Organic Producers Faring Well Despite Upheaval of Food Supply Chain

Brian German Agri-Business, Industry

Organic producers appear to be doing well in navigating the disruption in the food supply chain caused by COVID-19.  A report that was released by the Organic Produce Network (OPN) and Category Partners shows that sales of organic fresh produce experienced a 22 percent increase in the month of March.  The entire first quarter of 2020 saw an eight percent increase in sales over 2019.

Organic producers

“Organics has weathered the initial part of the coronavirus buying panic spree that we saw primarily in March,” said Matt Seeley, OPN co-founder and CEO.  “That grocery channel was very, very active in the first quarter.  There was not a lot of foodservice or institutional buying.  Grocery was the main destination for consumers to pick up organic and that was reflected in the sales data.”

The 2020 Q1 Organic Produce Performance Report shows that sales volumes of organic fruits and vegetables grew by 10 percent.  The report notes that retail conditions created by pandemic concerns are unprecedented in grocery retailing.  Conventional volume and sales numbers were similar to organic but to a lesser extent.  It will be difficult to forecast how produce sales will be affected in the coming months due to COVID-19 uncertainty.

“As we listen to what state and local authorities are talking about is when we return to ‘normal’ and restaurants slowly start to open back up, we will probably see some change,” Seeley noted. “But by and large, right now, grocery is a very, very strong area and we expect that to continue probably through the end of this year.”

Organic producers have been managing a bit better than some conventional growers in light of the major market shift.  The shelter in place orders have caused a sharp decline in demand from traditionally large buyers of produce. Seeley noted that the foodservice industry and some of the institutional markets such as schools are areas where organic is still working to make inroads.  The organic sector’s main driver has typically been retail outlets, allowing the industry to avoid some of the challenges many conventional growers are working through.  

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Brian German

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Ag News Director, AgNet West