Ask Matt: Was organic food an investment fad?

Q: Was organic food just an investment fad?

A: Organic Food wasn't a fad. It's just gone mainstream, which good for consumers but terrible for dedicated organic food companies.

Organic food distributor United Natural Food late Monday stunned investors by reporting adjusted quarterly profit of 63 cents a share, missing expectations by 7%. The company also warned revenue in fiscal 2016 would miss Wall Street targets by about 1% and also trimmed expectations for profit in the year. Investors were not pleased, pushing the stock down 17% to $36.59 on the news. It's not a United Natural Foods problem. Even the industry giant, Whole Foods Market (WFM) has seen its shares lost about a third of their value over the past year as competition heats up.

Organic food wasn't a fad. Sales of organic food has increased by a double-digit percentage every year since the 1990s and hit $39 billion in 2014, says the Organic Trade Association. Nearly 85% of consumers in the USA buy organic food. But the popularity of organic food, interestingly, has been a problem for the companies that focus on selling it. Giant retailers, including the grocery store giant Kroger (KR) have aggressively boosted their organic offerings at prices lower than some of the smaller entrenched players.

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.