US organic food manufacturers are finding their growth potential limited by the inconsistency of raw material supply, says a report from the country’s Organic Trade Association.
Organic foods continue to enjoy rapid growth, with sales in 2006 increasing 21 per cent to reach more than £8 billion. However, the fresh produce category registered the least growth of all food sectors in the period covered in the report (2005 and 2006). The 11 per cent comparing unfavourably with the 25 per cent rise for dairy products and 55 per cent uplift for meat.
A survey of organic manufacturers suggested that supply of raw materials is not keeping up with the spiraling demand.
Fifty-five per cent of survey respondents in 2007 cited a lack of dependable supply as a major limitation on their ability to sell more organic products.
The lack growth in fruit and vegetables can in part be explained by the fact that the sector is growing from a larger base than some other sectors. And the good news is that growth is forecast to reach 24 per cent when 2007 is assessed.
Food safety concerns in the US have focused on fresh produce, particularly after the spinach contamination saga last year. Organic products have reaped the benefits of the consumer backlash.
Mass market grocery stores are the largest sellers of organic food, accounting for 38 per cent of US sales in 2006. But the OTA said that sales are increasing across al of the main sales channels.
