Organics Drive California Produce Growth

From 2013 to 2017, produce sales at retail in California supermarkets grew by about $1.2 billion to a total of $7.3 billion, with sales in the organic category accounting for about 27 percent of that growth. 

Overall, organic produce constituted more than 11 percent of total produce sales at the retail level in 2017, compared to about a seven  percent contribution in 2013.  Total organic produce sales in California supermarkets in 2017 was $768 million dollars compared to $453 million in 2013.

These impressive numbers were delivered by Steven Muro, president of Fusion Marketing, in a webinar given to Fresh Produce & Floral Council members on March 8.  For the past five years, Fusion has been tracking produce sales in the top five California markets for FPFC members.  The goal is to give members a benchmark by which to judge their own success.

Muro said it is clear that organic produce is one of the main growth drivers in the produce category as incremental growth far outdistances total sales.  Looking at it another way, he noted that total produce sales in the five years studied shows that total retail produce sales in the Golden State increased 19 percent from $6.1 billion to $7.3 billion. 

According to Muro, just as impressive is that the price per pound consumers are paying for organic produce has continued to rise even as supply has increased.  He said that means demand for organic fresh produce is increasing at a faster clip than supply.  The gap between conventional and organic produce has narrowed a bit,  largely because conventional produce has seen its price per pound increase by a healthy percentage.

 In 2013, the average price per pound California consumers paid for organic produce was $2.83.  In 2017, organic produce sold on average for $2.91 per pound.  By comparison, in 2013, on average, conventional produce was priced at $1.35, which increased by 15 percent by 2017 to $1.55 per pound.  The price differential between the two produce categories has gone from $1.48 per pound in 2013 to $1.36 per pound in 2017. 

The good news for organic shoppers is that they no longer are paying double to buy organic produce.  As that price gap narrows, organic produce sellers should even find more customers in California.

The FPFC Market Report also found that the top selling organic vegetable in terms of dollars in California is lettuce, followed by spinach and carrots.  On the fruit side, berries outdistance the rest with apples and bananas getting the silver and bronze medals respectively.