The Australian organic industry is tipped this year to become an AUS$1 Billion industry, according to independent research report commissioned by the Biological Farmers of Australia (BFA).

The Australian Organic Market Report 2010 (AOMR) released on Friday reveals essential oils, which are used in organic cosmetics, are the fastest area of growth.

Essential oil sales were up by 155 per cent in the past two years and their popularity, particularly in overseas exports, is only expected to rise as more people opt for emerging "organic lifestyle" options.

BFA Director and report co-author Dr Andrew Monk said the results of show the resilience of the organic industry.

"The presence of these results is testament to the resourcefulness and maturity of the organic industry, as well as highlighting the diversity and innovation of this market sector," he said.

Previously regarded only as expensive fruit and vegetables, organic produce is now an option more households are willing to buy into.

The report has found more than 60 per cent of Australian households now buy organic on occasion, up from 40 per cent in 2008.

As well as food and cosmetics, other organic choices include beers, wines, honey and fertilisers.

The AOMR was independently researched by the University of New England and by the Mobium Group, which surveyed a cross section of the Australian adult population.