Organic is Looking Good

By Gary A. White (gary@pchelle.com)
President, P’Chelle International

According to the Organic Trade Association’s 2012 Organic Industry Survey, U.S. organic food sales in 2011 were $29.2 billion, an increase of more than 9% from the $26.7 billion of 2010. Organic food share grew to 4.2% of total food sales in 2011, which was up from 4% in 2010. In 2001 it was a measly 1.4% of total food sales. My, oh my how this industry has grown! U.S. organic food sales had annual double-digit sales growth from the years 2002 – 2008 before slipping to 5.3% in 2009 and 7.8% in 2010.

Fruits and vegetables accounted for 40.5% of all U.S. organic food sales in 2011. Other categories included dairy (14.6% of U.S. organic sales), packaged/prepared foods (13.6%), beverages (12.1%), bread and grains (10.7%), snack foods (4.5%), condiments (2.1%) and meat, poultry and fish (1.8%). Although it was the smallest category, organic meat, fish and poultry sales grew by a whopping 13% over 2010. U.S. consumer sales of organic products overall, including food and non-food products, accounted for $31.4 billion in 2011 sales, an increase of 9.5% from the $28.7 billion in 2010. U.S. sales of conventional food and non-food items grew 4.7% in 2011. The survey predicts that food and non-food sales in 2012 and 2013 will continue to grow at 9% or higher, with 94% of organic operations nationwide planning to maintain or increase employment in 2012.

Taking advantage of the organic industry’s continued prosperity, Annie’s, Inc., Berkeley, California raised approximately $95 million in an Initial Public Offering (IPO) in March, with shares opening at $19 each and closing at $33. The company’s New York Stock Exchange ticker symbol is “BNNY” (excuse me while I check my portfolio). For the year ending March 31, 2011, the company’s net income more than tripled to $20.2 million and revenue in the nine months ending December 31 grew by 21% to $98.3 million.

Production Up, Acreage Down

Here, on the home front (at least, my home front) sales from organic acres in Washington State have increased, even though the actual acres dedicated to organic farming have decreased. According to a recent study by the Washington State University Center for Sustaining Agriculture and Natural Resources, the value of certified organic crops in the state rose 16% in 2010 to $244.6 million, while total organic acres dropped from 104,962 in 2009 to 89,186 in 2011. The “hot” organic counties in Washington State are:

• Grant County: 22,296 acres (25% of the total)…..$64 million in sales
• Benton County: 8,699 acres (10% of the total)…..$22 million in sales
• Franklin County: 3,320 acres (4% of the total)…..$13.2 million in sales
• Walla Walla County: 2,328 acres (3% of the total)…..$20 million in sales

Fortunately, all of the counties listed above are close to Blue Mountain Station, providing an amazing source of raw products for our food processing tenants.

The Summer Fancy Food Show, June 17 – 19, 2012 in Washington, D.C. is rumored to be nearly sold out. Expectations are for approximately 2,400 exhibitors, representing 80 countries and 180,000 products. I will be there representing, what else, Blue Mountain Station. Amidst all the electioneering let’s talk about something really positive and constructive – how you can grow your food/beverage processing operation by expanding to Blue Mountain Station. Call me for a meeting during the Show at 509-539-3575 or send me an email at gary@pchelle.com.