US organic beverage market growing steadily – milk and coffee still lead the way

Posted by James Ferre on 9th October 2008

Consumer interest in beverages and food produced without toxic chemical pesticides, synthetic hormones, artificial ingredients, antibiotics or preservatives have turned the United States into the world’s largest market for organic products. The organic beverage market remains rather small, Beverage Marketing Corporation’s new ‘Organic Beverages in the U.S.’ report reveals, but it enjoys fierce growth and an expanding presence in mainstream retail outlets.Indeed, the organic segment achieved significant growth in multiple beverage categories in recent years. Overall organic beverage volume escalated by nearly 20% in 2007, according to Beverage Marketing data. However, organic beverages represented only 1.4% of what Americans consumed during the year.

Coffee, the largest organic beverage category in the United States, accounted for more than one-third of total organic beverage volume. Organic coffee outperformed the overall market, growing by 24% from the 2006 level.

Milk stood second in size with 31% of the organic total. Unlike the overall milk category, organic milk not only grew; it grew vigorously, extending a multi-year streak of double-digit percentage growth rates with a 26% increase in 2007.

Only one other category – soy milk – could claim a double-digit share of U.S. organic beverage volume in 2007. It accounted for more than 28% of the total. One of the more established parts of the organic marketplace, soy no longer sees the sorts of astronomical growth typical of some other segments where organic entrants are relatively new. However, it distinguished itself as the only beverage type with a majority of its volume qualifying as organic.

Other organic beverage types noteworthy for exceptional enlargement include carbonated soft drinks, which rocketed ahead by more than 40% in 2007, and fruit beverages, which leapt forward by more than 50%. Both of these categories have much larger non-organic volume prone to contraction rather than expansion. Energy drinks, which have been growing both in and out of organic environments, achieved the most spectacular growth of the ten categories considered in Organic Beverages in the U.S. Organic energy drink volume increased by more than 60% in 2007.

Organic players in the soft drink, juice and energy drink sectors remain niche, however.

Major American retailers such as Wal-Mart and Safeway have entered the organic arena by developing their own organic offerings and encouraging beverage companies to do so. And beverage companies large and small have responded, with statistics showing hundreds of new organic beverage products are entering distribution channels annually.