Slowed Growth Spooks Organic Industry

(MoneyWatch)  The Organic Trade Association says the massive marketing campaign it announced this week has been in the works for years and is not a direct result of the current economic crisis.

But Marcia Mogelonsky, who authored a recent Mintel report saying growth in the organic industry has slowed, isn't buying it.

"Yeah, it was on their radar screen but they didn't feel the urge to do it until right now?" she said to BNET. "They're not doing that because they're bored; they're doing that because they're afraid."

Sales of organic products are still rising; they're just not rising as much as they used to be. "You're going from like a 22, 23 percent annual increase to like a 15 percent," Mogelonsky said.

"We're very much a part of the overall economy so downturns in the economy are of course going to have an impact on us," said Organic Trade Association's Sue McGovern. But she also said the study may have overestimated the downward trend in industry growth because it didn't take private labels into account.

Supervalu this year launched its own organic brand, Wild Harvest, joining Safeway, whose O brand has been on the shelves since 2005. Store brands have been thriving lately, and that's likely to include organic brands. "Our own brands are growing three to four times that of branded products," a Whole Foods spokeswoman told a McClatchy reporter.

Mogelonsky acknowledged that her study did not take into account private label organic brands -- or farmer's market purchases, or anything without a bar code -- but, she added, "I don't think any of those categories have grown enough to really skew the data that much." And a separate survey found that 43 percent of respondents were buying less organic food than before because of the recession.