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If you think "soy milk" and "gardenburgers" from the farmer's co-op when you hear the word "organic" - you haven't been to the supermarket lately. The organic foods market is growing faster than any other food segment, according to an article in www.preparedfoods.com. Organic foods grew 20.4% in 2003 and was responsible for $10.38 billion in consumer sales.

Ten years ago, organic foods could only be found at a farmer's market or specialty food stores. Organic foods can now be purchased in many mainstream outlets, such as chain grocery stores, club stores and restaurants. Growth in previous years has increased to over 20% percent, and if this is an indicator of things to come, retail sales of organic foods could reach $20 billion by late 2005.

Today's organic foods are purchased primarily with health in mind. According to an AC Neilson Survey, consumers say they purchase organic foods because they are healthier (32%), contain fewer pesticides (18%) and are a higher quality product (11%). As the Baby Boomer generation ages and becomes increasingly concerned with health and eating well, the interest in organics will most likely increase. Currently in the US, there are 76 million Baby Boomers over the age of 50.

Despite the perceived benefits of organic foods, there are still barriers for consumers. Producing organic foods is still more costly than regular food production methods. The higher costs are reflected in the retail pricing. In the past, the lack of standards as to what qualified as organic caused confusion for consumers. American National Organic Standards were fully implemented 2003 with the aim of clearly identifying organic products in compliance with USDA standards. Although the differences between something that is "organically grown," "made with organic ingredients," or "pesticide-free," can still be difficult for the average consumer to discern.

As the organic foods market expands, growers and producers will be challenged to make good-tasting products at prices that better compete with standard, non-organic brands. Despite the challenges, the organic market continues to grow and flourish.

Sources:

New Product Trends: Driving Organic Growth, Joan Scheel.
http://www.preparedfoods.com/
2003 Spring Natural/Organic Handbook: State of the Natural/Organic Industry, Laura Everage.
http://www.gourmetretailer.com/
Organic Foods Continue to Grow in Popularity According to Whole Foods Market Survey
http://www.wholefoods.com

Industry Snapshot: Organic Foods

Organic products are a rapidly growing area of the food and beverage sector. Each year more Americans are satiating their hunger pangs with organic foods and beverages that have evolved into more than just tofu and soy meat. Pasta, orange juice, pizza, and potato chips are among some of the products that are attracting customers to this health-conscious industry.

Take a look at our full industry report on organic foods (PDF Format). If you are interested in other industry snapshots, visit our SBDC Counselors Toolkit

Links of Interest

National Organic Program
Organic Trade Association
The Organic Center for Education and Promotion

Did You Know?

SBDCNet's most recent addition is J. Eric Lomeli. Mr. Lomeli moved here from Los Angeles, following family who left the heavily populated California city for the South Texas lifestyle. A recent graduate of the Master of Science in GIS at the University of Redlands, Eric is already offering demographic data related to unique spatial analyses for SBDC counselors and planning to promote the service through presentations. He does come from family small business entrepreneurs who operated an ice cream factory in the Mexican state of Nayarit. Eric is a reader of history and enjoys traveling.

Are You Paying Attention to
Demographic Trends?

In today's world, a recent census report (2003) indicates that 25.3 million of U.S. residents are Mexican in origin, reflecting 9% of the nation's total population.

Furthermore, the total of 16.6 million Mexican residents, in California at 9.9 million and 6.7 million of Texas, are part of that 9%.

Of the managerial and professional occupations, the census identifies 12% are filled by individuals of Mexican heritage.

See also our website for information on demographics:
http://sbdcnet.utsa.edu/SBIC/demographics.htm

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