October 28, 2020

Bagged salads account for 17% of all organic fresh produce sales in Q3

Total organic fresh produce sales and volume continued to register double-digit growth in the third quarter of 2020, with July-September sales increasing 16% and volume up 15% from the same period in 2019, according to the Q3 2020 Organic Produce Performance Report released exclusively by the Organic Produce Network and Category Partners.

Organic fresh produce in Q3 2020 saw a continuation of trends established in March of this year, with elevated sales across the entire supermarket as consumers continued at-home eating in the face of restaurant closures. As a result, sales of organic fresh produce sales topped $2.2 billion for the quarter, and accounted for 12% of all produce sales, and 6.4% of total produce volume.

As has been the case all year, organic growth continues to increase at a faster rate than conventional produce. The 16% growth in third quarter organic sales was well above the 10% dollar growth in conventional produce for the same period. Additionally, the volume increase of 15.6% was nearly double that of conventional produce, which increased by 8.2% (compared to second quarter growth of 12.9%).

“Once again, sales of organic fresh produce show no signs of slowing and continue to be a major growth opportunity for retailers across the country. In the third quarter, organics drove twice the dollar share compared to volume share — 12% of total produce dollars and 6% of produce volume — underscoring why the growth of organics are so powerful and important to retailers,” said Matt Seeley, CEO, of Organic Produce Network. “As consumers continue to shift from conventional to organic produce, substitution is driving incremental dollars.”

Packaged salads, strawberries, and herbs generated the highest real growth in organic dollars in Q3, adding $105 million in incremental sales growth over the same period last year. With packaged salads leading the way, and accounting for 17% of all organic fresh produce sales, the top 10 growth categories accounted for 70% of all organic dollar growth.

Spearheading the gains in Q3 organic fruit sales were increases in availability, supplies and selection. The berry category, a powerful sales driver year-round, is especially strong during the summer months. Strawberries ranked second in overall organic dollars during third quarter, with blueberries the fourth highest dollar contributor. Additionally, strawberries (27%) and blueberries (17%) generated among the strongest dollar increases of all organic produce categories during the third quarter of 2020 compared to the same period last year.

Organic apples, also a traditionally strong category, continue to perform well despite the fact Q3 marks the low ebb of domestic crop availability. During the third quarter, organic apple sales jumped by nearly 20%, to $128 million, up from $107 million the previous year. Organic grapes, with domestic production peaking, moved into the top 10 categories in organic produce dollars. However, grapes did show a decline of 8% in Q3 sales dollars compared to a year ago.

Bananas continued to be the volume leader of organic produce offering, generating 18% of total volume and increasing by 8.3% from the previous year.

The West region of the U.S. led all geographic areas of organic sales and volume in the third quarter, generating a 20% increase in dollars and 17% lift in volume compared to Q3 of last year. Overall ACV performance in the third quarter also grew from the second quarter. In Q2 of this year, ACV dollars averaged $7,014 and jumped to $8,751 for the most recent quarter, an increase of nearly 25%.

“The Midwest and South continue to be the strongest opportunity regions for organic produce growth. Organic ACV dollars in those two regions lag far behind the West and Northeast,” said Steve Lutz, senior vice president of insights and innovation for Category Partners. “Even though organic growth is strong compared to conventional produce, growth rates in the Midwest are below every other region, with ACV volume and dollar performance in the Midwest less than one-half the rate of supermarkets in the West.”

The Q3 2020 Organic Produce Performance Report utilized Nielsen retail scan data covering total food sales and outlets in the U.S. over the months July, August and September. For the first six months of 2020, organic fresh produce sales were up 11% in dollar growth and 13% in volume over the same period of 2019. Total organic fresh produce sales for January-June of this year totaled $3.3 billion.




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