Natural and organic food, beverages market to double by 2015

NEW YORK — Natural and organic foods and beverages are expected to realize dramatic growth in 2011 and beyond, following strong U.S. retail sales over the past five years.

According to new research conducted by Packaged Facts, "Natural and Organic Foods and Beverages in the U.S., 3rd Edition," U.S. retail sales of natural and organic foods and beverages rose to nearly $39 billion in 2010, a 9% increase over 2009, and 63% higher than sales five years earlier.

Looking ahead, sales are expected to rise 45% by the end of 2011, while the overall market is expected to grow by 103% between 2010 and 2015, with total annual sales exceeding $78 billion in 2015, the report projected.

Big category drivers include Frito-Lay, a PepsiCo division, which recently announced that by the end of the year, approximately half of its product portfolio — including Lay's Tostitos and SunChips snacks — will be made with all -atural ingredients.

"The Frito-Lay products will in themselves have an enormous impact on the natural foods marketplace, and Frito-Lay's move will spur other manufacturers to invest more heavily in producing natural and organic products," Packaged Facts research director and publisher David Sprinkle said. "Since Frito-Lay's announcement, Kraft Foods and Coca-Cola have made strategic moves to better position themselves in the market."

According to a recent Packaged Facts survey, 38% of U.S. adults polled that are grocery shoppers buy organic groceries, while 58% buy packaged food products marketed as "all-natural" (but not organic). The survey also found that 37% of all respondents "strongly" (12%) or "somewhat" (25%) agreed that they seek out natural and organic foods and beverages.

Back in February, Packaged Facts found that gluten-free products have gained momentum in the market, with sales expected to grow from about $2.6 billion to $6 billion in 2015.