Insights: The Organic Option
Natural food sales totaled about $11.4 billion last year; up 12% from 2002, according to the Natural Foods Merchandiser, a leading trade publication. Natural dairy sales totaled $983 million for the year; up 11%.
Organic foods sales grew to $4.5 billion during 2002; an increase of 17%. Organic dairy sales grew a whooping 18% and totaled $626 million, according to the magazine's analyst.
For perspective, look at the dairy share of sales. In the organic foods category, milk and dairy products accounted for about 14% of total sales. Conventional dairy products have accounted for about 11% of total food sales for the past several years.
Other research and analysis confirms the role of dairy in the organic category. Among the top ten organic foods moving to consumers through conventional grocery stores are: milk, in third place; yogurt, in fifth and cheese, in eighth.
- Horizon Organic was right on the verge of becoming national and it was a done deal shortly after Dean Foods acquired the company. Horizon markets a broad line of milk, cultured products, cheeses and other items in the "dairy" case.
- Stonyfield Farms is one of the founding fathers of organic dairy and has had a national presence for several years. Doubters may not have declared Stonyfield a national brand, but the acquisition of Brown Cow West should have put that issue to rest.
- Organic Valley, another founding father, has products almost everywhere.
- Several very well respected regional brands concentrated in the Northeast and along the West Coast, but also scattered across the country are producing a broad range of organic dairy foods.
- HP Hood and Stonyfield are now teamed up to go national with Stonyfield Farms branded milk.
- Dean and Hood aren't the only big players paying attention to the organic business.
- Danone took a 40-percent stake in Stonyfield in 2001 and doubled that stake earlier this year.
- Other major food companies are acquiring organic brands and/or creating their own. Many of the products are dairy, dairy-based or laced with dairy ingredients.