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In a record year, natural and organic products passed $250B in 2020
For NBJ, March represents the time of year when our first updated natural and organic market estimates are unveiled to the industry. 2020 marked a record year in many ways, including for natural and organic products, which hit estimated growth of 12.7% and passed $250 billion in annual sales.
Natural, organic and functional food and beverage, which represent about 70% of total industry sales, rose approximately 13% to reach $186 billion. Growth in this segment has been outpacing conventional food and beverage for over a decade, but the gap was much more slim in 2020 than previous years due to COVID-19 and subsequent quarantine, with conventional food growth at an estimated 10%. Functional food and beverage, a subset of the total food and beverage market, saw an estimated boost in growth to 9.4%, driven by immunity ingredients, collagen, adaptogens and healthy fats.
Supplements shone through as a bright spot as well, with current estimates of 14.4% growth, the highest growth the industry has seen since its infancy, bringing annual sales past $56B. Not surprisingly, immune health and general wellness were the largest drivers in the supplement market, with strong growth in all vitamin categories and across herb and botanical formulas.
Looking across all markets, it is impossible to ignore the accelerated shift toward e-commerce, and the natural and organic industry is no exception. NBJ is currently projecting that e-commerce sales growth spiked above 58% in 2020, representing a permanent channel shift across many categories. In fact, with the current growth projections, total e-commerce sales for our industry are expected to double by 2023.
While the impact of 2020 on the natural and organic products industry certainly varied across channels and markets, the overall effect is projected to lead our industry to now surpass $300B in just a couple years.
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| | Claire Morton Reynolds
Claire Morton is the Senior Industry Analyst for New Hope Network's Nutrition Business Journal. She manages NBJ's data and insights to inform the industry on market trends and forecasts in natural and organic food and beverage, functional food and beverage, dietary supplements and personal care. |
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