued to be the volume leader of organic produce offerings, generating 18 percent of total volume and increasing by 8.3 percent from the previous year.

Naturesafe January 2021

The West region of the United States led in all areas of organic sales and volume in the third quarter, generating a 20 percent increase in dollars and 17 percent lift in volume compared to Q3 of last year. Overall ACV (all commodity volume) performance in the third quarter also grew from the second quarter. In Q2 of this year, ACV dollars averaged $7,014 and jumped to $8,751 for the most recent quarter, an increase of nearly 25 percent.

Steve Lutz, Vice President, Category Partners

“The Midwest and South continue to be the strongest opportunity regions for organic produce growth. Organic ACV dollars in those two regions lag far behind the West and Northeast," said Steve Lutz, vice president for Category Partners. “Even though organic growth is strong compared to conventional produce, growth rates in the Midwest are below every other region, with ACV volume and dollar performance in the Midwest less than one-half the rate of supermarkets in the West.”

For the first half of 2020, organic fresh produce sales were up 11 percent in dollar growth and 13 percent in volume comapred to the first six months of 2019. Total organic fresh produce sales for January-June of this year totaled $3.3 billion.

The full Q3 2020 Organic Produce Performance Report  is available on the Organic Produce Network website at https://www.organicproducenetwork.com/education.

Starr Ranch
Global Organics Group January 2021

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