Marketplace - Why price-squeezed consumers still shell out for organic

Episode Date: July 30, 2026

Since 2020, the cost of groceries has risen 26%. But contrary to what you might think, cash-strapped consumers aren’t necessarily staying away from pricier options. In this episode, why Americans are doubling down on organic — even as the cost of their overall grocery haul rises. Plus: Why more customers are choosing chargebacks, what economists predict about inflation two years from now, and how a Maine nonprofit is bringing lobstering to the next generation.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.Read the stories in today’s episode:The Fed doesn't have an inflation crystal ball, but it does have "sticky-price CPI"In spite of price hike fatigue, consumers are still snapping up organic foodsCredit card chargebacks are on the rise — part of the reason is fraudMultiple wars drive up the price of diesel"Never would have expected to be here": Young Mainers consider the lobster

Paying too much for wireless is just the way it is, right? Wrong. Escape to Freedom Mobile and get a plan with coast-to-coast coverage. Plus roaming in over 120 destinations starting at just $35.5 a month. Conditions apply. Details at freedommobile.com. It's Charles Barkley with Wayfair. It's outdoor season and my patio set up. Better be ready to play.

That's what Wayfair wins. Patio seating, umbrellas and grills. All delivered, fast and easy. Shop Wayfair.ca.ca.com. now. Way fair, every style, every home. On the program today, credit card disputes splurging on organic food and inflation, because of course, we're going to talk about inflation. From American public media, this is Marketplace. In Portland, Oregon, I'm Rimares in for Kai Rizdal. It is Thursday, the 30th of July. It's good to have you along, everybody. So today we got another big economic

data point. That is the PCE for June, the personal consumption expenditures price index, which is just a fancy way to say inflation. The June reading came in at an annual rate of 3.7%, which is down from what we saw in May at 4.1%. Sounds encouraging, but I should say it comes with a pretty big asterisk. June's numbers got some help from a now-abandoned truce between the U.S. and Iran, which brought oil and gas prices down. But there is another inflation measure we want to tell you all about. That is the Atlanta Federal Reserve's Sticky Price CPI Index. The reading there? 2.8%.

Marketplace's Nova Saffo gets us going. The Atlanta Fed says its sticky price consumer price index, a mouthful, is supposed to tell us what inflation will be way down the line in two years or longer. And in that context, 2.8% is not exactly good news. That tells us that to a large thing, It's still going to take time for inflation to get back to 2%. That's Olusonola, an economist with Fitch ratings. 2% is the Fed's target.

We haven't been there since early 2021. Among the biggest components of the sticky price index are housing prices, costs of eating out at restaurants, and recreational activities. Those tend to be sticky because when prices move higher, it takes a while for them to come down. rents, insurance prices, labor costs. Things that are in contracts that take longer to adjust and unwind. But economist Kathy Bostjansik of Nationwide says take the sticky price index measure with a grain of salt.

It's just part of the inflation picture. The other part is the flexible part of inflation. So yes, there could be some stickiness that lingers, but then there's also other components that adjust more quickly and often. Like prices for electronics, used cars, clothing, jewelry. Bostjansik prefers the core PCE measure, inflation minus energy and food prices, for a broader reading.

It's currently at 3.3%. But if the core PCE is at 3.3 and the sticky price index is predicting 2.8 in a few years, does that mean that underlying currents driving inflation, are actually slowing. Michael Pierce of Oxford economics says, yes. I do think that underlying trend in inflation is still gradually downwards. I think it's just a question of whether it comes down fast enough for Fed officials to be comfortable about.

In the meantime, Pierce cautions that the sticky price inflation reading tends to overshoot its estimates. It's based on a lot of assumptions about where prices are headed. In fact, around this time in 2022, the index predicted 5.8% inflation. We've come nowhere near that. I'm Nova Saffo for Marketplace. On Wall Street today, a lot of green. We'll have the details when we do the numbers. Like Nova was just saying, some prices are sticky.

Take a long time to budge. But that's actually not the case when it comes to grocery prices. They bounce around plenty. But if you zoom out, the bigger picture is pretty simple. Groceries cost a whole lot more than they used to. Since 2020, the cost of food at home has shot up about 26%. It's a big reason why consumers say they feel so crummy about the economy.

So you might think, naturally, people are cutting back on some of the priceier stuff, like organic food. That's, of course, food produced under stricter USDA certification rules, dictating everything from what farmers can put on their crops to how animals are raised, all of which leads to higher price tags. And yet, as marketplaces Mitchell Hartman reports, far from cutting back, many people seem to be doubling down on organics. I'm at a busy weekday farmers market in downtown Portland, Oregon.

The Sunrise Organic Farm Stand is packed with customers. Kimber Cavendish is a retired physical therapist and devoted farmer. Oh my gosh, we got basil, we got a ton of tomatoes, we got potatoes, we got dill, we got corn, celery. We're rabbits. How much more expensive is the organic? On the convention. If it's not organic, we don't buy it. Yeah, I mean, one.

little basil is $6 in it, you know, Trader Joe's $2.99, but we're pretty well versed on all the pesticides and toxins in the vegetables that are not organic. August Winningham, a restaurant owner and chef, is next in line. I got 20 heads of bi-color corn and some persling. For me, it's not really about organic, it's just about quality, which generally are synonymous. I'm buying for my restaurant, so, like, I do keep an eye on the price, of course. What will the market bear? What can I charge?

Where at the end of the month I have money, if I can pay myself. In spite of prices anywhere from 20% to upwards of 100% more than conventional products, a lot of American consumers are choosing organic. Tom Chapman heads up the Organic Trade Association. Last year? The organic marketplace grew three times faster than the total food marketplace. 6.8%. And that outsized growth has continued.

in the face of resurgent inflation, says Sherry Fry at market research firm Nielsen IQ. The first half of this year of 2026, organic grown at about 4.2, where the total store is just slightly declining. Fry says consumers are behaving in unexpected ways right now. Yes, they are financially stressed by high food prices, but... They're a little bit more purposeful. That oftentimes means that they might choose something like an organic over a conventional item, buying something that aligns with their values and what their family needs. For some consumers, this isn't a big financial sacrifice, says Scott Dicker at Spins, a market research firm. Obviously, it skews towards higher income. However, recently, the lowest earners were increasing

their spend at the fastest rate. They are prioritizing their health. And organic is becoming ubiquitous, expanding from premium Whole Foods type region. retailers to mass market and value outlets like Safeway, Walmart, and Costco. There's also been a boom in private label organic, all of which, says Nielsen IQ's Sherry Fry. It decreases that price gap between an organic or maybe a conventional item, and so there's just more selection in the space for consumers. And organic producers do have some advantages when it comes to keeping their costs down, especially in the face of soaring oil prices.

As Tom Chapman at the Organic Trade Association explains, they are less reliant on nitrogen inputs, petrochemical inputs for pesticides. Organic is kind of seeing conventional aside inflate while those aren't particularly impacting them. Meanwhile, new market trends are attracting more consumers, says Scott Dicker at Spins. Protein is hot. We're seeing big growth in organic milk, fresh meat, poultry, and seafood's doing really well, yogurt's growing. Animal-based brands started marketing themselves heavily as healthy and natural after plant-based alternatives started cutting into their market share. Another category growing by

leaps and bounds? Organic sodas. Other traditional kind of junk food categories like you're seeing organic candy, there's a big push for permissible indulgences. And at least all that sugar is certified organic, which for some consumers makes the higher price go down a little easier. I'm Mitchell Hartman for a marketplace. Say you're looking through your credit card statement, and you spot a charge you don't recognize. So you call up your bank and you say, hey, I didn't buy this.

I'm not paying for it. Can you please take it off? That's what's called a chargeback, basically disputing a transaction. And if the bank agrees it's legit, then they'll undo the purchase. Well, apparently, more and more people have been doing that lately, and for all kinds of reasons.

Amanda Moll has been looking into it for Bloomberg, Business Week. Amanda, welcome to the show. Thank you so much for having me. Okay, so when I think of a chargeback, I'm thinking your card has been stolen, you're the victim of fraud, but you wrote that for a lot of consumers, chargebacks are becoming a first line of defense. What do you mean by that? Right. So historically, chargebacks are sort of the refuge that consumers seek when a crime has been committed against them. But now a lot of people are looking at them as an option to problem solve from the very beginning. If something doesn't arrive when they think it should off of an online purchase, if they're dissatisfied with the service they've received at a restaurant,

more and more consumers are just using the chargeback to take care of that before trying anything else. How much of a rise have we seen? So since 2021, we have seen in the U.S. about a 29% of the U.S. about a 29% increase in chargebacks. And globally, that is, yeah, it's a whole lot. Globally, it's even higher. It's 46%. Whoa. Yeah. Some of that we can account for by the fact that a lot more people are making more transactions on their cards. But a lot of it is just people either thinking that they have been defrauded more frequently or people deciding that it is there fully within their rights to refuse to pay for things they purchased.

Okay, I want to get to that last point, but going back to what you just said, I mean, I've had that experience before. I remember seeing a $40 charge on my statement recently from some business I'd never heard of and I was about to dispute it. And then I did a little digging and realized, oh, oh, right, right, right. I did spend $40 at that flower shop. It was just showing up under a completely different name. Right. This happens to me almost every month. Right? And you're like, did I actually do this or did I not? So you call these kind of mistakes friendly fraud, or that's what the industry calls it? Yeah, friendly fraud has different definitions depending on who you talk to in the industry.

But I think it's the most common one and the one that makes most sense to me is people who are filing chargebacks against legitimate transactions that they made or they authorized in some way. But they don't realize that they authorized those transactions or they don't immediately recognize what those transactions correspond to. because we're shopping more online and shopping more through third-party services, that means that the businesses that we think we're transacting with are often not the businesses that show up in the payment processor. Okay, so some honest mistakes are happening, but are we also just seeing more flat-out fraud? Yes. I talked to some analysts in the industry who have done some data collection and some digging, and while this sort of like accidental fraud is a big driver of the increase in chargeback,

the other big driver is people, often young people, just deciding that they don't want to pay for or shouldn't have to pay for something that they purchase. You know, prices are rising. And I think that especially among young people, you know, they're looking at this system and going, well, I'm going to do just like a little bit of fraud as a treat. And like, why can't I have this pair of shoes that I want for free? Even though it is illegal, I should say. Yes. It is illegal. Well, I imagine from the consumer's perspective, filing a chargeback can feel pretty simple.

You know, you're making a phone call, clicking a few buttons. But tell us what happens on the other side of that transaction for the bank and also for the business. Right. What happens for the business in question is that generally they have to pay a fee, $15, $20, sometimes more, just because a chargeback was filed against them. Even if that chargeback is fraudulent, if the transaction is relatively low value, those chargebacks will just be automatic. automatically approved because the cost to investigate, you know, exceeds the cost of the transaction. And if that happens, you know, a $50 transaction or whatever, that money just gets clawed back from the merchant. It is really financially onerous, especially for small businesses. Okay, so zooming out for a second, what do you think the rise in chargebacks is telling us

about the consumer economy right now? I think that, you know, this is another piece of evidence that that there is some real stress happening to consumers with rising prices. And then you also see just a general rise in distrust of business. And, you know, with customer service has sort of fallen off a cliff for a lot of businesses. There's a lot of scammy stuff out there. There's a lot of subscription fees that people don't realize they're agreeing to. And that really creates a permission structure in some people's minds to sort of like do what they see as act equally against retailers. Yeah, yeah. It becomes easier and easier to hit that dispute button. One last question before you go, just curious, did reporting the story change the way you think about chargebacks at all?

I guess it surprised me how many people were filing because I think in the last probably 15 years, I think I filed one. And it was, I had ordered something from a retailer online that like just never showed up and, you know, I couldn't get a hold of their customer service. So, you know, after like two months. I just filed the chargeback. Like, I waited a good long time. And it worked. You know, for them to figure it out. And it worked. You know, I sent in the evidence that I had tried to contact customer service. That was enough for them to say, okay, these people seem to be scamming you. So, so here's your 90 bucks back. Amanda Mull writing about the rise of chargebacks for Bloomberg Business Week. Amanda, thanks for joining us. Thanks so much for having me. If you want more conversations

about this sort of stuff, about navigating our financial lives or even a little advice, Check all the Marketplace podcast that I host. It's called This Is Uncomfortable, available on your podcast platform of choice. Coming up, we're like, we don't know what this could possibly be, but why not? I mean, that's how all best ideas start, right? But first, let's do the numbers. The Dow Jones added 613 points, 1 and 2 tenths percent, to finish at 52,208. The NASDAG gained 679 points, 2.810% to close at 25,122.

And S&P 500 rose 121 points, 1 in 6 tenths percent, ending at 74.37. Instagram owner Meta reported earnings late yesterday. Today, investors reacted to a splendid splurge on AI that resulted in a 91% collapse and cash flow from a year ago, according to Reuters. Meta shares fell 7 and 9 tenths percent. We heard Mitchell talking earlier about Americans doubling down on organic products. Supermarket chain sprouts, known for its natural and organic products. reported second quarter sales of $2.3 billion this week, a 5% increase from last year. Vons fell, the yield on the 10-year T-note, rose to 4.67%.

You're listening to Marketplace. At Radio Lab, we love nothing more than nerding out about science, neuroscience, chemistry. But we do also like to get into other kinds of stories, stories about policing, or politics, country music, hockey, sex. Of bugs. Regardless of whether we're looking at science or not science, we bring a rigorous curiosity to get you the answers. And hopefully make you see the world anew. Radio Lab, adventures on the edge of what we think we know.

Wherever you get your podcast. This is Marketplace. I'm Rima Grace. If you think gas prices are bad right now, just take a look at diesel. Diesel fuel is an especially short supply, thanks in no small part to geopolitics. The average price, $5.34 a gallon. That's about 50 cents shy of AAA's all-time record. Now, diesel prices may not get the same attention as gas prices do. But as marketplaces Elizabeth Troval explains, they still take a real toll on the economy. There are a lot of layers to peel back when it comes to why exactly diesel fuel is in such a crunch right now. Of course, there's the underlying Iran conflict that's limiting diesel exports out of the Middle East. Will O'Neill is with S&P Global Energy.

Diesel was disproportionately affected because diesel is the refined product of one of the major refined products that is most exported out of the Middle East Gulf. That tightened diesel markets. More recently, Ukraine started bombing Russian refiners and Russia is restricting exports. We have lost with Russia alone 10% of globally traded diesel supply. And there's more. Abhi Regendrin is an analyst with energy intelligence. You know, Saudi Aramco had had to shut a pretty large refinery because of some damage caused by Houthi strikes. It's a big confluence of things. I would argue like in the refined product markets, it's almost gotten a little bit panicky. And the market could get tighter, pushing prices even higher.

Gulf oil analyst Tom Closa. diesel prices could approach the all-time high of about 585. He says Americans are more gasoline obsessed and care less about high diesel prices, but maybe they should care. Of everything that's on the energy side that can be insidious to inflation, diesel's the biggest, because not only do you move all sorts of goods across the country by virtue of trucking, you have all the marine vessels that use a form of, of diesel to move things from port to port. At hers, with University of Houston, says the economy runs on diesel. The grocery stores, the construction site out my window. So those higher diesel prices get passed through quickly.

It's passed through to the farmer, to the trucker, to the restaurant. It's there, and it's always there. And he says those higher prices aren't going away anytime soon. I'm Elizabeth Troval for Marketplace. When you think of Maine, you probably think of lobster. The state produces roughly 80% of all the lobster in the U.S. But there's a problem. The people who catch those lobsters are getting older.

And it's actually very difficult for new people to break into the industry. It can take years to get a commercial lobster license. A group of folks, a nonprofit in Portland, Maine, is trying to change that, trying to bring a new generation aboard. Marketplace's Samantha Fields has that story. Growing up in Maine, Janella and Estacio never thought much about lobster, beyond that she loved to eat it. It never occurred to her that lobstering could be a career.

Literally did not know what lobstering was at all. Never would have expected to be here. Here is on a small lobster boat called the Seas Smoke out in Casco Bay just off Portland, dressed in tall rubber boots, orange waiters, and thick blue gloves, hauling up lobster traps, and measuring lobsters. So first, you have to put the gauge from the eye socket to the back of the carapace body. Anastasio is 18, and heading into her second year of college, where she's studying art.

She's also in her second year of lobstering with lift-all boats, a program designed to introduce young people who don't already have connections to the lobster industry. Ben Conniff is a founder of the program and of the seafood business, Luke's lobster. The main lobster industry is a closed fishery,

so that means no new licenses are issued generally until fishermen give up their licenses. That means the waitlist for a new commercial lobstering license can be up to 15 years long. There is one way to skip that wait list if you get a student license before you turn 18 and do a thousand hours of lobstering alongside a licensed lobsterman before you turn 20 if you don't go to college or 23 if you do. So the only way typically that someone even knows about that student program or has the opportunity and the connections to do it is if they're the kid of a current lobsterman.

Lobstering in Maine has always kind of been like this. There's a lot of family tradition. No question, a lot of guys I know, fifth generation or more. Roger Woodman did not come from a family of lobstermen, but he did have lots of friends who were growing up in Maine in the 60s. Back then, he says it was easy to get a license. Oh, you could just apply. You rode into the state, paid your fee, and got your lobster license.

He got his license when he was 14. and he's been lobstering on and off ever since. He's 72 now. Today? The barriers to entry have increased so much, anywhere from licenses to boats to gear, and that didn't exist when our cohort was growing up in the 60s, 70s, 80s. And if you don't grow up around lobstermen, like Woodman did,

the barrier is even higher. Ben Conniff says all of this has led to fewer young people going into the industry. We talk to fishermen up and down the coast of Maine all the time. and we were consistently hearing from people who couldn't find the folks that work the junior jobs on their boat called Sternman. Enter lift all boats. Janelle, can we get one more? Janelle Anastasio first learned about the program from a teacher at her high school. That guy right there, Captain Wiley Muller.

When he first told her and her friends about it, we sort of signed up as like a joke. We were like, we don't know what this could possibly be, but why not? I never expected to grow so passionate about it. It turns out she loves being on the water, loves the fast pace and the unpredictability of lobstering. You know, like, are we going to have a whale come over here? Maybe, you know? She also kind of loves doing work that's typically done by men.

Makes me feel badass because I don't know many other Filipino women on the water. Now she can't imagine not being on the water. Is that 14 right here? Setting 14. To Naila Deloge feels similarly. She's 18, and this is her third year on the boat. The end of last summer, I realized I actually want to do this long term. She's starting college in the fall, studying to become a teacher.

But she's also going to keep working toward her thousand hours so she can get her license by the time she turns 23. Really, any time I have any downtime or any time off, I'm just going to plan to try to get on the boat. Like weekends, my Fridays, vacation times. I just have the desire to just be out there longer, have more traps. and really take the label as a lobster in. Her goal is to teach during the school year

and spend her summers on the water. I'm Samantha Fields for Marketplace. This final note on the way out today, you can file it under, if there were ever, a sign of the times. Apple is apparently launching a new leasing program, so soon you'll be able to lease an iPhone, an iPad, maybe a Mac. The pitch is affordability, you know, lower monthly payments at a time when electronics are getting more expensive.

even though, of course, overall price isn't actually going down. Because these days, affordability doesn't necessarily mean you're paying less. It just means you're paying longer. Our daily production team includes Livy Burdette, Andy Corbin, Mika Ellison, Maria Hollenhorst, Sarah Leeson, Sean McHenry, and Sophia Torenzio. Well, story is the supervising senior producer, and I'm Riemémechres. All right, we'll see you tomorrow, everyone. This is APM.

The economy never stops shifting. Markets move, global trade gets disrupted, and policies shift. And all these factors have a tremendous influence on the ways we live and work. I'm Kimberly Adams, host of Marketplace Morning Report, a daily 10-minute podcast where a team of award-winning reporters helps you make sense of our evolving economy. Listen to Marketplace Morning Report on your favorite podcast app.