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Natural and Organic Foods and Beverages in the U.S., 4th Edition


Attention: There is an updated edition available for this report.

Natural and Organic Foods and Beverages in the U.S., 4th Edition

Natural and organic foods have found a loyal – and growing – fan base in the United States. What was once a category of food found in small co-ops, “alternative” food stores and, with the advent of Whole Foods, niche, high-end supermarkets have now become ubiquitous. Every major supermarket chain in the U.S., from Kroger to Target to Safeway to Walmart – have store-brand lines of natural and organic products. These are truly mainstream products.

And consumers want them. Consider that, in 2014, retail sales of natural and organic foods and beverages grew 5.5% to nearly $53.5 billion. That figure is 53% higher than sales just five years earlier. Organic foods remain the shining star of this market, with that segment gaining 12.5% in sales in 2014.

But the industry is not without controversy. For example, lawsuits over alleged misuse of “natural” claims on food labels have mushroomed in the past several years. “Natural” claims have also been criticized by the popular media, consumer advocacy groups, and even organic industry groups as being ill-defined and meaningless. The result has been a retreat from “natural”labels by many marketers, and confusion or avoidance on the part of consumers.

This completely updated report examines sales and growth potential, identifying key issues and trends that will affect the marketplace through 2019. The report also analyzes and profiles major marketers and retailers, examines marketing and new product trends, and tabulates consumer attitudes and behaviors toward natural/organic foods and beverages and the corresponding retail shopping patterns. Numerous tables, charts, graphs, and illustrations highlight and reinforce key points.

Methodology

Our sources of information for Natural and Organic Foods and Beverages in the U.S., 4th Edition include primary research entailing interviews with retailers and other members of the industry, and on-site examination of retail stores. Secondary research involved the evaluation and comparison of data from articles found in financial, marketing, and industry and consumer publications, as well as on corresponding websites. Other sources for secondary data include annual reports, 10-Ks, transcripts of earnings calls, and literature from individual companies; government reports; industry associations such as the Organic Trade Association (OTA); and other reports by Packaged Facts. Consumer data are derived from Simmons National Consumer Surveys for Fall 2013, from Experian Marketing Services.


  • Executive Summary
    • Scope and Methodology
      • Scope of Report
      • Definition of "Natural"
      • Definition of "Organic"
      • Report Methodology
      • A Range of Sales Estimates from Different Sources
    • The Market
      • Retail Sales of Natural/Organic Foods and Beverages Reach $53.5 Billion in 2014
      • Organic Foods and Beverages: A Larger Slice of a Bigger Pie
      • Produce and Dairy Are the Largest Categories
      • Mass-Market Channels Capture Almost Half of Retail Sales
      • Most Consumers Buy Natural and/or Organic Products
      • Social and Environmental Issues as Drivers for Natural/Organic Foods and Beverages
      • The GMO Debate
    • The Marketers
      • Marketer Overview
      • Recent Mergers and Acquisitions
      • Is Selling the Company Selling Out?
      • The Gourmet/Natural Foods Synergy
      • Private Label Natural and Organic Products Booming
    • Marketing and New Product Trends
      • Marketers Removing "Natural" Claims from Products
      • More Retailers Offering Private Label or Exclusive Lines
      • Non-GMOs
      • Two New Frozen Foods Marketers Hope to Take the Market by Storm
      • Shelf Stable Mixes and Meals
      • Dairy Case
      • Snacks
    • Retail Trends
      • Upsurge of Competition in Natural Foods
      • Store-within-a-Store Merchandising vs. Integration
      • Channel and Retailer Profiles
      • Natural Food Stores
      • Warehouse Clubs
      • Farmers Markets
      • Internet and Mail Order
    • Consumer Trends
      • One in Four Households Buy Organic Foods
      • Attitudes Toward Food and Cooking
      • Trader Joe's and Whole Foods
  • The Market
    • Market Overview
      • Scope of Report
      • Some Foodservice Crossover
      • Definition of "Natural"
      • Definition of "Organic"
    • Market Size and Growth
      • Methodology for Sales Estimates
      • A Range of Sales Estimates from Different Sources
      • Retail Sales of Natural/Organic Foods and Beverages Reach $53.5 Billion in 2014
        • Table U.S. Retail Sales of Natural and Organic Foods and Beverages, 2009-2014 (in billions of dollars)
      • Organic Foods and Beverages: A Larger Slice of a Bigger Pie
      • Produce and Dairy Are the Largest Categories
      • Mass-Market Channels Capture Almost Half of Retail Sales
    • Market Outlook
      • Most Consumers Buy Natural and/or Organic Products
      • Reasons for Buying Natural/Organic Foods and Beverages
      • Social and Environmental Issues as Drivers for Natural/Organic Foods and Beverages
      • Produce and Dairy are `Gateway' Categories for Organic Foods
      • Increased Sales Also Being Driven by Widening Distribution Channels
      • Overlap Between Natural/Organic and Local Foods
      • Some Organic Products in Short Supply
      • Organic Farming Takes Root
        • Table U.S. Certified Organic Acreage, 1992, 2000, 2003, 2005, 2008, and 2011
      • 2014 Farm Bill Supports Organic Industry
      • Some Farmers Seek Alternative Labels to Organic
      • The GMO Debate
      • State GMO Labeling Initiatives
      • Retailer and Marketer GMO Initiatives
      • Say `No' to Natural?
      • Is Some of the Shine Off Organic?
      • Are Organic Foods Healthier?
      • A Rash of Lawsuits over Natural Labeling
      • Many Large Companies Are Retreating from Natural Labeling
      • "Simple" or "Simply" May Not be Safer
      • What's the Solution?
      • Is "Raw" the Next Target of Food Litigation?
      • Less than 20% of Consumers Account for Almost Half of Natural/Organic Sales
      • Another Demographic Segmentation
    • Projected Market Growth
      • U.S. Retail Sales Will Reach $86.7 Billion by 2019
        • Table U.S. Retail Sales of Natural and Organic Foods and Beverages, 2014-2019 (in billions of dollars)
  • The Marketers
    • Marketer Overview
      • Many Thousands of Marketers
      • More Acquisitions, Investments, and Funding
      • Recent Mergers and Acquisitions
      • Organic Extensions of Mainstream Lines Not Very Successful
      • Is Selling the Company Selling Out?
      • The Gourmet/Natural Foods Synergy
      • Private Label Natural and Organic Products Booming
    • Competitor Profiles
      • Amy's Kitchen, Inc.
      • Annie's, Inc.
      • Boulder Brands, Inc.
      • Chobani, LLC
      • General Mills, Inc.
      • Cascadian Farm
      • Food Should Taste Good
      • Lärabar
      • Muir Glen
      • Original Cheerios Goes Non-GMO
      • The Hain Celestial Group, Inc.
      • the happy egg co.
      • Honest Tea
      • Newman's Own, Inc.
      • Organic Valley
      • WhiteWave Foods Co.
  • Marketing and New Product Trends
    • Marketing Trends
      • More Retailers Offering Private Label or Exclusive Lines
      • Non-GMOs
      • Third-Party Certification
    • New Product Trends by Category
      • Frozen Meals
      • Veggie Burgers
      • Ethnic Flavors
      • You Say Potatoes
      • Shelf-Stable Foods
      • Sauces and Cooking Ingredients
      • Dairy Case
      • Milk Protein Shakes
      • Milk Alternatives
      • Yogurt: It's All Greek to Me
      • Eggs-Cage Free, Plus
      • Fresh Produce
      • Cereals and Cereal Bars
      • Snacks
      • Refrigerated Snacks
      • Desserts
      • Baby and Kid-Targeted Foods
      • Heads Up: TummyTickler and Bellywashers Rebrands as good2grow
      • Beverages
      • Coffee and Tea
      • Sodas
      • Functional Drinks
  • Retail Trends
    • Overview
      • Upsurge of Competition in Natural Foods
        • Table Selected Fresh and Natural Foods Competitors, 2014
      • Store-within-a-Store Merchandising vs. Integration
      • Retailer Profile: The Kroger Co.
      • Retailer Profile: Safeway Inc.
      • Natural Food Stores
        • Table Trader Joe's vs. Whole Foods Market, 2013
      • Retailer Profile: Whole Foods Market Feeling the Heat
      • Retailer Profile: Trader Joe's
      • Smaller Natural Foods Chains and Independents Booming
      • Retailer Profile: Sprouts Farmers Market
      • Retailer Profile: Natural Grocers by Vitamin Cottage Planning Major Expansion
      • Retailer Profile: Fresh Thyme Farmers Market Starting Up
      • Natural Food Co-ops
      • Retailer Profile: PCC Natural Markets
      • Retailer Profile: Park Slope Food Coop
      • Mass Merchandisers and Supercenters
      • Retailer Profile: Walmart Forays into Organic Foods-Again
      • Retailer Profile: Target Corp. Is Also Targeting Natural and Organic Products
      • Warehouse Clubs
      • Retailer Profile: Costco Wholesale Corp.
      • Retailer Profile: Sam's Club
      • Convenience Stores
      • Drugstores Making a Play for Food
      • Retailer Profile: Walgreens Has Three Different Food Strategies
      • More than 8,100 Farmers' Markets Nationwide
      • Two Types of Farmers' Markets
      • Community Supported Agriculture Programs (CSAs)
      • Internet and Mail Order
      • Retailer Profile: AmazonFresh
      • Retailer Profile: FreshDirect Focuses on Premium Fresh Foods
      • Retailer Profile: Peapod Uses Supermarkets to Fulfill Orders
  • Consumer Trends
    • Organic Purchasing Patterns
      • One in Four Households Buy Organic Foods
        • Table Consumer Base for Organic Foods, 2010-2013 (percent and number in millions of U.S. households)
      • Asian-American, Upscale Consumers Are Prime Organic Shoppers
        • Table Top Demographics for Household Purchasing of Organic Foods, 2010 vs. 2013 (percent and index among U.S. households)
      • Yogurt, Meat/Poultry Are Top Organic Categories by Usage Rate
        • Table Top Product Categories for Household Purchasing of Organic Foods, 2010 vs. 2013 (percent and index among U.S. households)
    • A Broader Look at Natural Foods
      • Nearly Half Prefer Foods Without Artificial Additives
        • Table Percent of Consumers Who Look for Organic/Natural Foods and Who Prefer Foods Without Artificial Additives, 2007-2013 (U.S. Adults)
      • Race, Socio-Economics Differentiate Natural Food Shoppers
        • Table High-Index Demographics for Consumers Who Agree a Lot with the Statement, "When Shopping for Food, I Especially Look for Organic or Natural Foods," 2013
        • Table High-Index Demographics for Consumers Who Agree a Little with the Statement, "When Shopping for Food, I Especially Look for Organic or Natural Foods," 2013
        • Table Demographic Overview of Consumers Who Agree with the Statement, "When Shopping for Food, I Especially Look for Organic or Natural Foods," 2013 (percent, number and index among U.S. adults)
      • Older Consumers More Strongly Avoid Artificial Additives
        • Table High-Index Demographics for Consumers Who Agree a Lot with the Statement, "I Prefer to Eat Foods Without Artificial Additives," 2013
        • Table High-Index Demographics for Consumers Who Agree a Little with the Statement, "I Prefer to Eat Foods Without Artificial Additives," 2013
        • Table Demographic Overview of Consumers Who Agree with the Statement, "I Prefer to Eat Foods Without Artificial Additives," 2013 (percent, number and index among U.S. adults)
    • Food and Shopping Psychographics
      • Attitudes Toward Food and Cooking
      • Attitudes Toward Nutrition
        • Table Food and Cooking Psychographics: Overall, Consumers Who Shop for Organic/ Natural Foods, and Consumers Who Prefer Foods Without Artificial Additives, 2013 (U.S. adults)
        • Table Nutrition and Diet Psychographics: Overall, Consumers Who Shop for Organic/ Natural Foods, and Consumers Who Prefer Foods Without Artificial Additives, 2013 (U.S. adults)
      • Shopper Attitudes and Behavior
        • Table Selected Shopping Psychographics: Overall, Consumers Who Shop for Organic/ Natural Foods, and Consumers Who Prefer Foods Without Artificial Additives, 2013 (U.S. adults)
        • Table Selected Media Psychographics: Overall, Consumers Who Shop for Organic/ Natural Foods, and Consumers Who Prefer Foods Without Artificial Additives, 2013 (U.S. adults)
    • Retail Shopping Trends
      • Trader Joe's and Whole Foods
      • Organic/Natural Shopper Indexes by Top Grocery Retailers
        • Table Natural and Organic Consumer Shopping Patterns in Selected Grocery Retailers, 2013 (overall, consumers who look for organic/natural foods and consumers who prefer foods without artificial additives)

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