While the organic fresh produce industry is certainly not exempt from inflation, the overall market is still showing strong growth in the USA. Every organic category is performing differently, though. This was one of the conclusions from an expert session at the Organic Produce Summit in Monterey in July. “We’re seeing the largest price gap between conventional and organic in less-established markets like melon,” states David Perie, Account Manager at Rijk Zwaan USA.
As part of the Organic Produce Summit 2022 educational programme, Tom Barnes, CEO of Category Partners, and Richard Gonzales, Vice President of Global Produce Sourcing for Walmart, discussed with moderator Kevin Coupe, founder of Morning News Beat, how to adapt and grow in the era of inflation.
Organic sales account for US$2.4 billion
Barnes kicked off the educational session with Q2 2022 data from Nielsen showing that organic produce sales stood at US$2.4 billion, up 3.7% from the same period last year. “If we look at the five-year comparison in dollars from Q2 2018 to present, we’re trending up. However, the volume is trending down over that five-year period, with conventional off 2% and organics down 2.8%,” said Barnes.
Organic tomatoes 20% up
Barnes explained that it was important to note that every organic category is performing differently. For example, organic apples were down 10% year on year, while conventional apples were up 3.1%. Meanwhile, organic tomatoes were up almost 20% year on year for Q2, whereas their conventional counterparts were only up 0.3%.
Larger price gap in specialty items
This upward trend is good news, according to Rijk Zwaan’s David Perie. He is optimistic about the organic market but recognises the differences in the categories: “The ‘organic versus conventional’ price gap is getting narrower for crops like cucumber, lettuce and tomato. This gap is staying larger in specialty items and ones that don’t have an established market, like melon.”
Online growth and three main drivers
Perie is aware of the importance of the digital trend in the future growth of organic fruit and vegetables. “It can be a bit of a struggle to merchandise online. Buyers can’t see, touch and taste new products. This really affects impulse produce purchases. How can we translate this experience to online? In my opinion, there are three main drivers for Generation Z consumers – people born between 1990 and 2010. These drivers are item value, health and representation of the consumer’s core values. It is our mission to help our customers respond to these drivers with inspiring organic fruit and vegetables.”
Tomatoes, lettuces, melons and cucumbers
In the US market, the Rijk Zwaan team helps customers with a wide assortment of varieties for organic cultivation and a strong package of natural resistances – varieties that match today’s markets. “We still have a large focus on organic lettuces and tomatoes. Demand is growing for items like melons and cucumbers. Anything that can be done organically is interesting in today’s market. Nevertheless, cost does play a large factor for new items.”
Besides the focus on market developments during the Organic Produce Summit, there was also considerable discussion about regenerative agriculture, including two expert sessions titled ‘Is Regenerative the New Organic?’. Moderator Shelby Layne, director of environmental social governance at Bolthouse Farms, called regenerative agriculture “soil-first farming”. It is a system of principles and practices that seek to rehabilitate and enhance the entire ecosystem of the farm by placing a heavy premium on soil health and also paying attention to water management, fertiliser use and more. Regenerative agriculture goes above and beyond today’s organic standards to actively regenerate the natural resources used while actively supporting healthy, thriving communities.
‘New organic’ and ‘new conventional’
Eric Morgan, VP of environmental science and resources at Braga Fresh Family Farms, shared insights into a series of regenerative agriculture trials with a focus on tillage. “The practices and principles of regenerative agriculture will be essential in all markets if we are going to be sustainable. Our consumers want it; they’re different than they were 30 years ago. Is it the ‘new organic’? Yes, and its elements will be the ‘new conventional’, too. This is necessary in order to survive,” he said.
To read more about the Organic Produce Summit, check https://www.organicproducesummit.com