Twenty years ago, organic food was a tiny unregulated niche market of mostly fruits and vegetables sold at health food stores and farmers markets. But today, the organic food industry has blossomed into a full-blown powerful segment of the food industry, spanning all food categories and selling in mainstream venues around the world.   

Organic food is produced without the use of pesticides, chemicals, drugs or synthetic materials. To achieve certification, farmers must transition their land over several years, follow guidelines set out by their national organic certifying body, and complete regular compliance audits and paperwork to prove their organic standing. Packagers, shippers, handlers, and producers must also comply with organic standards and have their operations certified organic to maintain the organic integrity of the product.   

This strict process makes it challenging for farmers to become organic, but it also garners them a higher price for their goods. Organic products regularly cost from 10 to 100 percent more than conventional counterparts, making the organic market a lucrative environment for those looking to develop value-add brands, particularly as the food products industry is a relatively flat marketplace.   

Mainstream global food brands, including Kellogg's, Quaker, Campbell Soup, Coca Cola ConAgra Foods and Gerber Products have all purchased or developed organic product lines in the last five years -- Coca Cola owns Odwalla, a maker of organic fruit juices and smoothies; Heinz owns Earth's Best, an organic baby food brand; and Dean Foods owns Horizon, maker of organic dairy products.   

In most cases, the mainstream owners do not brand the product with their corporate logo, choosing instead to maintain the brand perception built around the small organic company persona, which has been shown to have significant appeal to organic buyers. Among product categories, organic produce still garners the highest percentage of organic sales and tends to be the entry point for consumers as they begin to make organic purchases. Organic dairy and meat are also popular, as they must be produced without the use of growth hormones and antibiotics to the livestock. Processed foods, including snacks, desserts, breads and pastas are more slowly gaining in popularity and market share.   

Among the finished organic product categories, products targeted at children are the most popular. Most mainstream grocers, as well as Wal-Mart and Target, now carry a wide variety of organic product lines for children, and offer private label organic brands that have slightly lower prices. In a flat market, these organic food categories represent a window of opportunity for food manufacturers and processors to increase sales through the development of new organic products.