Organics Are Hot — Pandemic Fuels Ongoing Consumer Demand
The Popularity of Organics Peaks Despite Interest in Distinctions That Go Beyond.
Riding a growth curve that has been continuous for years and echoing the pandemic-influenced bump in sales of a diversity of food and beverage products, organic foods and beverages have had a banner year during the pandemic, driven no doubt by consumer perceptions of organics as premium, quality products with a halo of healthfulness.
As noted by Food Business News, “Organic food sales in the United States increased by a record 12.8% in 2020 to a new high of $56.4 billion, according to the Organic Trade Association. Almost 6% of the food sold in the United States last year was certified organic, reflecting strong, pandemic-driven demand across nearly every organic food aisle.”
Certainly consumer interest in organics was showing no signs of slowing down pre-pandemic: Our Organic and Beyond report (the most recent in our series of studies on organics dating back to 1996) showed 82% of consumers using organic foods and beverages at least monthly or occasionally, with 18% saying they purchase them weekly and 11% daily (numbers that rise sharply among younger consumers — notably Millennials).
Several motivations behind the purchase of organics were active prior to COVID-19 but were certainly accentuated by the effects of the pandemic itself, which fanned consumer interest in foods and beverages with premium properties viewed as helping to boost immunity, resilience and general wellness, notably the notion that organics are free from harmful pesticides, chemicals and/or GMOs.
The free-from health and safety associations consumers hold with organics continued to be compelling purchase motivations during the pandemic. Perceptions of health and safety are top reasons why consumers choose to purchase organics, a close parallel to concerns for general hygiene that peaked during 2020. Many consumers also identify organic to be a marker of a quality product that tastes better and fulfills nutritional needs.
In terms of their awareness and avoidance of genetically modified foods and beverages, consumers’ attitudes toward GMOs reflect a much broader shift in food culture — today’s consumers aspire to eating food that is closer to its natural form and less changed by human manipulation — sentiments that have been undoubtedly reinforced during the pandemic.
Our Organic and Beyond report found that awareness of GMOs was near universal pre-pandemic, with 43% of consumers saying that they actively avoid them and 45% of consumers believing the term "organic" promises GMO-free. While many consumers are unclear on whether GMOs are allowed in organic foods, as they start to hear about newer technologies related to GMOs, such as gene editing, consumers continue to demand transparency around all such methods.
Organic remains one of the most prominent and significant markers of quality in foods and beverages in the U.S. today. In recent years, we have witnessed the advance of organic products into new categories even as organic foods and beverages become more affordable to the mainstream American consumer.
During the pandemic, as consumers ramped up in-home cooking and eating, splurges in spending on premium organic products were seen as one way of elevating in-home dining experiences, especially since spending on restaurants meals had declined precipitously (a situation now undergoing significant change).
Since they represent a unique intersection of perceptions of quality and value, organic private label products have also been particularly popular during the pandemic: Expectations for organic at retail have been shaped by the now-widespread availability of organic across most channels as well as the proliferation of retailers’ organic private brands across the store. Organic private label is increasingly available in the center aisles that house categories further down consumers’ adoption pathway of organic items.
Critically for both retailers and organic manufacturers, trust in retailers’ organic private brands is quite high. A great majority of consumers (83%) agree that organic private brands are just as good as national organic brands, and trust in retailers’ organic private brands is comparable to consumer trust in national organic brands (for example, 53% of consumers say they trust organic brands from conventional grocers either completely or for the most part). Retailers continue to expand organic private label to new categories, and their greater affordability is appreciated by shoppers. Still, price remains the most significant barrier to purchasing more organic products for many consumers.
Going forward, while organics enjoy great popularity, and while many consumers today interpret the organic seal as signaling the epitome of quality, a growing core of more engaged organic consumers are starting to demand more as they look for assurances in farming and production cues that go beyond organic. While health and wellness motivations continue to be central drivers of organic purchasing, connections to sustainability have thus been emerging as another key driver — particularly in terms of forward-looking trends, notably under the rubric of regenerative agriculture and connections to soil health.
How are private label organics currently perceived and what’s the forecast for demand going forward? To find out, we are currently investigating the relevance and popularity of both national and private label brands in our Brand Ambition study. Information relating to consumer perceptions of regenerative agriculture will be included in a forthcoming update of our long-running Sustainability reports. For more information on either, contact: firstname.lastname@example.org.