Natural and Organic Products

term “natural,” although it’s generally understood to mean that nothing artificial or synthetic has been added to a food that wouldn’t be expected to be there). There’s no doubt, however, that these items received a huge lift during the pandemic, when shoppers couldn’t always find

Ups and Downs for Organic Produce

Sales of organic fresh produce grew by 3% to top $9.4 billion in 2022, but volume declined by 3.7%, according to the “2022 Organic Produce Performance Report” from Monterey, Calif.-based Organic Produce Network and Idaho Falls, Idaho-based consultancy Category Partners. Ups and downs like this are to be expected during an inflationary period, even for conventional produce, explains Category Partners President Tom Barnes.

He notes that the average conventional price per pound grew by 9.2% compared with 2021, while organic produce price per pound rose by 7%. Yet organic fresh produce prices in aggregate remain substantially higher than conventional, with 2022 showing the price gap between conventional and organics as the largest it has been in the past four years ($1.55 per pound).

“With rising prices, we may see more selective organic shopping from consumers as they substitute higher-priced organic items for conventional ones,” observes Barnes.

Organic apples were the biggest example of substitution last year, as their price per pound increased by more than double the amount of conventional, resulting in a volume decline of 10.3%.

The organic fresh berry category fared the best sales-wise in 2022, holding more than 16% of organic fresh produce dollars, followed by organic packaged salads as a close second. Organic grapes had a stellar year, with a 6.9% increase in volume and an 8.3% increase in sales. Overall, organic fresh produce made up 12% of all fresh produce sales and accounted for 7% of all fresh produce volume.

Four-Year Performance

Source: "2022 Organic Produce Performance Report," published by Organic Produce Network and Category Partners conventional products at their regular stores, and in some cases opted to purchase things like recycled toilet paper and organic milk, which maybe they hadn’t done before.

In 2021, organic sales experienced steady yet more stable growth, with a $1.4 billion or 2% lift over the previous year. Total sales surpassed $63 billion, according to the Organic Trade Association’s 2022 Organic Industry Survey, the most recent report available. Food sales for 2021, which comprise more than 90% of organic sales, rose to $57.5 billion (roughly 2% growth), while nonfood sales reached $6 billion in sales, accounting for 7% growth.

Katie Macarelli, manager of public relations at Lakewood, Colo.-based Vitamin Cottage Natural Food Markets, which operates 166 Natural Grocers stores in 21 states, says that while the retailer definitely picked up new shoppers during the pandemic, people have continued to come in during a time of high inflation because of the stores’ affordable prices. “We’ve done really well in the past year in maintaining our commitment to affordability in light of inflation and heavily subsidizing things like eggs,” she notes.

In fact, in recent months, when local news stations came by to record footage of Natural Grocers stores with empty egg cases, Macarelli made sure reporters knew that the shortage was due to their low prices, not because of avian flu. The company’s base standard is $3.50 for a dozen free-range eggs.

In addition to offering “always affordable pricing,” Natural Grocers has a free loyalty program called {N} power, which offers members additional discounts and free products.

In Macarelli’s view, younger consumers in particular are demanding more information about where their food comes from and how it’s produced, and this is helping to drive sales of natural and organic products. This demographic cares whether there are chemicals not only in their food, but also in their shampoo and other nonfood products, she observes. Natural Grocers has taken on the mission of educating shoppers on these issues and spotlighting the high standards it adheres to when selecting vendors. “We proudly share information, but not in a pretentious way,” Macarelli adds, “because none of this matters if people can’t afford it.”

The retailer relies on a monthly magazine, knowledgeable store staff, and creative social media outreach, including TikTok videos to instruct and serve its shoppers. Natural Grocers is also among the few retailers to offer free, on-site nutritional educational coaching. “Anyone who walks in and wants more nutritional guidance — whether it be an athlete preparing for their first Ironman, someone with a recent cancer diagnosis, or a parent whose child has multiple food allergies — can get counseling on the spot or can make an appointment for an hour-long session with a certified nutritional health coach,” explains Macarelli.

Natural Grocers features several special promotional periods throughout the year to create excitement among its shoppers. Earth Day on April 22 is always a big event — in fact, the retailer celebrates the occasion throughout the entire month of April. Then, in September, stores