New Standards for Organic Foods Will Cause Sales and Consumer Understanding to Soar

NEW YORK, NY – (October 24, 2000) – MarketResearch.com announced today the release of a new study “The U.S. Organic Food Market”, by Packaged Facts. Predicting the rise of organic sales, this study attributes part of the projected $12 billion market increase to new industry standards proposed by the USDA. Prompted by consumer backlash to hormone use, genetic engineering and irradiation, the USDA intends these federal regulations to define “organic” and enable this segment to become a nationally recognized part of the food and beverage industry. This new legislation will also validate organics in the minds of consumers, propel sales and instigate an overseas market.

“European countries currently ban specific American products because of uncertain genetic content," said Claire Madden, VP of Marketing at MarketResearch.com. “U.S. farmers have lost an estimated $200 million in annual sales because of this ban. With the new standards, U.S. products will meet European guidelines and, hopefully, open a new avenue for sales.”

The use of recombinant Bovine Growth Hormone (rBGH), a synthetic growth hormone which increases the production of milk in cattle, will be forbidden by the new legislation. Use of this hormone has proven to cause mammary infections in cows and resulted in depressed milk prices. Although other controversial issues still remain, the new USDA regulations address most of the serious concerns and should be law by end of 2000.

Scope and Methodology

This report covers foods and beverages that contain or are made wholly of ingredients defined as “organic” and that are sold at retail through such outlets as natural food stores, natural food supermarkets, and conventional supermarkets, as well as farmers’ markets and mail order. The report focuses on products that are labeled as organic. Organic products are not limited to traditional health or natural foods. Almost any category of food product available to consumers may be grown or produced in accordance with organic standards and labeled by organic certifiers. Snacks, poultry and meat, beer, wine, and coffee can all be found in organic versions alongside more traditional categories like produce and packaged foods.

The information contained in this report was obtained from both primary and secondary research. Primary research entailed an in-depth, on-site examination of the or-ganic food market through store visits and interviews with marketers to obtain information on marketing, merchandising, and new product trends. Secondary research entailed data gathered from sources such as trade and consumer publications, newspapers, government reports, financial reports, company literature, and corporate annual reports. Revenues and revenue growth rates are based on secondary research confirmed through primary interviews with professional organizations, trade publications, and major players in the market.

In estimating total retail sales and sales growth for organic foods, Packaged Facts has relied on data published by trade magazines such as Nutrition Business Journal, Natural Foods Merchandiser, Whole Foods, and Organic & Natural News, supplemented by interviews with the Organic Trade Association, marketers, retailers, and other trade sources.

The consumer demographic information in this report is derived from data compiled from various sources including the Food Marketing Institute, The Natural Marketing Institute, and The Hartman Group. Other data sources for consumer demographics include the 2000 survey by Whole Foods magazine of readers of Better Nu-trition, a health-oriented consumer publication with more than 470,000 copies distributed to more than 1,400 health and natural product stores in all 50 states.

Issues Addressed:

• Current and Projected Market Growth
• Factors Affecting Market Growth
• Federal, State and International Regulations
• Purchase Criteria and Barriers
• Mergers and Acquisitions
• Marketing Tools and Trends
• New Product Trends
• Channels of Distribution and Retail
• Consumer Profiles

Companies/Sites Discussed:

• Annie’s Homegrown, Inc.
• General Mills, Inc.
• The Hain Celestial Group, Inc.
• Nature’s Path Foods, Inc.
• The New Organics, Inc.
• Stonyfield Farm, Inc.
• Straus Family Creamery

Categories Covered:

• Fresh Produce
• Packaged Grocery
• Dairy
• Frozen Foods
• Soy
• Beverages
• Meat
• Candy and Snack Foods

Tables and Graphs:

• Retail Sales of Organic Foods
• Share of Sales by Category
• Share of Sales by Type of Outlet
• Selected Marketers, Brands & Product Type
• Number of New Product Introductions to 2000
• Demographic Characteristics

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