Organic produce is following the pattern of many food categories during inflation, with increasing prices offsetting decreasing volume for a net gain, according to a new report.
During the third quarter of this year, total dollars for organic produce were up 4.1% while volume declined 4.5%, according to a report from Organic Produce Network (OPN) and research firm Category Partners. This was a function of price increases, which reached 8.4% for the quarter compared with the previous year.
That increase is lower than the price increase for produce as a whole, which exceeded 10%, according to the OPN report. However, shoppers always have the option of trading down from organic to conventional produce. That trading seems to be happening with certain categories, notably lettuce and apples, where the organic price rose at more than double the rate of conventional counterparts, leading to a volume decline as high as 15%.
Other categories, however, fared better. The best was organic tomatoes, with volume up 19% and sales dollars up 30%. Potatoes, onions and peaches also had double-digit gains in sales dollars.
“In this inflationary time period, it will be important for organic suppliers to understand how their pricing impacts substitution behavior among various consumer demographics,” said Tom Barnes, CEO of Category Partners.
