Business Plan - Did you hear?...Global retail sales of organic cotton products up 63 percent in '08

Thanks to global brands and retailers, such as Nike and Pottery Barn, retail sales around the world of organic cotton apparel and home textile products shot up 63 percent in 2008, according to a recently released report from Organic Exchange.

That year, sales reached $3.2 billion compared to $1.9 billion a year earlier, as reported in the non-profit’s "Organic Cotton Market Report 2007-2008."

Contributing to that leap are also outdoor industry brands like Patagonia, a pioneer in using organic cotton in the early 1990s, even switching to it exclusively in 1996 for all its cotton apparel. In 2005 and 2006, Patagonia was on the Organic Exchange’s top five list of programs, but has been bumped down the list as larger, more mainstream players have entered the market.

Now, among the top 10 organic cotton-using brands and retailers globally were five U.S. companies: Wal-Mart, Nike, Anvil, Pottery Barn and Greensource. Elsewhere, they included C&A in Belgium, H&M in Sweden, Zara in Spain, Coop Switzerland and Hess Natur in Germany."

The most important news surrounding this figure is the fact that organic is no longer a novelty. With Volcom, Billabong, Nike, Marks and Spencer, H&M and others all selling organic now, the general public is learning the benefits of organic, the perils of traditionally grown cotton, and making the connection between health, the environment and their wallets," Jen Rapp, a spokeswoman for Patagonia, told SNEWS®.

Rapp noted that Patagonia believes 2008's massive sales growth is a result of widely known brands, such as Wal-Mart, selling organic to their large customer bases.

"The beauty is that with brands such as Wal-Mart on the organic cotton bandwagon, and the number of farmers that are switching to organic farming, the cost of organic is going to continue to become more and more affordable, allowing this growth to continue in the current economy," she said.

The Organic Exchange found in its research that most brands and retailers selling organic cotton products remain committed to their sustainability plans and upbeat about market growth. They reported they have plans to expand their product lines 24 percent and 33 percent in 2009 and 2010, respectively. It estimates that the segment will be a $4 billion market in 2009 and a $5.3 billion market in 2010.

Additionally, the organization's "Organic Cotton Farm and Fiber Report 2008" reported that the number of organic cotton farmers grew worldwide by 152 percent in 2007/2008. Organic cotton production hit 145,872 metric tons, which is equivalent to 668,581 bales (a bale is 480 pounds). It was grown on 400,000 acres in 22 countries worldwide.

During 2008, the report noted, certified organic cotton fiber supplies grew by 95 percent, significantly higher than annual growth rates of 45 percent in 2006 and 53 percent in 2007.

"Farmers who planted on speculation or expanded without market partners may have shifted the market into a state of oversupply in 2009," said LaRhea Pepper, Organic Exchange's senior director, in a statement, noting that the non-profit strongly discourages farmers from taking this kind of risk.

"Brands may want to explore opportunities for expanding their organic programs with their business partners, as for the first time in many years, supplies of organic fiber, yarns, and fabrics are more available than in previous years," Pepper added.

Founded in 2002, Organic Exchange (www.organicexchange.org) facilitates expansion of the organic cotton fiber supply by working with the entire chain of supply, from farmers to retailers, to help develop organic cotton programs.--Wendy Geister