COVID-19 Accelerates the Demand for Organic Food as Sales Accelerate
On Thursday, July 16, the US Commerce Department released its Advanced Retail Sales data which showed that Grocery Store sales rose 11.6% year over year. This compares to a 13% rise in May, a 14% rise in June, and a 31% climb year over year in March.
*Source St. Louis Fed
Despite the strong retail sales seen in grocery stores in June, the number pales in comparison to the rise in retail sales for specialty foods. The Jacobsen has been reporting stronger than normal demand for premium foods over the past 3-months, that should spill over into the feed market especially, organic dairy, organic eggs, and organic poultry. This information was echoed today in an article in Bloomberg.
Bloomberg is reporting that American’s are buying more premium foods including organic meats and snack foods. This phenomenon is driven by demand for health-conscious foods and drinks despite a rise in unemployment driven by COVID-19.
According to Bloomberg, “US. Sales of organic food and drinks surged 25% during the 17-week period ended June 27” siting Nielsen Data. “Foods with an organic label in the meat, seafood, and frozen foods subcategory have seen the largest increases year over year.”
This strong demand is expected to remain in place for the balance of 2020. The Jacobsen forecasts that organic dairy, poultry, and egg demand to rise 20% year over year for the 12-months ending December 2020.
Additionally, the demand for organic products is adding new branded products to the market. For example, the number of products that contain organic eggs has increased approximately 20% year over year as of July 2020 according to The Jacobsen. The strong gains in organic food demand for animal proteins (eggs, poultry, dairy) have yet to spill over into organic feed demand (organic corn and organic soybeans), but if this phenomenon continues through the autumn it eventually will.
This article was originally posted on FX Empire
