The US organic food market has been forecast to increase at a compound annual growth rate (CAGR) of 7.4% through to 2016, driven by the increasing number of health conscious consumers, and the increase in the adoption of private label brands.
The organic industry has exploded in the past decade, with $35 billion in sales and 10 percent growth just last year. There are more than 17,000 certified organic businesses in the country.
Producers of organic crops and conventional crops long have been at odds as organic products have grabbed market share and the industry has advertised organic foods as healthier than other foods.
However, despite there being a high consumer demand for organic foods, there are still not enough organic farmers to support the need. Americans tend to get the majority of their organic foods from developing countries.
According to a recent report, 'Organic Food Market in the US 2012-2016,' private label brands of organic food are becoming prominent in the US because these products are priced lower than branded organic food products because of their operational efficiency.
In the US, store brand sales have outpaced sales of food manufacturers' brands, generating gross margins of more than 35% especially in food categories such as dairy products. Thus, because of the increase in private label brands of organic foods, there has been an increase in the sales and consumption of organic food.
Also, many large retailers such as Wal-Mart, Tesco, and Safeway have entered in this market to target the health food and organics shopper with their special organic food products.
One of the main challenges in this market is the high cost of organic food, which makes them unaffordable for many US consumers. Further, the US economy is still recovering from the 2008-2009 recession and high prices of organic food products restrict consumers from buying them.
Key players currently dominating the US organic food market include Amy's Kitchen Inc., Hain Celestial Group Inc., Nature's Path Foods Inc., and Organic Valley Family of Farms.
For more information on the US organic food market, see the latest research: Organic Food Market Research
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