Not Just Whole Foods: Increased Competition Makes Organic Food Cheaper

Despite the rising cost of food, the organic food industry continues to thrive. According to the Organic Trade Association's latest data, sales of organic food in the United States accounted for $29 billion in 2012. Meanwhile, the Department of Agriculture estimates that the organic sector could experience double-digit growth, with sales topping $35 billion by year's end.

And with new contenders entering the arena, the organic food industry — which was once dominated by premium stores like Whole Foods — could finally see some serious competition. For consumers, that translates into more affordable prices.

Whole Foods' Pain is the Consumer's Gain

At the center of the organic movement is Texas-based Whole Foods. Once the dominant chain in a sparse field, the high-end grocer recently trimmed its annual sales and profit forecasts as it struggled to expand in the face of stiff competition. During a recent earnings report, Co-CEO John Mackey said the company would increase its effort to promote flash sales.

However, Whole Foods' recent losses didn't occur overnight. They're due in part to competition from the likes of Walmart, Kroger, and Target. These big-box retailers are disrupting the industry by making a once niche product go mainstream. And that's a good thing for shoppers because with increased competition comes better prices.

Walmart, for instance, has teamed up with organic brand Wild Oats and is selling its line of organic products at 25% less than other national organic brands. This includes everything from canned vegetables to spices. In a blog post, Walmart reiterated its commitment to organic by saying it would use its scale as the nation's largest grocer to deliver organic groceries to its customers for less, creating a win-win scenario for customers and Walmart's suppliers.

But for the moment, organic food is still costlier than non-organic food. And with studies that are for and against organic produce, it's consumers who will ultimately dictate where the market goes. Which begs the question: are you willing to pay more for organic food, or do you shop for the most affordable food you can find?