Organic food sales have been booming, paced by double-digit growth in each of the past five years. As food marketers look to expand that high-margin category, dairy will remain at the epicenter because health-conscious parents often make their first organic purchase when reaching for milk to nourish their young family. Marketers are now looking to leverage that trend as children grow older. For organic dairy producers, that buying pattern should yield solid returns for the foreseeable future.
Dairy ranks as the organic market leader with baby food, primarily comprised of fruits and vegetables, being its only rival. Even though organic dairy product sales account for 6 percent of total dairy sales, dairy represents a major chunk of all organic food marketing at 14 percent.
As the organic and the next best high-end category lumped into "natural foods" gain traction, established food companies have bought into the action by purchasing smaller organic start-ups. In doing so, marketers are leveraging the newly acquired grassroots expertise in an attempt to grow other food categories into organic sales engines.
As organic businesses are being consumed by large-scale corporations, the Organic Valley Cooperative and its product line stands among those who have held true to its founding mission. Launched 25 years ago, Organic Valley has grown into the nation's largest organic cooperative processing 1.5 billion pounds last year. That was enough milk to rank it 19th among all U.S. dairy cooperatives. While it focuses on a number of products, Organic Valley's sales totals further validate dairy as the gateway to other organic products, as 92 percent of the co-op's revenue stream originates from dairy sources.
Only time will tell how much market share organic foods can eventually reap when compared to conventional counterparts. As protective new parents continue to reach for organic, those sales will no doubt remain steady. However, the question for marketers both large and small looms - Can these health-conscious attitudes be extended into the school years when parents protective attitudes wain and pocketbooks get thinner?
This editorial appears on page 12 of the January 10, 2015 issue of Hoard's Dairyman.
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Dairy ranks as the organic market leader with baby food, primarily comprised of fruits and vegetables, being its only rival. Even though organic dairy product sales account for 6 percent of total dairy sales, dairy represents a major chunk of all organic food marketing at 14 percent.
As the organic and the next best high-end category lumped into "natural foods" gain traction, established food companies have bought into the action by purchasing smaller organic start-ups. In doing so, marketers are leveraging the newly acquired grassroots expertise in an attempt to grow other food categories into organic sales engines.
As organic businesses are being consumed by large-scale corporations, the Organic Valley Cooperative and its product line stands among those who have held true to its founding mission. Launched 25 years ago, Organic Valley has grown into the nation's largest organic cooperative processing 1.5 billion pounds last year. That was enough milk to rank it 19th among all U.S. dairy cooperatives. While it focuses on a number of products, Organic Valley's sales totals further validate dairy as the gateway to other organic products, as 92 percent of the co-op's revenue stream originates from dairy sources.
Only time will tell how much market share organic foods can eventually reap when compared to conventional counterparts. As protective new parents continue to reach for organic, those sales will no doubt remain steady. However, the question for marketers both large and small looms - Can these health-conscious attitudes be extended into the school years when parents protective attitudes wain and pocketbooks get thinner?
