California sees record sales in organic processed products

In 2017, gross sales of organic processed products in California reached $11.65 billion, according to the California Department of Public Health’s (CDPH) annual Organic Processed Product Registration Program Report. The 2017 processed products sales are up 17 percent from the $10 billion in gross sales in 2016.  

CDPH’s annual organic processed product report gives a unique insight into the thriving organic processing sector. As the only state with mandatory registration and sales reporting requirements for organic producers, California is also the only state systematically tracking the rise in organic food sales. Coupled with the Organic Trade Association’s Organic Industry Survey 2018 finding that the U.S. organic sector grew to $49.4 billion in sales in 2017, CDPH’s annual organic processed product report shows that the organic sector continues to flourish in a competitive market.

Organic farm gate sales are also up in California. According to the 2016 USDA National Agricultural Statistic Service’s (NASS) 2016 Certified Organic Survey, California grows 88 percent or more of the domestic supply of many crops such as artichokes, broccoli, cauliflower, celery, citrus, avocados, figs, olives, almonds, and pistachios. NASS is currently working on its 2017 Certified Organic Survey, which will provide updated numbers on the total percentage of California’s organic sales. Using NASS’s 2016 data and CDPH’s 2017 data, California’s sales add up to $14.55 billion.

Despite these strong growth trends in processed product and farm gate sales, certified organic agricultural land still hovers at just 3.5 percent of California’s overall agricultural land. Organic food manufacturers and retailers are sourcing organic from more producers abroad to fill consumer demand and meet their company’s need for organic ingredients.

“With the increase in sales of organic processed products comes an increase in the need of organic raw commodities of all types,” says Jeremy Johnson of Traditional Medicinals. “Hopefully these numbers will demonstrate to conventional processed product brands the value of organic products, and perhaps even convince conventional farmers to transition to organic to support the growing organic processed product sector.”

Almonds are an example of a crop where California is missing out on the benefits of organic production. According to the Almond Board of California’s Almond Almanac 2016 Annual Report, California produces the entire commercially available domestic organic almond crop, and in 2016 produced $32 million in sales. The Almond Board of California reports that there are 130 million almond trees on 1.1 million acres in California. However, the 2016 NASS survey lists less than 6,000 acres of almonds as certified organic.

This discrepancy is not unique to almonds. In California, less than four percent of farmland is certified organic. To meet consumer demand, the U.S. imported over $39 million in organic almonds from Spain and Italy in 2016, and over half of all imported almonds over the last three years were organic, according U.S. Organic Trade Data: 2011-2016f rom the Organic Trade Association.

While the organic sector has more work ahead to advance organic agriculture and encourage the transition of conventional agricultural land to organic production, it can also celebrate the impact of organic food sales in California and beyond.

As Johnson puts it, “The latest numbers further demonstrate the impact processed products have in bringing organic into the homes of more consumers, as well as providing economic value to the state.”

This article was prepared by CCOF’s Policy Director Kelly Damewood and Peter Nell, CCOF’s Policy Specialist.