Organic foods and beverages have long been a strong trend in the food industry, achieving double-digit year-on-year growth for more than a decade, per Nutrition Business Journal (NBJ). Even in 2008, when the recession first began to hit consumers, the organic segment enjoyed annual sales of over 12%, hitting $21.1 billion, according to NBJ. Still, this was a slower growth rate than 2007’s 16.9%. Furthermore, as the economic troubles persist, these somewhat more expensive goods are finding it more difficult to lure shoppers. According to Mintel and SPINS, organic foods and beverages saw a slight 0.3% decline in supermarket sales in 2009 overall.

Just as sales of organic prepared food offerings have declined, so have the sales of the ingredients that comprise them. According to SPINS, organic flour sales saw negative growth of -2% in 2009, after nearly double-digit growth in 2008. Consumers across channels purchased 4.5% fewer organic baking mixes in 2009 than in 2008, with sales at natural food stores weathering an even larger crash: -12.6%.

BOHAN Advertising and Marketing conducted a nationwide survey of 585 American moms over the age of 18 (with at least two children at home) and found these shoppers are disinterested in organic and locally grown food. According to the survey, 24% of those surveyed plan to buy more organics, with roughly a third expecting to purchase more locally grown products. Of those participating in the survey, about half select organics less than once a month; a quarter purchase locally grown food once a week or more.

Mintel research, however, paints a different portrait. Its market research found that nearly 40% of consumers claim they have not changed their organic product purchasing habits because of the economy. It further found that only 3% have stopped buying organic products altogether.

SPINS has found that organic private label products seem to be capitalizing on the troubled economy, likely serving as a “trade-down” of sorts for consumers who simply want to spend less on groceries but want to maintain their “organic” lifestyle. In 2008, the natural market research firm found “organic private label” was the number-one brand in consumer loyalty in a third of the 31 organic grocery categories SPINS evaluated.

“Heavy users of natural and organic food and drink are most likely to indicate they’ve traded down to less expensive organic options,” notes David Browne, senior analyst at Mintel. “However, less-frequent consumers of organic products have shown that they haven’t shifted their behavior. This is good news for the organic food market, as this group may begin to buy more once recession-related fears begin to fade.”

Some 33% of survey respondents trust the term “natural” on food product labels, while 45% have faith in the term “organic.” Troublingly, however, nearly a third of respondents (30%) “do not know if they can trust either term.”

Already, this year has seen more organic desserts and ice cream hit the market than all of 2009 -- 49 versus 36 in 2009. Admittedly, chocolate confectionery is close to last year’s totals -- 62 in 2010 versus 69 in 2009, but all other segments seem to be keeping roughly at pace with 2009’s introductions.

Organic ice creams, however, seem to be bucking the overall trend, with substantial growth in introductions. At this year’s Natural Products Expo West, an abundance of these products could be found. Turtle Mountain added to its line of coconut milk ice creams with a chocolate chip cookie dough option for consumers seeking an “ice cream” free of soy, gluten and dairy, and its organic line (Purely Decadent with Coconut Milk) includes Chocolate Peanut Butter Swirl, Dulce de Leche, Key Lime Pie, Snickerdoodle, Belgian Chocolate and Blueberry Cheesecake.

Horizon Organics expanded its efforts into the ice cream arena with six new offerings, including Coffee and Chocolate Chip Peanut Butter Cup, while Oregon Ice Cream (under its Julie’s brand) produces a host of organic frozen desserts, including Blackberry Sorbet Bars, Mint Fudge ice cream, and Vanilla Bean and Blackberry ice creams under its Alden’s brand.

Hain Celestial Group, long a major player in the natural foods arena, has also thrown its hat into frozen organic desserts with its Rice Dream line. The “rice cream” includes such flavors as Carob Almond, Cookies n Dream, Mint Carob Chip and Vanilla Swiss Almond. Organics’ growth is not confined to ice creams, however; Amy’s Kitchen has launched a pair of frozen organic cakes: Orange Cake and Chocolate Cake.

Mintel and SPINS anticipate the organic food and drink market will recover “gradually during 2010-12 but not at pre-recession growth rates. Consumers have made shifts in their purchase behavior that are likely to carry on through this time period.”

Other Resources
* From Organic and Natural to Fair Trade
* Consumers Sticking with Organics

From the July 6, 2010, Prepared Foods E-dition