Ongoing inflation resulted in increased retail costs of natural recent produce through the third quarter of 2022, producing a 4.1 p.c improve in complete natural {dollars} but in addition contributing to a decline of 4.5 p.c in natural quantity in comparison with the identical interval final yr, in line with the Q3 2022 Natural Produce Efficiency Report launched by Natural Produce Community (OPN) and Class Companions.
Total, natural recent produce pricing per pound elevated by 8.9 p.c for Q3 2022 in comparison with the identical interval final yr, with gross sales for the quarter topping $2.4 billion. On the similar time, standard produce’s common worth per pound elevated by greater than 10 p.c, with complete gross sales of $17.93 billion. In complete, general produce division gross sales gained 8.3 p.c in {dollars} for the third quarter of 2022, whereas quantity declined by 1.5 p.c. The typical worth per pound elevated by 21 cents for the full produce division in comparison with Q3 of 2021.
The Q3 2022 Natural Produce Efficiency Report makes use of Nielsen IQ syndicated information to trace and report the efficiency of natural recent produce—and particularly the highest 20 main natural classes. The report means that the rising costs might trigger customers to be extra selective of their natural buying.
“Evaluating the third quarter of this yr to 3rd quarters of the previous three years reveals natural quantity declining—and greater than three share increased than the decline in standard produce quantity for Q3 of 2022,” stated Tom Barnes, CEO of Class Companions. “Typical produce outperformed natural produce in greenback development, suggesting worth will increase in standard produce have been extra simply absorbed by customers than the upper costs in organics.”
Natural apples and lettuce had been examples of product substitution from natural to standard by customers as their worth per pound of natural elevated by greater than double the quantity of standard. This resulted in a quantity decline as excessive as 15 p.c.
A shiny spot for natural gross sales in Q3 of this yr was the tomato class, which noticed a powerful 19 p.c improve in quantity and a staggering 30 p.c improve in {dollars}. In complete, 14 of the highest classes posted year-over-year will increase in {dollars}, with potatoes, onions, and peaches displaying double-digit good points. Conversely, apples posted the most important decline in greenback gross sales, with lettuce and bell peppers additionally displaying noticeable declines.
Berries and packaged salads proceed to be the highest two natural produce classes, accountable for almost 40 p.c of all natural produce {dollars}.
Whereas natural costs in mixture stay considerably increased than standard (by $1.55 per pound in Q3 2022), the typical worth of each standard and natural produce has elevated. When in comparison with Q3 of final yr, natural pricing per pound has risen 8.9 p.c whereas standard pricing has risen 10.3 p.c. “In Q3 2022, the typical worth hole between standard and organics is the most important it has been within the final 4 years,” stated Barnes. “On this inflationary time interval, will probably be necessary for natural suppliers to know how their pricing impacts substitution conduct amongst varied client demographics.”
Geographically, all 4 areas of the US confirmed constant natural efficiency the place {dollars} grew and quantity declined. The Midwest noticed the bottom greenback development (1.8 p.c) and highest quantity decline (–7.4 p.c), and it was the area with the best worth per pound improve (9.9 p.c). In step with earlier reviews, the South continued to point out probably the most enchancment in yr over yr will increase in gross sales and reduces in quantity for the quarter (5.5 p.c).
Regardless of the minor decline in quantity throughout the nation, OPN co-founder and CEO Matt Seeley is bullish on the long-term prospects for development of natural recent produce. “Inflation and provide chain challenges have impacted pricing within the brief time period; nevertheless, natural recent produce will stay an necessary part of weekly meals buying as customers search for wholesome, secure, and nutritious merchandise for his or her households,” he stated.
The Q3 2022 Natural Produce Efficiency Report covers complete meals gross sales within the US, together with all shops (i.e., supermarkets, mass merchandisers, membership shops, greenback shops, comfort shops, and navy commissaries) over the months of July, August, and September of this yr. The complete Q3 2022 Natural Produce Efficiency Report is obtainable on the Natural Produce Community web site right here.
OPN is a advertising group that serves because the go-to useful resource for the natural recent produce trade. The corporate’s mission is to tell and educate by means of a robust digital presence with an emphasis on authentic content material and complemented by partaking dwell occasions that carry collectively varied elements of the natural produce neighborhood. OPN’s target market consists of natural producers, handlers, distributors, processors, wholesalers, foodservice operators, and retailers. www.organicproducenetwork.com
