Significant Growth of the Organic Sector and Its Future Potential

Brian GermanAgri-Business, Industry

Over the past 30 years, the organic sector has experienced significant growth. Once a small, niche segment within the overall agricultural industry, organic production has expanded substantially. CEO of JV Smith Companies, Vic Smith explained that he has seen the blossoming of organics firsthand.

“I could actually go back to that era of 1995 to 2000 and it was just a very isolated deal and not a lot of volume; not a lot of knowledge,” said Smith. “We were out there looking for information. It was a lot of small, independent growers.”

Demand for organic products was there during that time, but availability and shelf space in grocery stores were rather limited. Smith explained that competition among retailers helped to push the growth of organic, with retailers vying for market share of the organic produce demand. What began with specialty markets gave way to some of the biggest retail chains in the U.S. expanding their organic offerings.  The increased demand for organic among retailers motivated producers to become more innovative and effective. “We as producers had to get better. We had to understand how to bring things to the table but get the unit cost down to a point where it could be sold on the shelves of supermarkets,” said Smith.

Even with the tremendous growth of production and shelf space for organic, there is still quite a bit of growth potential. The organic sector has proven to be supported by increasingly strong demand, with sales value and volume continuing to increase over the past two years. As more younger consumers begin to become the decision-makers in households, there is an expectation that the positive momentum will continue.

“I think with these generations being more in tune with the nutritional value of organic and also the environmental impact of organic, I think we’re going to see more demand,” said Kristen Smith Eshaya, VP of Organizational Development at JV Smith Companies. “Also, these generations are willing to pay that premium to have that better contribution on the environment and on their health. And I think we’re going to see some growth in that as these generations become the main buyers.”

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Brian German

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Ag News Director, AgNet West