Premium Essay

Growth Patterns in the U.S. Organic Industry

In: Business and Management

Submitted By yelia
Words 1431
Pages 6
United States Department of Agriculture
Economic Research Service

Growth Patterns in the U.S. Organic Industry by Catherine Greene

U.S. consumer demand for organically produced goods has grown continuously since USDA established national standards for organic production and processing in 2002. And, while Americans economized on their food purchases during the 2007-09 recession, including purchases of organic products, growth in demand for organic products rebounded quickly following the recession. Industry analysts estimate that U.S. organic food sales were $28 billion in 2012 (over 4 percent of total at-home food sales), up 11 percent from 2011. USDA has begun organic regulation of nonfood agricultural products—for example, laundry detergent with organic coconut oil, aloe vera, and other ingredients—which accounted for another $2.2 billion in organic sales in
2011, according to the Organic Trade Association.
Although USDA does not maintain official statistics on U.S. organic food sales, industry data suggest that the market share of organic sales held by various food categories has been remarkably stable over the last decade. Produce (fruits and vegetables) and dairy are still the top two organic food categories, accounting for
43 and 15 percent of total organic sales in 2012; their standing has been relatively unchanged in recent years. Packaged foods, beverages (including soymilk), and breads/grains have 9-11 percent market shares, down slightly from a decade ago. The meat, fish, and poultry category, which is dominated by poultry sales, gained the most over the last decade but still represents just 3 percent of total organic sales.

U.S. Certified Organic Acreage Rebounded in 2011
USDA set a uniform organic standard in 2000 to provide consumer assurance, and farmers with organic sales over $5,000 in a given year must obtain independent…...

Similar Documents

Premium Essay

Whole Foods Analysis

...the trends in retailing of organic foods and the impact of these trends on Whole Foods Market Organic Foods now occupy prominent shelf space in the produce and diary aisles of most mainstream U.S food retailers. Retail sales of organic foods have increased from $3.6 billion in 1997 to $21.1 billion in 2008. Whole Foods Market which is the world’s largest retail chain of natural and organic foods was founded in 1980. The company has stores in the U.S, Canada, and Great Britain with sales of $12 billion for year ending 2010. Among the trends impacting in the retailing of organic foods is the inclusion of organic products by mainstream supermarkets such as Wal-Mart, Kroger, Publix, Safeway and Save-a-Lot. In addition, stores such as Harris Teeter have introduced their own private-label brands of organics. The impact of this trend on the operations of Whole Foods is loss of customers and profit. As demand for organic foods increased, mainstream supermarkets would continue to expand their offering and selections. (Thompson, Strickland, & Gamble, 2009) Most of these supermarkets will leverage on their wide network of stores dotted all over the United States. Wal-Mart and Krogger had 2,297 and 2,477 stores respectively, as against 188 stores by Whole Foods for year ending 2006. Customers will therefore be attracted to the mainstream stores due to convenience and the fact that they have now become one-stop-shops. Secondly, retailing of organic products is experiencing......

Words: 1598 - Pages: 7

Premium Essay

Management Styles: American Vis-a-Vis Japanese

...Japan and the U.S. share a low-growth economy configeration and their management styles are beginning to merge. Management Styles: American vis-a-vis Japanese Charles Y. Yang THE JAPANESE STYLE of management has in recent vears been drawing a great deal of attention from American managers because of its apparent ability to insure organization stability in the face of unexpected external changes. At the same time, a slower rate of economic growth in Japan is compelling Japanese executives to .search for improvement iu management efficiency by focusing their attention on the American type of management. FALL 1977 This trend to draw on each other's strengths in order to better cope with growing external pressures is significant because both eountries now share a similar socio-economic situation characterized by a low rate of economic growth, a high degree of vulnerability to external variations and an advanced stage of technological development. A comparative analysis of the quality of management must first determine what is to be measured. 23 If the criterion is profit performance, most of the major Japanese companies compare favorably with leading American firms, and that is where the comparison ends. What is more meaningful is to measure the extent to which the underlying factors have contributed to profit perfonnance in the past, and how they will continue to function in the new socio-economic setting. These underlying factors consist of......

Words: 4413 - Pages: 18

Premium Essay

Grocery Story Industry Analysis

...Groceries, Supermarkets, and Beyond: The Food Retail Industry John Abbott Samia Bagdady Kate deLima Casey Gavin MBA AF601: Economics for Managers Spring 2010 HISTORY The food industry has developed more structural specialization and diversity than probably any other industrial sector. Food moves from producer to consumer through many channels such as direct sale at the farm, heavily advertised brands in supermarkets, generic or store brands, through convenience stores and other institutional feeders. With great changes in American lifestyles since food delivery became industrialized, there have been significant shifts have taken place among these channels as well as profound changes within each. Therefore, the U.S. food system has experienced rapid development and has responded to periods of rapid economic growth, technical change, changes in household structure, rising consumer income and changing public policy. Its institutional structure has been transformed repeatedly. It has been subjected to periods of intense public scrutiny that have shaped much of the public policy that guides and constrains its conduct and performance. This large economic sector is affected by many forces, from Many influences or forces which affect this large economic sector. The list of interactive factors spans from basic agricultural commodity supply and demand situations to final consumer preferences (Padberg & Rogers, 1987). Over the...

Words: 7280 - Pages: 30

Premium Essay

Whole Food

...Summary – Whole Foods Strategic Audit Whole Foods Market competes successfully within the organic/natural foods industry, having enjoyed close to 19% growth over the past five years. As a point of comparison, Kroger – a traditional supermarket operator – only grew 4%. On a larger scale, the organic food retail industry in the U.S. has fared well in the last decade. Reported sales grew 23.4%, which is much more than the 3.3% growth of the overall food industry during the same time period. However, a recent announcement from a Whole Foods competitor recently sparked considerable buzz in the industry and put a mild dent in Whole Foods Market stock price. The announcement came from the industry giant Wal-Mart who unveiled its plan to more than double its organic offerings and begin marketing to more upscale clientele, many of who currently shop at Whole Foods. Wal-Mart is well known for squeezing supplier margins to bring “everyday low prices” to consumers. As the industry leader in several retail categories, including traditional grocery sales, Wal-Mart has the size and influence to significantly impact the organic food landscape if it dedicates itself to the market. Although Wal-Mart’s impact on the natural niche remains to be seen, it’s critical that Whole Foods review its strategy in light of Wal-Mart’s entry. Whole Foods’ advantage comes from offering both high quality and a wide variety of organic products. It also excels at delivering an inviting shopping experience for......

Words: 9554 - Pages: 39

Premium Essay

Whole Foods

...pay a premium for the higher quality of organic and natural food. Sociocultural Segment The socioculturalsegment is relevant to Whole Foods because of the importance of the society’s attitude and cultural values. Whole Foods is well known for its organic products and the society’s perception that organic food is beneficial to health is important for its sales growth. As the number of health-conscious residents increase, the demand for Whole Foods’ products will rise because people are concern with their diet and increasing their life expectancy by consuming more organic food. Besides, there has been an aversion towards non-organic foods because of its pesticides and artificial chemical treatment. Consumers view them as less pure and safe for consumption and are gradually switching to organic food. This change in customer perception will create an expansion opportunity for Whole Foods Business. Another social trend is the increase in protection of animal rights. The public at large are placing heavy emphasis on animal protection and demanding ethical business practices from firms. Such issues are critical for Whole Foods because of their fresh meat and poultry produce. Economic Segment The economic segment is relevant because Whole Foods products are priced higher than its competitors. In an event of an economic downturn, this may affect Whole Foods products unfavorably if consumers decide to switch to competitors which offer organic food at lower prices (eg. Traders’......

Words: 2795 - Pages: 12

Premium Essay

Avon

...AVON -STUDY CASE- Analiza contextului global al afacerilor prin prisma factorilor de impact asupra industriei cosmeticelor The cosmetic industry is one of which products tend to be countercyclical. Demand for such products normally remains constant and unaffected by economic distress. The color cosmetics are predicted to see a slowdown in volume demand. A growing trend in the cosmetic industry is the introduction of ‘green’ products. More than one in seven (16%) of global beauty products launched in 2008 were certified organic, ethical or natural. There are concerns that the global economic climate will stifle new product development, innovation and sustainability programs in 2009. An economic slowdown usually curbs companies from investing in research and development and it is that research that has brought forth a wealth of green cosmetics. For example, retailers such as Wal-Mart are increasingly requiring more ecofriendly supply chain. There are forecasts that consumers are unlikely to give up their commitments to organic products just to save a few pennies. 68% of consumers will remain loyal to a company that has a social and environmental commitment. Many consumers are now ‘voting with dollars’ for organic products and supporting brands that support values similar to their own. Economic factors mainly affect the purchasing power of customers. The more customer demand for the product the more profit to the organization, at the same time if there is no customers......

Words: 5529 - Pages: 23

Free Essay

Home

...implementation into the restaurant and hospital markets. There are currently 19,362 restaurants in the Northwest, followed by health care services, which includes 23,108 organizations in the Northwest. Industry Analysis The Industrial and Institutional soap industry, of which we are a part, is quite fragmented, but contains several well known main competitors: Gojo, Kimberley Clark, Dial, Provon, and SoftSoap, as well as generic brands that provide to distributors like Massco and Sysco. The industry is stable and growing; between 1998 and 2003 it grew by an average of 4% annually. Within the I&I sector there is fierce competition for market share among the existing popular soap offerings, leading to lean profits on soap sales. Distribution Patterns Distribution in the soap industry is provided by regional providers. These distribution companies usually serve a large portion of the market based on the respective size of the market, delivering to the organizations monthly or bi-monthly depending on demand and usage patterns. Food services typically receive deliveries of cleaning products once a month. Hospitals typically have a distribution system that operates on monthly deliveries of large quantities. Restaurants typically have a weekly delivery schedule. Competition and Buying Patterns Commercial customers select soap based on the necessary minimum safety regulations for the intended user; restaurant and hospital regulations require anti-bacterial/microbial. Customers......

Words: 1629 - Pages: 7

Premium Essay

Organisational Structure

...geographic dispersion of its facilities; and the range of its businesses (the degree to which it is diversified across markets). There are multiple structural variations that organizations can take on, but there are a few basic principles that apply and a small number of common patterns. The following sections explain these patterns and provide the historical context from which some of them arose. The first section addresses organizational structure in the twentieth century. The second section provides additional details of traditional, vertically-arranged organizational structures. This is followed by descriptions of several alternate organizational structures including those arranged by product, function, and geographical or product markets. Next is a discussion of combination structures, or matrix organizations. The discussion concludes by addressing emerging and potential future organizational structures. ORGANIZATIONAL STRUCTURE DURING THE TWENTIETH CENTURY Understanding the historical context from which some of today's organizational structures have developed helps to explain why some structures are the way they are. For instance, why are the old, but still operational steel mills such as U.S. Steel and Bethlehem Steel structured using vertical hierarchies? Why are newer steel mini-mills such as Chaparral Steel structured more horizontally, capitalizing on the innovativeness of their employees? Part of the reason, as this section discusses, is that organizational......

Words: 3537 - Pages: 15

Premium Essay

Marketplace Analysis of Whole Foods

...Whole Foods must maintain alignment with that core philosophy. Created in response to the lack of organic and natural options of the traditional grocery stores and chains Whole Foods has grown from its origins in a three story house in Austin to the multi-billion dollar enterprise it is today without sacrificing this core value (Harrison, 2014). This is very important: The continued development and growth of Whole Foods must maintain this core philosophy. The platform for value creation is rooted in market share growth and consistent and well defined organizational philosophy (Deshpande, R. & Webster, F. 1989). Keeping Whole Food’s core philosophy in mind, strategy for growth of the business and recapturing of market share are the primary goals of this analysis. The supermarket and “other grocery” markets within the United States continues to rise year over year. The increase in sales numbers between 2013 and 2014 was 3.6% or approximately $19.74 billion. This is a significant amount of increased spending and shows potential opportunity for market growth. The following graph indicates the steady growth pattern in the grocery market, with the only flat areas existing after the terrorist attacks on September 11, 2001 and following the economic recession and housing market collapse which began in December of 2007. (Statista, 2015) Additional market data to be considered is the growth of “natural product” sales within these figures. The change in sales of “natural......

Words: 3557 - Pages: 15

Premium Essay

Good

...* TABLE OF CONTENTS A. EXECUTIVE SUMMARY 2 B. BUSINESS DESCRIPTION – AN ORGANIC OPPORUNITY 4 Introduction 4 Product 4 Groundwork forthe Venture 4 Crops to be grown 5 The Opportunity 6 Our community 7 Land Use, (re)connecting to `aina (land) 7 C. INDUSTRY AND MARKET ANALYSIS 9 Growth in the organic industry 9 The Hawai`i market 9 local competition 11 Offshore organic competition 12 Farming in Hawai`i 12 Customer profile 13 Distribution mechanisms 15 D. MARKETING PLAN 16 Promotions and outreach 16 Specific segment stratigies 17 MA`O customer service philosophy 17 Promotional materials and labeling 18 Pricing 18 Distribution 19 Sales management 19 Competitive advantage 19 E. MANAGEMENT PLAN 20 Organization and board 20 Governance 20 MA`O’s position in WCRC 21 Executive management & Staffing plan 22 Cooperating experts 22 F. Operations Plan 23 Farm plan 23 Research and development 23 Crop growth 23 Harvest and quality control 24 Inventory management 24 Organic certification 24 Farmer’s markets 24 Land, Equipment, Office Space, Tools, Resources 25 Increasing youth capacity 25 G. FINANCIAL PLAN 26 Start-up 26 Accounting system & Business controls 26 Long-term sustinability 26 Proforma statements 26 H. Risk ASSESSMENT & CONTINGENCY PLAN 35 I. ENDNOTES 36 EXECUTIVE SUMMARY Leaders must deal with apathy along the Leeward Coast (Wai`anae), perhaps it comes from poverty...

Words: 10972 - Pages: 44

Premium Essay

Air and Water Pollution Paper

...Air and Water Pollution Paper Since the industry revolution, environmental pollution has gradually become a global problem. It looks set to hog the limelight in this century. Almost all the countries suffer from such problem and are struggling to keep their heads over the water. This essay will cover two types of air pollutants and two water pollutants that affect our health. Air: (Indicate whether the selected air pollutants are considered primary or secondary pollutants. Be sure to explain why they are considered to be primary or secondary, and discuss the sources of these pollutants) (Examine the selected water pollutants. Discuss the sources of these pollutants, and indicate the impact of these pollutants on water resources and aquatic life) Air pollution is something in the air that causes harm to humans or the environment. There are many different forms of air pollutants and these are broken down further into primary and secondary pollutants. A primary pollutant is something that stems directly from a source such as volcanic ash or vehicle emissions. A secondary pollutant forms when two pollutants react in the atmosphere such as acid rain. Most air pollution comes from one human activity: burning fossil fuels, natural gas, coal, and oil to power industrial processes and motor vehicles. Among the harmful chemical compounds this burning puts into the atmosphere are carbon dioxide, carbon monoxide, nitrogen oxides, sulfur dioxide, and tiny solid particles......

Words: 1252 - Pages: 6

Premium Essay

Strategic Business Plans

...and the range of its businesses (the degree to which it is diversified across markets). DEVELOPMENT OF THE TRADITIONAL ORGANIZATIONAL STRUCTURE Understanding the historical context from which some of today's dominant organizational structures have developed helps to explain why some structures are the way they are. For instance, why are the old, but still operational steel mills such as U.S. Steel and Bethlehem Steel structured using vertical hierarchies? Why are newer steel mini-mills such as Chaparral Steel structured more horizontally, capitalizing on the innovativeness of their employees? Part of the reason, as this section discusses, is that organizational structure has a certain inertia—the idea borrowed from physics and chemistry that something in motion tends to continue on that same path. Changing an organization's structure is a daunting managerial task, and the immensity of such a project is at least partly responsible for why organizational structures change infrequently. At the beginning of the twentieth century the United States business sector was thriving. Industry was shifting from job-shop manufacturing to mass production, and thinkers like Frederick Taylor in the United States and Henri Fayol in France studied the new systems and developed principles to determine how to structure organizations for the greatest efficiency and productivity, which in their view was very much like a machine. Even before this, German sociologist and engineer Max Weber......

Words: 3640 - Pages: 15

Premium Essay

No Boohoos

...Financial Services Practice Journey III: The Next Frontier in Property and Casualty Insurance The Challenge of Profitable Growth Journey III: The Next Frontier in Property and Casualty Insurance The Challenge of Profitable Growth Contents Introduction Dramatic improvement and a paradigm shift 1 A Paradigm Shift The exit of undisciplined capacity Strengthened risk management skills Stronger foundational pillars The Implications The risk journey continues – with profitable growth as the new frontier 7 9 10 13 17 Continuous improvement of risk management Growing profitably in a competitive industry Lessons and barriers Levers to drive growth Upgrading the foundational pillars Conclusion Looking forward 17 21 28 38 43 Journey III: The Next Frontier in Property and Casualty Insurance The Challenge of Profitable Growth 1 Introduction Dramatic improvement and a paradigm shift In our first Journey report, covering 1979 to 1993, we reached three main conclusions about performance in the property and casualty insurance industry: 1. Risk management is the primary driver of success, not investment performance, expense management or financial leverage. We suggested that risk management had four components: enterprise risk management, capital management, product market management, and transaction excellence. 2. Performance is remarkably consistent and selfreinforcing. Winners keep winning, while persistent underperformers tend to be......

Words: 9941 - Pages: 40

Premium Essay

Dr. Pepper Snapple Group Case Study

...company’s goal and core values. Also, it highlights DPS’ interest in future sales growth. The company includes its business strategy stating that it focuses on building and enhancing leading brands, pursuing profitable channels, packages and categories, leveraging an integrated business model, strengthening routes to markets, and improving operating efficiency (Dr. Pepper Snapple Group). External Analysis Government policies and regulations affect business development and growth. Products have to be consistent with the USDA’s dietary guidelines and adhere to the FDA’s standards for health claims. Due to the current post-recession economy, growth is expected to be slow since existing demand patterns are expected to change as consumers become more health conscious. Moreover, global awareness and concern regarding the impact of climate change continues to be a focal point as business seek to achieve better business in terms of reduced cost and risk while achieving positive impact on the world around them. Also, an important trend in the macro environment is globalization. With the growing use of electronic technological innovations, global communication is rapidly increasing. This allows firms to collaborate within the country market and expand internationally into world markets. (Hoovers) Industrial Analysis Dr. Pepper Snapple Group competes in the U.S. beverage manufacture and bottling industry which is composed of about 3,000 companies including manufacturers,......

Words: 1991 - Pages: 8

Premium Essay

A Study of the European Cosmetics Industry

...European Cosmetics Industry Executive Summary Prepared for: European Commission, Directorate General for Enterprise and Industry Prepared by: Global Insight, Inc. November 2007 Executive Summary - November 2007 Contact Information Emilio Rossi Managing Director Business Planning Solutions, Europe Global Insight, (Italy) srl. Via S. Maria Segreta 6 20123 Milan +3902 8648 130 emilio.rossi@globalinsight.com Antonia Prlic Principal 1 Adelaide Street East Suite 2505, P.O. Box 198 Toronto, Ontario, M5C 2V9 Canada +1 416 682-7312 antonia.prlic@globalinsight.com Robert Hoffman Senior Consultant 1 Adelaide Street East Suite 2505, P.O. Box 198 Toronto, Ontario, M5C 2V9 Canada +1 416 682-7311 robert.hoffman@globalinsight.com Executive Summary - November 2007 I. Broad Market Study An overview of the broad cosmetics industry (also referred to as the cosmetics and toiletries (C&T) industry) in the EU, Japan, China, and the U.S. reveals that Europe's market size is almost as large as the U.S. and Japan combined, due to its large population. In 2006, the U.S. cosmetics market was €38.2 billion, while Japan's was €23.7 billion and China's €8.2 billion. The total EU27 cosmetics market was valued at €63.5 billion in 2006. Among the EU countries, Germany has the largest cosmetics market, valued at €11.7 billion, followed by France (€10.4 billion), the U.K. (€10 billion), Italy (€8.8 billion), and Spain (€7.4 billion). Europe, U.S., China,......

Words: 7332 - Pages: 30