Despite the recession, sales of organic cotton apparel and home textile products jumped 35% to an estimated $4.3 billion in 2009, reports the Organic Exchange, with Nike, Walmart, and Williams-Sonoma (owner of Pottery Barn) named as the largest consumers in the U.S. That growth is especially significant since overall global apparel and household textiles fell 7%.

"It is very a interesting dynamic, to see growth this strong," LaRhea Pepper, OE senior director and co-author of the report, tells Marketing Daily. "We thought it might slow because of the recession, but we saw some companies increase their use of organic cotton by as much as 400%."

Four of the Top 12 largest consumers are companies based outside the U.S., including No. 1 C&A, based in Belgium, No. 5 H&M (Sweden), Coop Switzerland (No. 7) and adidas, in 11th (Germany). Other American companies on the list include Anvil Knitwear, Greensource Organic Clothing Co., Levi Strauss & Co., Target and Nordstrom.

One change, says Pepper, who also farms organic cotton on about 500 acres in West Texas, is a big increase in demand for organic home textiles. "The industry has been really apparel focused until now, but between companies like Target, with its sheet and towels, a new line from Bed Bath & Beyond, and Williams-Sonoma's expansion into this area, it's really taken off. And we're already seeing that growth continue into the 2010 numbers."

It's also been interesting to watch the leading companies react to watchdog efforts, such as published accusations last year that some of H&M's organic cotton contained genetically modified seeds, not allowed under organic guidelines. (Organic production is based on a system of farming that maintains and replenishes soil fertility without the use of toxic and persistent pesticides and fertilizers, as well.)

Rather than scaring companies away, she says, marketers "seem to be taking these issues as sort of growth hiccups, and recognizing that they need to do even more extensive testing and communication with consumers, and up and down the supply chain." Any greenwashing accusation seems to "strengthen companies' determination that if you are making a market claim, you better have the paper to back it up."

A case in point, she says, is Walmart's coming in third place after C&A and Nike. "Nike and C&A are really expanding, while Walmart is clearly more focused on taking its time to grow its program the right way. Companies know they have a huge target on their back if they get it wrong."

From 2001 to 2009, organic cotton sales have had an average growth rate of 40%, and Pepper says the nonprofit Organic Exchange projects growth of between 20 to 40% in both 2010 and 2011, with an estimated $5.1 billion market in 2010 and $6 billion market in 2011.