High Prices Nibbling At Growth Of Organics?

High gas and food prices appear to be nibbling away at the high growth rates that have long been enjoyed by organic and natural food makers and sellers, USA Today reported.

Sales growth in this segment has slowed, but remains strong because of the loyalty of core organic buyers, some industry executives say. They also say new customers are tougher to attract, given that organics can cost 10 to 50% more than non-organic rivals.

"Most of us are seeing slightly slower growth, but we’re still seeing growth," Gary Hirshberg, CEO of organic yogurt maker Stonyfield Farm, told the national newspaper.

Hirshberg expects 18% revenue growth this year, up from 16% last year but down from 24%-plus in past years. Others also recently reported slower growth than Wall Street analysts anticipated, including Whole Foods Market, the largest retailer of organic and natural foods, and Lifeway Foods, maker of dairy drink Kefir, USA Today reported.

In a weak economy, "new organic customers will be more cautious," said George Siemon, CEO of Organic Valley Family of Farms, the USA’s largest cooperative of organic farmers.


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