CHICAGO — The rotten economy is eating into sales of organic foods as fewer Americans put these often costly groceries on their plates.
Retired school administrator John Frantz recently lost his appetite for organic fruits and vegetables after watching the value of his 401(k) plummet to its lowest level in two years. "I'm probably spending 10 to 15 percent less on groceries than six months ago," said Frantz, 58, of Chicago.
Likewise, Julie Hennessey of West Bloomfield, Mich., no longer buys organic bananas ("you peel them anyway," she said). She now gives a good soaking to less expensive, conventionally grown strawberries to remove any pesticides.
"I didn't look at prices two years ago," Hennessey said, though with her husband an engineering manager in the beleaguered auto industry and the country in a recession, the family's not feeling as financially secure.
Sales figures show that shoppers are having second thoughts about the value of organic foods, particularly fruits, vegetables and meats. But they're not giving up entirely on these products. Hennessey said she still pays a premium for organic cereal and eggs for her 4-year-old daughter, and Frantz said he splurges on organic eggs and dairy products.
Overall sales of organic food are still rising, though the industry's robust growth of recent decades is tapering off, analysts said.
Cassie Green, owner of Green Grocer Chicago, said her sales have been flat in recent months, after a period of steady growth when the store opened in January. "The same amount or more of people are coming in, but they're buying less," Green said.
Market research firm NPD Group said the number of people who reported buying organic products fell 4 percent in August, compared with a year earlier. While more than one in five surveyed in the latest figures available from NPD purchased organic products, the August data represented the first customer losses for the sector since February 2006 — a decline that is expected to accelerate in the months ahead.
Despite the challenges, the Organic Trade Association forecasts sales of organic foods will rise by 18 percent a year, on average, through 2010. The association expects its customer base to grow on the assumption that prices will drop and mainstream retailers will stock a wider variety of products.