All Articles Food Food Retail The rise of organic produce

The rise of organic produce

5 min read

Food Retail

Organic was barely a gleam in a grocer’s eye when Claris Ritter began her career in the wholesale produce industry more than 30 years ago. “I started in this business in the late ‘70s, and we had one kind of kale,” said Ritter, now produce general manager at Alfalfa’s market in Boulder, Colo. “Grocery stores, when I was kid, if they could fill six aisles that was a big grocery store.”

In the next decade or so, demand from a small but steadily growing group of consumers and farmers concerned about the effects of consuming fruits and vegetables grown with chemical pesticides and fertilizers spurred the rise of the organic produce industry and the creation of markets like Alfalfa’s. Started by a small group of like-minded natural and organic devotees, the store became part of the larger Wild Oats chain in the mid-1990s, which was acquired by the even bigger Whole Foods several years ago. One of the original founders of Alfalfa’s, Mark Retzloff, and three partners, bought the original location back and reinstated the Alfalfa’s name in 2011.

During those years, organic production climbed. U.S. sales of organic food and beverages soared from $1 billion in 1990 to $26.7 billion in 2010. Sales in 2010 were up 7.7% over the previous year, with fruits and vegetables seeing the biggest growth with an 11.8% jump, according to the most recent data from the Organic Trade Association.

“I think a lot of it is just the consumer consciousness, the health consciousness, it’s really increasing more and more,” Ritter said. “And also the environmental consciousness. There are a lot of people who are not only concerned about the effect[s] of the pesticides or the GMOs that are in conventionally grown foods, but also the environmental effects of all those chemicals.”

Confusion and concerns about genetically modified crops are certainly playing a role in rising demand, agrees industry veteran Andy Grant of Grant Farms in Colorado. Additionally, he said, retailers have gained substantial knowledge about organics. “I think organic is graduating from being kind of that thing that retailers really don’t know much about to being something that has widespread recognition from more than just the early adopter kind of customers.”

Like Ritter, Grant’s career in organics began decades ago. As a youngster he discovered a passion for growing things, a passion that developed into a dedication to organic farming. Grant sat on the Organic Trade Association’s board of directors for six years and in 1987 he helped write the first state law defining certified organic produce. “I’m genetically programmed to grow organic food for people to eat,” he said. “That’s what brings me joy.”

Early on, farmers markets, co-ops and natural food stores like Alfalfa’s, and later Wild Oats and Whole Foods, were the primary place consumers could buy organic produce. That’s changed as organic has become more mainstream, and by 2010, mass market retailers including traditional supermarkets and warehouse clubs accounted for 54% of all organic food sales, with 39% coming from natural food retailers, according to OTA data.

One reason retailers kept their organic produce sections so small in the beginning was that there were precious few crops available, and those that could be had came with a substantially higher price than the conventionally grown version.

That’s changing as farmers in global markets convert to organic growing and create a more robust, year-round supply chain for many organic fruits and vegetables, Ritter said. The new crop of organic farms includes small family farms in Mexico, like the ones organized under the Del Cabo co-op created by California-based Jacobs Farm.

“[Owner] Larry Jacobs is a long time certified farmer, and he has taught other Mexican farmers down there how to grow organic,” said Ritter. “He helps them get certified and then he markets their produce back in the U.S.”

Organic cropland in the U.S. grew from 2.6 million acres in 2008 to 3.1 million in 2011, according to data from the Agriculture Department, although organic was still less than 1% of the country’s total growing acreage. Globally, growers added 2 million hectares between 2008 and 2009, ending that year with 37.2 million hectares, according to The World of Organic Agriculture: Statistics & Emerging Trends 2011.

In addition to meeting demand, more sources for supply helps when it comes to price. Consumers still pay a premium for organic, but it’s often less than it used to be in the early days, Ritter and Grant said.

“Some of the prices got more reasonable to where I think a much larger portion of the population can access it,” said Grant, whose farm created a community-supported agriculture operation or CSA last year.

Still there, are some fruits that can’t be acquired in their organic forms at any price, including mung sprouts, jicama and Thai coconuts, said Ritter. Other crops see their retail prices rise and fall with supply, which can still be scarce. Organic fans are likely to see the phenomenon play out with apples soon, she said, as the supplies stockpiled in the fall have dwindled faster than usual on higher demand from export markets.

“We’re just about to see the domestic apple market get really strong, prices will get really high,” Ritter said. “Price is really a function of supply, and we’re still having greater demand than supply. We’ll have to see, if we ever do catch up to the demand, what happens with the price.”