CHICAGO, Ill. (Reuters) – The wave of organic packaged foods may have crested at mainstream retailers.
Organic foods and beverages are pulling back from startling growth levels in recent years and settling into a small niche space at mainstream retailers, food industry executives and analysts said.
The recession put a halt to the double-digit sales growth organic foods saw earlier last decade. But even when the economy improves, organics are not likely to rebound because consumers and retailers have other priorities for spending and shelf space.
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Greg Pearlman, managing director of the U.S. food and consumer group for BMO Capital Markets, said he did not see a big play for organic space.
Health and wellness is still expected to be a big trend in the food industry, analysts and executives said at the Reuters Food and Agriculture Summit in Chicago. But that interest will be spread across items like those with lower sodium, reduced calories and even a focus on removing allergens from food.
“Retailers are looking for the best assets for the limited amounts of space” they have, said Ken Harris, chief executive officer of consulting firm Kantar Retail.
Some organics and their less-regulated cousins, natural foods, may be losing out in that battle for shelf space, he said.
