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This Year's Thanksgiving Dinner Will Be More Organic -- and More Expensive

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It's true that it's costing Americans more to put food on the table these days, but the growth of the organic food industry signals a silver lining.

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The US Department of Agriculture (USDA) didn't implement organic food standards until 2002, but it's safe to say that when President Lincoln deemed Thanksgiving a national holiday in 1863, Americans were eating free-range turkey. It wasn't until the food industry became a model of mass production in the 1950s, a paradigm furthered by genetic engineering and government subsidies, that Americans' eating habits became "unhealthy" – although a climb in organic and locally grown food sales is indicating a reversion to simpler times.

Organic food sales make up a small segment of the market–only 3.7%–but the sector is growing at a much faster rate than the "conventional" food market. Through its "2011 Organic Industry Survey" the Organic Trade Association (OTA) was able to report that organic food sales in the US grew 7.7% in 2010, to more than $26 billion – a trend that's expected to continue through 2015, when it's anticipated sales of natural and organic food and beverages will reach $78 billion.

While discussions as to whether buying organic is worth it are ongoing, they don't trump the fact that American consumers believe it is; according to the OTA, 78% of American families are buying organic foods. Given that organic products can cost more, that's an impressive statistic during such tough economic times. So to what does the organic food industry owe this allegiance?

Well, there's no way to avoid news of America's obesity problem, other than avoiding the news. Movies like King Corn and Food, Inc. have graphically educated audiences on good vs. bad food. First Lady Michelle Obama has made it a top priority to get Americans healthy with her Let's Move! campaign – revamping school cafeteria menus and planting the first vegetable garden at the White House since WWII. And the issue of skyrocketing healthcare costs has also generated a shift toward making America less of a fast food nation.

To that end, fast food chains like McDonald's (MCD) are heeding the call to action. This past July the company announced its "Commitments to Offer Improved Nutrition Choices" – a plan that garnered praise from Mrs. Obama. After all, Americans' poor food choices are often blamed on the inaccessibility and expense of healthy food.

But increasingly, eating healthfully doesn't mean eating high-end. Wal-Mart (WMT) has provided a selection of organic and locally produced foods since 2006; in January of this year the company pledged to expand access to low-cost, nutritious food. Target (TGT) offers affordable organic food selections through its Archers Farms brand. On its website, Safeway (SWY) states that "great tasting organic food should be available to everyone and sold everywhere at a great value;" the supermarket sells it through its O Organics product line.

Whole Foods Market (WFM), the natural and organic foods retailer that once upon a time earned the snarky nickname "Whole Paycheck" due its products' perceived high price point, expanded its private line of more affordable foods during the recent economic downturn and, according to CEO John Mackey during the company's positive fourth quarter results call, will open more stores in 2012. It's not just traditional retailers that are benefiting from this consumer trend.

Per a just released agency report, the USDA estimates that the sale of "locally grown" foods will reach $7 billion in 2011, after hitting a much higher than expected $4.8 billion in 2008. These figures include sales to restaurants and retailers like Wal-Mart, in addition to produce sold at farmers markets. Food grown locally isn't always organic, however it's in season – the way nature intended for us to eat. And while not all sellers of local produce are non-corporate entities, small farms have received a boost.

The picture isn't totally rosy. According to a recent news item, it will cost Americans about 13% more to prepare a Thanksgiving feast this year, and the USDA expects the Consumer Price Index for food to remain relatively high. Still, the holidays are supposed to be a festive time, so why not focus on the positive?

The growth of the organic food industry means job creation. Greater availability of natural food products may lead to a healthier citizenry and a reduction in healthcare costs. And many practices associated with organic and locally grown foods are better for the environment. Just a reminder that amidst all the economic doom and gloom, there are still a few things to be thankful for.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
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