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Retailers fighting for their organic share

Americans' enthusiasm for all things health and wellness is expressed in the food they consume, and natural and organic retailers are often at the forefront of meeting this demand. Packaged Facts' national consumer survey data published in the new report Whole Foods, Trader Joe's, and Natural Channel Grocery Shopping reveal that at least half of adults somewhat or strongly agree that organic fruits and vegetables — the mothership grocery department of the organic movement — are more nutritious, healthier and taste better compared with their conventional counterparts. Among natural food channel shoppers, this ratio shoots up to three-fourths.

Natural and organic foods have crossed a major threshold and are now firmly established in mainstream supermarkets to meet growing demand. It's a consumer-driven food phenomenon that is several years in the making, noted David Sprinkle, research director for Packaged Facts.

"As early as 2014, it was clear that organic foods had become 'must-have' items beyond the shelves of natural food stores," said Sprinkle. "What this means in 2017 is that natural and organic foods can be found in most supermarkets and supercenters, shifting the competitive paradigm from natural food chains pitted against each other into a broader battle for share of the overall marketplace for natural and organic fare."

What's at stake in this "broader battle" is a natural and organic foods market segment worth almost $70 billion. Packaged Facts estimates U.S. retail sales of natural and organic foods grew 7 percent on a compound annual basis from 2012 to 2016. Growth is expected to reach double digits in the years looking ahead to 2021, far outpacing sales growth for groceries and consumable overall.