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Organic & Functional Foods Pump Up Natural Food Sales Natural food makers prepare to compete against mainstream manufacturers.
Consumers are gobbling up record quantities of natural foods, spurring continued rapid growth in the natural foods industry as makers of organic and natural food products are slowly taking a larger bite out of mass market sales. In 1997 $x.x billion in U.S. natural foods sales represented still only x.x% of the $460 billion in total food sales, but growth in consumer sales of natural foods of roughly x% in 1998 (with organics at xx%) compares favorably with overall food sales growth of less than x%. Licking their chops over such success, several of the nation;s largest mainstream food manufacturers, including General Mills, Kellogg, Lipton and Pillsbury's are launching natural products of their own, including organic and/or functional food lines to be sold in supermarkets across America.
NBJ's annual survey of natural food manufacturers revealed that aggregate growth in wholesale sales of respondents was xx% in 1998. Adjusting for acquisitions and some contracting of retail margins accounts for the discrepancy between this and the x% growth figure at retail. For smaller manufacturers below $20 million in sales, growth was an aggregate xx% in 1998, down from xx% the previous year but still very strong. Organic products represented only xx% of all natural food manufacturer sales (excluding dairy), though those with more than xx% of sales from organic products posted significantly higher aggregate growth of xx%.
Organic Sales Heat Up
Organic food manufacturers are relishing exceptionally strong growth fueled by increased consumer awareness of the benefits of organic products, anticipated new labeling regulations and rising concerns over increasing levels of pesticide residues and genetically modified crops in non-organic foods.
We're in the $4.5 billion a year range, reported Bob Scowcroft, executive director of the Organic Farming Research Foundation (Santa Cruz, Calif.). Scowcroft estimated that sales of organic products rose xx% to xx% last year, adding, That's a hell of a lot considering food in general grew x% to x%.
NBJ estimates U.S. organic food product sales at $x.x billion in 1998 as a subset of $x.x billion in natural foods sales. Exports accounted for another $xxx million in organic sales, and organic herbs and other non-food organic products add up to $xxx million to approach FRF's number for the industry.
Packaged Facts (New York), a market research firm, estimates that by 2000, sales of organic foods in the U.S. will increase xxx%, reaching $x.x billion. Brian Sansoni, manager of public policy communications at the Grocery Manufacturers Assn. (Washington, D.C.), predicted, In seven years, worldwide organic sales will likely top $100 billion. Certainly you'll be seeing more brand name manufacturers making their way into it......
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