Milling & Baking News - May 8, 2018 - 7

Editorial

Grains losing ground in organic foods market

ven though baked foods demand has been accounted for by fruits, vegetables and dairy has
sluggish in recent years, comparisons of the been widening in recent years. Overall spendcategory against other major food sectors ing on organic food in 2016 was estimated by the
generally have suggested that grain-based products U.S.D.A. at $40.2 billion, up 180 per cent from 2006.
have maintained share - that most other food cat- Over this period organic bread and grains expenegories have been similarly weak.
ditures rose 127 per cent, to $3.75 billion. Among
By contrast, recent data published by the U.S. the eight categories tracked by the U.S.D.A., grainDepartment of Agriculture and sourced from Nu- based foods had the smallest 10-year growth rate.
trition Business Journal paint a very different story Grain-based foods accounted for 9.3 per cent of orfor organics - a category that has shown steady ganic food sales in 2016, a marked narrowing from
growth over the past decade. While grain-based 11.5 per cent in 2006. The three fastest growing catfoods have participated in this growth, the sector's egories over the past decade in organics were conperformance has not kept pace with any other ma- diments, up 299 per cent; meat, fish and poultry,
jor food category.
up 298 per cent; and fruits and vegetables, up 229
In the 1990s, produce and dairy emerged as the per cent. The market share for meat, fish and poultwo leading categories within organic foods, ac- try remained a modest 3.3 per cent, up from 2.3
counting for more than half of
per cent in 2006. For produce,
Despite the steady growth
total consumer organic food
the market share grew to 40 per
spending. Consumers seemed
in demand for organic food
cent from 34.
particularly focused on purThe acquisition of Dave's
products over the past two
chasing fruits and vegetables
Killer Bread in 2015 by Flowers
decades, bakers have not
cultivated without chemical
Foods, Inc. and the launch of
found the market to be a
pesticides, and Horizon OrEureka! around the same time
cakewalk.
ganic (Horizon milk was inby Bimbo Bakeries USA demontroduced in 1991) catapulted the organic dairy strated that the commitment of grain-based foods
category forward. As a result, consumer spend- to the organic category was entering a new and far
ing on organic produce and dairy dramatically more serious phase. Because this transaction ocover-indexed when measured against the share of curred near the end of the U.S.D.A. study period,
expenditures on conventional dairy and produce. growth enjoyed by D.K.B. since the Flowers acquiWhile accounting for more than 50 per cent of or- sition largely was excluded from the U.S.D.A. data.
ganic sales, in overall food spending (conventional
Despite the steady growth in demand for organic
and organic), fruits, vegetables and dairy capture food products over the past two decades, bakers
less than a fifth of the consumer food and bever- have not found the market to be a cakewalk. Proage dollar.
curing the variety of ingredients needed has been
Despite this considerable head start for organic a challenge. Rudi's, for many years the leading
dairy and produce, many observers suggested that brand of organic bread, has experienced difficulover time the lead over lagging categories such as ties sustaining steady growth. Even Flowers, while
grain-based foods, condiments and snacks would pleased with the success of its Dave's Killer Bread
narrow as makers of processed foods successfully brand, so far has been unable to achieve its sales
addressed the greater complexity and expense in- objectives for Alpine, its second organic brand. As
volved in developing organic products made from grain-based foods continues seeking the right formultiple rather than a single or a few ingredients.
mula for growth in organic products, it is clear from
The narrowing of the gap has yet to materialize. the U.S.D.A. data other leading food categories are
To the contrary, the share of organic food spending moving ahead, often with considerable success. MBN
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