Market analysis from Technavio estimates the organic packaged food market in the U.S. will grow at a CAGR of over 3% between 2016 and 2020. The increasing concern among consumers over the extensive use of additives and preservatives in processed food products like dairy and bakery is the fundamental driver for the market, according the company. Additionally, the growing awareness of the health benefits of organic food is augmenting the preference for foods that are prepared without using any artificial colorants, flavors, or other unhealthy food additives. Technavio’s research points to the upsurge in the demand for organic baby food and increased shelf space for organic food among retailers as factors that will propel the market during the forecast period.
 
In 2015, the supermarkets and hypermarkets distribution channel dominated the organic packaged food market in the U.S. with a market share of almost 73%. The high penetration of organized retail coupled with the steady increase in the number of supermarkets and hypermarkets is likely to fuel the growth of this segment during the forecast period.
 
“The latest ongoing trend in the market is the interest in organic food exhibited by large retailers. The increasing demand and consumption of organic foods have encouraged large-scale retailers to venture into the organic packaged food market in the US. Retailers such as Walmart, Kroger, and Safeway are making their way into the organic food market which was initially limited to a few major players like Whole Foods Market and Organic Valley Family of Farms,” said Vijay Sarathi, Lead Analyst, Food & Beverages, Technavio Research.
 
Currently, the organic packaged food market in the U.S. is led by the organic dairy products segment with a market share of almost 23%, and is expected to witness steady growth in the coming years. The growth of this segment is augmented by increasing health awareness and the preference in consuming unadulterated and nutrient-rich dairy products. In 2015, organic milk accounted for more than three-fourths of the organic dairy products market. Factors such as retailer support, new scientific exploration and its capacity to result in game-changing consumer-health claims, favorable government policies, and brand communication are expected to reflect positively on the market growth by 2020.
 
The key vendors in the organic packaged food market in the U.S. are Amy’s Kitchen, Nature’s Path Foods, Newman’s Own, and Organic Valley. Owing to the presence of several large and small-scale vendors, the organic packaged food market in the U.S. is highly dispersed and fragmented. Though economic development and the increased consumer spending for organic foods account for the market’s growth, factors such as brand recognition, product pricing, and portfolio help in increasing sales and boosting a vendor’s share in the market.
 
A more detailed analysis is available in the Technavio report, Organic Packaged Food Market in the US 2016-2020. The new market research report from Technavio presents a breakdown and analysis of the packaged food segment by product.