Health and Wellness Series – Organic packaged food trends in the United States

Overview

The health and wellness industry continues to gain significance in the U.S, particularly in the wake of the pandemic, as consumers have become more aware of the negative health impacts of processed food and a range of drinks. The COVID-19 virus disproportionately affected those with underlying health conditions, such as obesity and diabetes. As a result, people are increasingly seeking out healthier food and beverage options that make a range of claims, including organic, natural, and vegan.

In addition to heightened consumer awareness of the correlation between food and drink consumption and health, there is growing concern about the environmental impact of the food industry. Consumers are also increasingly aware of the role of agriculture and food production in contributing to greenhouse gas emissions and climate change^{Footnote 1}. As a result, they are increasingly seeking out food and beverage options that are environmentally sustainable in the health and wellness category, including plant based organic products.

Retail sales of organic cakes and noodles grew fastest in the U.S. over 2019 to 2023, by 17.0% and 14.5% annually, and are expected to continue to grow fastest over 2024 to 2028, by 33.3% and 18.2% annually. Despite sales exceeding pre-pandemic levels in 2023, sales growth in processed meat is expected to remain positive but slow over 2024 to 2028. This is also the case for ready meals, bread, soup, and sweet spreads. Sales growth in savoury snacks, confectionary, ice cream, and meat and seafood substitutes was negative over 2019 to 2023 but is expected to rebound over 2024 to 2028 to positive territory.

Distribution

Traditional retailers and supermarkets are the main outlets for health and wellness (organic) packaged food sales. Ecommerce sales have grown fastest by 30% annually over 2019-23 as Americans have come to rely on online retailers as a result of the pandemic.

Subsector analysis

Organic ready meals and cooking ingredients

The organic ready meals saw continued annual growth of 6.2% over 2019 to 2023 with total retail sales of US$691.7 million in 2023. Sales growth is expected to expand 2.9% between 2024 to 2028, reaching total retail sales of US$799.2 million by 2028.

Driven by increasing consumer interest in fitness and as consumers are looking for foods to keep them full for longer, high protein diets have been booming in the U.S. Increasing awareness of the links between diet and a strong metabolism is leading more consumers to look for products with targeted functionalities and fortifications, such as high protein, probiotic, or good source of omega 3s. As a result of these trends, high protein maintained high sales and saw continued growth in organic cooking ingredients and meals in 2023.

Sales of organic sauce, dip, and condiments grew 5.6% annually over 2019 to 2023, with total retail sales valued at US$1.3 billion in 2023. This sector is expected to see similar growth over 2024 to 2028 with sales of US$1.5 billion by 2028.

Retail sales of organic soup increased by 8.6% between 2019 and 2023, with total retail sales of US$230 million in 2023. Organic soup sales are expected to see similar growth of 5.4% annually over 2024 to 2028, reaching total retail sales of US$307 million by 2028.

According to Euromonitor, weight management was the most common health attribute used together with high protein in ready meals in 2023, due to the desire of many consumers to lose weight; especially with the rates of overweight and obesity in the U.S. being far above the global average.

Organic snacks

After weak sales during the pandemic, organic snack sales are expected to rebound with consumers returning to their pre-pandemic habits. Consumers are looking for options that are convenient, better for them, as well as better for the environment.

The organic sweet biscuit, snack bar, and fruit snack category saw annual growth of 0.7% over 2019 to 2023 with total retail sales of US$1.1 billion in 2023. Over 2024 to 2028, sales are expected to grow by 5.7% over 2024-28, reaching US$1.5 billion by 2028.

Organic ice cream, confectionary, and savoury snacks saw sales fall over 2019 to 2023 but are expected to rebound over 2024 to 2028. Organic ice cream is expected to see 3.8% annual growth over 2024 to 2028, with total retail sale of US$270 million in 2028. Organic confectionery are expected to grow 3.8%, and savoury snacks by 2.7%.

Organic staple foods

According to Euromonitor, consumers shifting from food as an experience to food as a medicine are expected to pay more attention to macronutrients and their role in different aspects of health, leading to rising interest in whole grain staples such as flour, bread, and pasta, which is expected to drive innovation in these categories. As well, an increase in the desire for protein, associated with certain diets, will also lead to increased demand for processed meat and meat and seafood substitutes. Additional products attracting attention are likely to be those containing high fibre, driven by the whole foods diet trend.

Sales of all organic staple foods are all expected to come down from pandemic induced highs to single digit sales growth levels, except for pasta, which is expected to see annual sales fall by 46% over 2024 to 2028. Retail sales of organic cakes and noodles grew fastest in the U.S. over 2019 to 2023, by 17.0% and 14.5% annually, and are expected to continue to grow fastest over 2024 to 2028, by 33.3% and 18.2% annually. Meat and seafood substitutes experiences negative annual sales growth of 7.4% over 2019 to 2023 but are expected to grow 2.3% annually over 2024 to 2028.

New product launch analysis

From 2019 to 2023, 10,925 organic packaged food products were introduced in the U.S., with the highest number of new products launched in 2020. The most popular product category was seasonings, followed by vegetables and snack/cereal/energy bars. Companies with the highest number of new product launches were Whole Food Markets, followed by Kroger and Lucern Foods. Nearly half of product launches were new products. The top five packaging types were flexible packaging, jar, bottle, and tub.

New product examples

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Resources

• Euromonitor International:
  • Health and Wellness in the United States, August 2024.
  • Health and Wellness Snacks in the United States, August 2024.
  • Health and Wellness Staple Foods in the United States, August 2024.
  • Health and Wellness Cooking Ingredients and Meals in the United States, August 2024.
  • Health and Wellness Dairy Products and Alternative in the United States, August 2024.
• Mintel Global New Products Database, 2024

Health and Wellness Series – Organic packaged food trends in the United States
Global Analysis Report

Prepared by: Kris Clipsham, International Market Research Analyst

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