In North America, 3.3 Million Hectares of farmland were managed organically in 2018. Of these, 2 Million were in the US and 1.3 Million in Canada, representing 0.8% of the total agricultural area in the region. Almost 6% of the food sold in the US is now organic. The US held to an unbeatable share in the region's market since the decade. However, with the increase in other countries, the USA is expected to show a decline in the market share by the end of the forecasted period. According to the recent publication of Actual Market Research, titled 'North America Organic Food & Beverage Market Outlook, 2026' the region's market was valued at USD 47.72 Billion in the year 2015. While there were certain growth trajectories taking shape going into 2020, the onset of COVID-19 turned the organic food marketplace upward early in the year, and the market is expected to grow with an anticipated CAGR of 10.58%.
As per the data from the United States Department of Agriculture, there are around 20,000 stores, and 3 out of four conventional grocery stores are producing organic food in the US. The demand for organic food has complimented the growth of the industry, significantly. The organic food segment in the region valued USD 43.79 Billion in the year 2015. By the end of the forecasted period, the organic beverage segment in North America is to account for a market share of 10.80%. The lack of awareness and easy availability of organic food over beverages can be cited as the reason for the shortfall of the segment.
Organic alternatives have witnessed a decline in demand within most soft drink categories, except juice. However, in hot drinks, demand for organic beverages is strong, with organic tea witnessing a rise in sales as clean labels, ethical sourcing, and sustainability, which are aspects rolled into the organic label, increase in priority among tea drinkers. Such characteristics are defining the quality of tea and the ethics of producers and are concurrent with the popularity of specialty products and premiumization within the organic category. The organic coffee & tea segment was valued at USD 2.46 Billion by the end of the year 2020. Transcending the aisles of mainstream or natural health retailers, organic products are now an option just about anywhere from grab-and-go convenience stores to coffee urns. While some organic market segments are still only establishing market share and value chain, others have become dominant players in their categories. The consumers continue to be drawn to the attributes that organic products offer, and the next step will be to better understand organic consumers and to better communicate the benefits of organic to them. The organic fruit & vegetable segment is the highest contributor in North America's organic food market. Followed by this, the organic frozen & packaged food segment accounted for 37.20% in the year 2020.
The rise in demand for private label products is fuelled by the change in consumer perception, with private label products now provide similar quality to that of branded products at a more affordable price. Brand loyalty is not as strong in commoditized products such as olive oil, leading to several brands gaining share benefiting from discounted price offerings.
In 2019, the US organic sector moved ahead with an innovative check-off program for which, in less than a year, organic stakeholders invested USD 1.5 Million to advance projects focussing on four key actions. General Mills recently invested around USD 3 Million into a startup which manufactures organic granola, due to the steadily growing demand for organic food. Another noteworthy example would be a new startup company Yumi, which has come up with organic foods and products for babies, the company have attracted customers for their products rapidly. One of the major branded players in organic beverages in the USA is Unilever United States Inc. In an attempt to boost brand share and leverage the rising demand for premium tea, Unilever acquired the Pukka and Pure Leaf brands to expand its hot tea business. Both brands have witnessed positive performance within organic categories such as organic black, green, fruit/herbal tea, thus presenting an opportunity for Unilever to improve its share within hot tea.