Agriculture Reference
In-Depth Information
for different reasons, among the American and European consumers. Food scares,
such as the bovine spongiform encephalopathy (BSE) epidemic, as well as an inherent
cultural fear of consumption of genetically engineered foods, played a major role for
market expansion in the EU countries. In the U.S., the consumers' concerns about
environmental health and excessive use of chemicals in food production were the
primary driving forces behind the rapid expansion of the organic foods market. In
recent surveys, however, consumer motivation for preferring organic foods is shifting
more toward personal reasons such as health and food safety, in both the EU and the
U.S. (Winter and Davis 2006).
Consumers in the U.S. and the EU purchase 95% of the total global sales of organic
foods (Dimitri and Oberholtzer 2005). Government policies and growth patterns in
organic agriculture differ markedly between these two continents. Although growth
rates of organic food sales are at various stages of maturity in the European countries,
sales in the United States have still grown at an average rate of 20% annually since
1998. According to most estimates, the growth in the U.S. will continue at an annual
rate of 10 to 16% in the following years (Table 4.1). Sales of organic foods were 1.4%
of the total U.S. food sales in 2001, and they reached almost 2% in 2005. This increase
in the share of organic food sales of the total market in the U.S. is expected to reach
3.5% by 2010 (Dimitri and Oberholtzer 2005). Another indication of growing prefer-
ence of organically produced foods among Americans is the fact that the distribution
of organic food sales has shifted from health food stores to conventional retail stores
since 1998. In 2003, 47% of organic food sales occurred in health food stores, while
44% took place in conventional retail stores. In 1998, this distribution was 63% and
31% for health food stores and conventional retail outlets, respectively.
Fresh fruits and vegetables have been the top-selling organic food category in the
U.S. for quite some time (Oberholtzer and others 2005). In terms of amounts pur-
chased annually, tomatoes, carrots, peaches, squash, leafy vegetables, and apples are
some of the leading organic produce types in this country. In 2005, the sales of organic
Table 4.1.
Organic food sales and growth rates in the U.S., 1997-2004 (Dimitri and Greene
2002; Oberholtzer and others 2005)
Year
Sales ($ bill.)
Growth Rate (%)
1990
0.6
1997
3.6
1998
4.3
19.7
1999
5.0
18.2
2000
6.1
21.0
2001
7.4
20.7
2002
8.6
17.3
2003
10.4
20.2
2004
12.4
19.2
2005
14.5
17.0
2006
17.7
22.0
2010
23.8 *
* = estimated.
