U.S. Organic Marketplace Posts Record Sales in 2023

U.S. sales of certified organic products approached $70 billion in 2023, a new record for the sector. Dollar sales for the American organic marketplace hit $69.7 billion last year, up 3.4 percent, according to the 2024 Organic Industry Survey released by the Organic Trade Association (OTA).

Despite stubborn price inflation seen throughout retail aisles, said OTA, consumers remained clear-eyed about their priorities in the products they chose for themselves and their families, valuing health and sustainability and seeking out the USDA Organic label.

The organic marketplace recalibrated its supply chain and reconciled the cost of doing business in part with increased retail pricing.

According to the survey, the industry continued to grow, with organic food sales in 2023 totaling $63.8 billion and sales of organic non-food products totaling $5.9 billion.  

“It is encouraging to see that organic is growing at basically the same rate as the total market. In the face of inflation and considering organic is already seen as a premium category, the current growth shows that consumers continue to choose organic amidst economic challenges and price increases. Although organic is now a maturing sector in the marketplace, we still have plenty of room to grow,” says Tom Chapman, co-CEO of OTA.

Matthew Dillon, co-CEO of OTA, adds that to achieve this growth, “It is essential to educate consumers that choosing organic is a straightforward way to tackle some of the greatest challenges we face. Whether accessing healthy foods, improving transparency in supply chains, mitigating climate change, supporting rural economic resilience, protecting natural resources, or realizing many other benefits, effectively communicating and delivering on these promises is the key to expanding organic’s share of our dinner plate.”

In 2023, the increase in dollar sales in the organic market was driven more by pricing than unit sales. But that said, consumers boosted their purchases of many organic products.

Increases in unit sales were reported for up to 40 percent of the products tracked in this year’s organic marketplace survey.

The survey also showed that prices for many non-organic products climbed faster than for organic products. This means the price gap between conventional and organic is closing, which should help fuel growth for organic products in 2024.

Best-Selling Products in the Organic Marketplace

Produce was the largest organic category in 2023, continuing to be the primary entry point for consumers into the organic marketplace. 

In 2023, the category grew by 2.6 percent to $20.5 billion. Organic produce accounts for over 15 percent of U.S. fruit and vegetable sales.

Top sellers in the organic produce section were avocados, berries, apples, carrots, and packaged salads, and organic bananas saw stronger growth in 2023 than non-organic bananas.

The Grocery Category

The second biggest-selling food category in the organic aisles was the grocery category, with sales of $15.4 billion and a 4.1 percent growth.

This new category represents many of the products previously grouped under breads and grains, condiments, and packaged and prepared foods.

With 21 different subcategories, close to 40 percent of the sales in the grocery category were driven by the top three performers —in-store bakery and fresh breads with sales of $3.1 billion for a gain of almost 3 percent, dry breakfast goods up around 8 percent to $1.8 billion in sales, and baby food and formula at $1.5 billion for a hefty gain of nearly 11 percent.  

Beverages were the third largest category for organic in 2023, posting $9.4 billion in sales, up 3.9 percent.

Related Article: IFPA Supports the Introduction of New Organics Legislation

As always, this category was a driver of innovation, with functional beverages playing a prominent role, whether for enhanced hydration or mental focus.  2023 also saw a surge in new organic, non-alcoholic beverages and mocktails.

On the flipside, organic wine sales were up 2.5 percent to $377 million, and organic liquor and cocktails, while still the smallest sector of beverages at $59 million, posted over 13 percent growth.

Organic dairy and eggs, the fourth-largest category in the organic food market, is another entry point for consumers who want clean, ethical protein sources with lower environmental impacts.

In 2023, organic dairy and egg sales were up 5.5 percent, reaching $8.2 billion. Organic dairy and eggs now account for over 8 percent of all dairy and egg sales.

Milk and cream sales were up almost 5 percent to $4.2 billion, and the organic dairy alternative category grew almost 14 percent in 2023 to around $700 million. 

Millennials and Gen Z Consumers Love Organic Products

Research shows a consistent and growing interest in organic from Millennials and Gen Z.

These generations grew up with organic and sustainable, and the health of people and planet are all top-of-mind for these consumers.

Industry experts see this as an opportunity for organic, with the sector well positioned to meet the product attributes and values sought by consumers today and for future generations. By 2030, the U.S. population will be majority driven by Millennials, Gen Z, and younger generations.