Organic and Conventional Potatoes : Pricing and Demand , 2000 - 2005

In the past decade, the US organic food industry has grown nearly 20% annually. The Organic Trade Association reports that sales of organic foods in 2005 accounted for nearly 2.5% of total US food sales (OTA 2006) (see figure 1). Not surprisingly, sales of organic foods at natural food stores such as Whole Foods Market and Wild Oats increased through the first half of the 1990s. In 1995, however, sales at this type of specialty outlet peaked at 68% of total organic sales, while conventional food retailers grabbed a larger share of the growing market. By 2005, the natural food stores' market share had dropped to 47% of sales, while conventional retailers increased their market share from 33% in 1995 to 46% in 2005. This trend is expected to continue, as Wal-Mart, now the nation's largest grocer, and Target announced a major move into the marketing of organic foods (Mitchell 2006; Pollan 2006). These and other retailers will put downward pressure on organic food prices, making them more accessible and affordable to the tens of millions of Americans who are not currently part of this market (Pollan 2006). As the trend of increased organic food sales continues, people in the industry and policymakers can benefit from a better understanding of market impacts on competing food groups. Organic foods and beverages are available in nearly every category of food sold in the US, and fresh FSRG Discussion Papers offer insights into ongoing FSRG research. Comments are encouraged; please email the authors below or [email protected]. Views, interpretations, recommendations, and conclusions expressed are those of the authors and not necessarily of supporting or cooperating institutions.