Consumer Demand for Organic Food Market Projected to Reach $272.18 Billion by 2027

By Thomas Price | Friday, November 6, 2020 | Food & Beverage, Finance

As the world shifts toward healthier lifestyles and higher awareness for food products, the market has shifted with it. Consumers have been making significant choices when selecting what to eat. This particular trend has led to a significant rise within the organic food market. The growth of the organic food market comes from the incredible double-digit increase in consumer demand over the past few years, which has resulted in extremely large projections of where the market may be in the future as analysts measure global demand and current revenue. While there has been slight uncertainty in 2020 due to the ongoing COVID-19 pandemic, the long-term success and growth of the organic food market seems set.

Organic food aisle at a supermarket.

The Popularity of Organic Foods

The demand and revenues for organic food have been consistently growing over the past few years, leading to rather consistently high annual growth rates and revenues. In 2018, the United States organic food sales topped $47.9 billion — a promising 5.9% growth over the previous year’s overall sales. As impressive as this was, the following year topped it with sales crossing over major milestones to reach $55.1 billion. This was another year of an over 5% increase, clocking in at precisely 5% annual growth year over year. Organic food sales in the United States have seen tremendous growth in the last decade, with sales in 2010 only reaching $24.9 billion. Since then, annual sales in the US have over doubled in just ten years.

This trend of increased popularity is on the global forefront as well. In 2018, global sales of organic food topped $100 billion, a major milestone for the burgeoning industry. While the sales are still extremely concentrated between North America and Europe, who hold a 90% share of sales, the rest of the world is slowly growing the market as well. In fact, the 90% share is down from 2017, where North America and Europe held an oppressive 97% of global organic food sales. Countries like China, Japan, and India have seen growth over the previous few years, suggesting that organic food will become larger in those regions if the trend continues into the near future. Brazil has also seen growth in the organic food market that is expected to continue.

Even during 2020, which saw decreased sales for many different markets due to the pandemic, organic food maintained solid sales through the use of online revenues. While there was a certain dip in the market, especially due to the different issues with crossing borders and how much shipping is involved, multiple retailers saw growth in digital sales. Companies like Abel & Cole and Nourish Organic saw online sales rise by 25% and 30%, respectively.

Expected Growth for the Organic Food Market

New market research suggests incredible growth by the organic food market over the next seven years as the current positive trends seem likely to continue, even with the dip in 2020. In fact, the organic food market is expected to reach a global value of $272.18 billion by the year 2027. This translates to an average compound annual growth rate of 12.2% over these next seven years. The growth and estimates are based on the growing consumer demand, as well as the support from government and non-government organizations. A major point of sale for organic foods comes from fruits and vegetables, which account for 38.9% of all global organic food sales. This is followed by frozen and processed foods, with 28% of global sales. Dairy products account for 22.2% of sales, with all other different products making up less than 20% per type of product. The largest retailer of organic food in the United States is Whole Foods, followed by Earth’s Best, Organic Valley, and Horizon Organic.

Final Conclusions

Like many different industries in 2020, the organic food market was hit hard by the global pandemic. With that being said, this year is not expected to drastically slow down the rapid growth of the market as a whole. Considering the annual growth up to this point, especially in the United States, the positive trend looks likely to continue. Especially with the rest of the globe outside of North America and Europe still having a relatively small share of the market, the room for expansion in Asia and South America looks even more promising. China, India, and Brazil look specifically primed to see an explosion of organic food sales in the coming years. Organic food has seen unbelievable popularity over the last ten years. As consumers continue to become more health-conscious and environmentally aware, having the industry reach $272.18 billion by 2027 feels more than likely to occur.

About the Author

Headshot of Thomas Price

Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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