Organic Price Premium Shrinking

By Pan Demetrakakes, Senior Editor

Feb 04, 2019

The retail price of organic food is dropping, thanks to increased supply and other factors, according to sales figures from Nielsen.

Organic food cost an average of 7.5% more than non-organic on a per-unit basis last year, down from 9% more in 2014. Numbers vary considerably among product categories, with fresh organic produce having the lowest premiums, and organic milk and eggs having the highest – as much as 86% for eggs. The latter are more expensive because the FDA has narrow, specific rules about how animals producing organic milk and eggs must be treated.

The supply of organic products is increasing, as mainstream and even discount grocers are expanding their selection. But consumer demand is growing even faster. Sales of organic consumable goods rose 9% last year, with 88% of households buying them, and millennials with young children among the most active segments.