Spotlight on Organics: Positives abound

In an industry hit by rising inflation, soaring input costs, and labor shortages, the organics category continues to surprise and delight.

Far from being pummeled by outside factors, the segment recorded a strong 2024 with bananas, berries, and other products contributing to a year of positive growth compared with 12 months before.

According to the Organic Trade Association’s 2025 Market Report, organic produce sales climbed 5.2 percent to $21.5 billion for 2024, with berries leading the way posting an 18.6 percent share of overall sales.

Bananas were another stellar performer with sales growing 15.5 percent. Apples, especially newer varieties like Cosmic Crisp and Envy, along with tropical fruits, namely mangos, pineapples, and kiwifruit, had strong showings as well.

Growth Trajectory

For David Posner at Santa Cruz, CA-located Awe Sum Organics, Inc. BB #:157008, the last 12 months have been largely positive.

The company specializes in importing organic fruit, including table grapes (some volume comes from California growers), as well as kiwifruit, pears, and berries.

“The demand for organic fruit is good and keeps growing year-over-year,” he shares. “There were so many years when it was double-digit growth, now it’s more like 5 percent, but the demand for organic continues to grow.”

Elise Smith, marketing manager at Porterville, CA-headquartered Homegrown Organic Farms BB #:161459 agrees, noting the past year brought growth across every category of the company’s business, even amid ongoing challenges.

“Despite unpredictable weather and ongoing labor pressures, we’ve remained committed to supporting our growers, delivering high-quality organic fruit, and serving our customers with excellence,” she says.

Fantastic Fruit

As mentioned, organic fruit continues to soar in popularity, including both domestically grown and imports.

Awe Sum Organics imports from multiple countries, including table grapes from Peru and kiwifruit from New Zealand. Posner says he pioneered a method for growing organic grapes with no dormancy, so product is available for export to the United States in the winter months.

Awe Sum also markets organic pears sourced from Argentina’s Rio Negro Valley between late February and early June, which Posner calls “some of the best-eating pears in the world.”

Organic kiwifruit has become a big deal too, especially with the introduction of Zespri’s SunGold variety.

“SunGold has totally invigorated the kiwifruit category and consumption in the United States,” Posner enthuses, “it’s one of those varieties you might not be able to improve on for 50 years or more.”

Overall, he says Awe Sum has a year-round supply of organic green Hayward kiwifruit from California, Italy, and Greece, plus 10 months of SunGold imported from New Zealand.

Similarly, Homegrown Organic’s core commodities include kiwifruit, berries, citrus, grapes, and more.

Smith is particularly excited about a kiwi berry line launched in 2024 called Pranksters. “It’s a playful brand for a uniquely sweet and snackable fruit that’s gaining traction with both retailers and consumers.”

The grower-shipper, which has focused on organic farming for over 25 years, has roots in California and Oregon, but also partners with growers in Mexico, South America, and New Zealand for year-round supply.

Vexed Vegetables?

One area that has struggled in organics is packaged salads, with sales decreasing 4.5 percent over the period. Sales of lettuce and other greens grew by a sluggish 0.8 percent.

Darrell Beyer, founder of Bluebird Mountain Organics BB #:385956 in Washoe, NV, near Reno, says the past year has been decent, despite difficulties. “Considering how bad markets have been, I feel my business is trending in the right direction.”

As a specialist in wet vegetables (celery, green onions, leeks, kale, parsley, spinach, baby broccoli, and more) Beyer believes demand for organic vegetables in particular has been dampened.

“People are spending less on the things they don’t necessarily need,” he says, noting consumers are balancing costs with tight budgets and looking to reduce waste.

Fortunately, Beyer says volume overall isn’t down year-over-year, but rather sales have been more spread out, resulting in a generally positive 12 months.

George Agorastos, who has responsibility for organic produce at Rio Rico, AZ-based Arizona Sky Produce, Inc. BB #:269869, says the importer/exporter has seen a steady increase in organic sales growth during the past year.

His success stories include both fruit and vegetables, led by zucchini, oranges, and hard squash. Arizona Sky recently added honeynut hard squash, which Agorastos says is like “a sweeter butternut.”

Sourcing the vast majority of its organics from Mexico, but with the United States a close second, Agorastos says Arizona Sky is also experiencing strong demand for organic watermelon and table grapes, although he perceives a shift to other options related to size.

“Some buyers are focusing on a more value-based size instead of a premium size, while others prefer to stick to the biggest and best,” he says.

On the Herb Side

Of course, the organics segment doesn’t just cover fruits and vegetables.

Dosner Organic Farms BB #:356798, based in Commerce, CA, is an organic culinary herb grower handling over 20 different varieties, including those produced by sister companies and partners in the Fillmore and Santa Paula, CA areas, and outside the United States in Colombia.

One of those sibling companies, Nature’s Delight Organics, has 110 acres for organic growing, according to chief executive Silvia Jackson, who says business has been steady over the past year.

Handling 80 percent organic and 20 percent conventional, Dosner has seen solid demand for basil, mint, thyme, rosemary, and oregano, while an expansion into summer vegetables could be on horizon.

That being said, Jackson admits Dosner’s profits have been affected by higher labor and packing material pricing, and general economic conditions.

“It’s very costly to grow organic—but our market is organic and we have to continue growing and sourcing organic,” she points out.

“One of the bigger hurdles has been, as a grower and packer, big chain retailers lock you into one- or two-year contracts.

“These retailers raise their prices to consumers but will not allow us to increase our prices to their stores,” Jackson continues. “We do all the hard work, and we’re the ones who end up with the lower profit at the end of the year.”

Mixed Bag Challenges

In common with the rest of the fresh produce industry, rising input costs, water shortages, and labor challenges continue to impact organic operations, as well as economic uncertainty.

Homegrown Organic Farms has been dealing with higher costs and labor issues but Smith says the company remains committed to organic agriculture and is considering ways to expand its programs.

Posner from Awe Sum agrees labor, packing supplies, and the on again-off again tariff situation are challenging, but says the overall commercial picture remains positive.

“We focus on having supply to complement domestic,” he explains, and although there are tariffs, they have yet to have a material impact.

He points instead to the organics category’s ongoing strength. “It’s still growing at 5 percent.”

For Blue Mountain, which sources from California and Mexico, the company has not run into labor, water, or other difficulties. In fact, he says Bluebird’s partners in Mexico have invested in desalination plants to ensure access to water.

For Colo-Pac Produce, Inc. BB #:140581, a repacker of organic tomatoes mostly sourced from its local area in Denver, CO, Tony Garin, vice president of sales, mentions two factors having an effect on the industry: ongoing consolidation and inconsistent supply at retail.

“Before people used to not tolerate having short supply, but that whole mentality has changed post-Covid,” he observes.

Although the organics industry continues to face some availability issues of late, Garin believes demand will remain in place. “Consumers are trying to be more aware and trying to choose products with less chemicals.”

Smith at Homegrown agrees, citing increasing consumer interest in transparency, sustainability, and the health benefits of their food choices.

“There’s also a growing interest in understanding the people and purpose behind the produce, which aligns with our values,” she observes.

“We see opportunities in organic snacking fruit, sustainable packaging innovations, and continued education around the benefits of organics for people and the planet.”

Future Outlook

For those who handle organics, the positives still outweigh the negatives. 

“The organic fresh fruit segment is just going to continue to grow,” predicts Awe Sum’s Posner. “It’ll keep evolving as far as the amount that can be sold into the market, but also I think sustainability and sustainability certification will be more of a focus.”

Smith at Homegrown also predicts further growth. “We see opportunities in organic snacking fruit, sustainable packaging innovations, and continued education around the benefits of organics for people and the planet.”

For Arizona Sky’s Agorastos, the best growth opportunities involve more availability from all shipping points to accommodate wholesale and retail buyers.

“Instead of having to purchase from multiple shipping points making it harder on trucks and adding to additional wait and expense, if growers were spreading their items between McAllen, Nogales, and San Diego,” he suggests, “you’d have a better opportunity to move more volume, especially with organic-conscious buyers.”

Beyer believes the future of organics may have risk, but there are ways to mitigate the negatives and heighten the positives. With fruit dominating sales, planting less vegetable acreage could be a good strategy.    

“If you decrease your plantings, you’re still going to win because the demand will be up and the markets will be higher.”