Organic Processing Vo1.8 #1 - January/February 2011

New Global Report on Organic Food & Drink Sales

The global market for organic food & drink is recovering from the economic slowdown, with revenues projected to approach $60 billion this year. In its new Global Organic Food & Drink Market report, Organic Monitor ( www.organicmoni-tor.com) states that although global sales increased by just 4. 7 percent in 2009, sales are projected to expand at higher growth rates from 2011 onward as the world economy comes out of recession.

The report finds that the European market was the most affected by the financial crisis with the UK organic market contracting in 2009 and the German market stagnating. In contrast, the market in some countries, including Sweden and France, showed resilience, reporting growth rates in excess of 15 percent. The North American market for organic food & drink continues to show healthy growth. It has overtaken the European market in 2010 to become the largest in the world. Although the U.S. has shown a large rise in organic farmland, organic food supply continues to fall short of demand; organic products are imported from various regions. Latin America has become a major source of organic fruits, vegetables, meats, seeds, nuts and ingredients. With growing consumer awareness and better distribution, the market for organic products in other regions is also showing healthy growth, especially in Asia and Latin America.

A challenge to overcome is the consumer perception that organic is expensive. Also, with food inflation looming, prices of organic are expected to increase. In anticipation, leading organic companies are locking in supply of organic ingredients; some by investing in ethical sourcing projects in developing countries.

According to the report, organic farming is now practiced on over 35 million hectares in 154 countries, with increases expected to occur especially in developing countries. Meanwhile, consumer demand is expected to remain concentrated in Europe and North America. The growing number of organic standards throughout the world, and the lack of harmonization, is becoming an impediment to global trade. Consequently, organic producers have to adopt multiple standards to develop an international presence.

Another global trend is the growing demand for ethical products. Certification agencies are responding by integrating social requirements into their organic standards. Thus, a growing number of organic products are certified organic and fair trade.