Worldwide organic food and drink sales totalled more USD100 billion for the first time in 2018. New research by Ecovia Intelligence shows that global sales increased by 6% to USD 105 billion last year.
According to a new report titled Global Organic Food & Drink Market Trends & Outlook, the largest markets for organic products are in North America and Europe. The combined revenue share of these two regions is 90%. Although sales remain concentrated in the ‘western world’, the share has declined from 97% in 2005. A number of countries with a strong tradition of exporting organic crops are now developing strong internal markets; these countries include China, India, and Brazil.
In terms of country markets, the US has the largest market for organic food and drink, with around 45% of global sales. The German, French, Italian and Canadian markets are the next largest. In terms of share of total food and drink, Denmark leads with almost 14% share of retail food sales. The highest spenders of organic products are in Switzerland, Denmark, Sweden and Austria.
Rising consumer awareness of organic products and widening availability are identified as two major drivers of global growth. Distribution of organic foods is increasing in supermarkets, discounters, drugstores, pharmacies, and the catering and foodservice sector. Organic ingredients are being used in a growing number of European and North American foodservice establishments. The report notes that major chains, including McDonald’s and Pret A Manger, are also making commitments to organic product sourcing.
Retailer private labels are wielding great influence in the organic food industry. All leading food retailers in North America and Europe are marketing organic foods under private labels. Coop Switzerland is most successful with its Naturaplan brand; listing 2,500 products, it accounts for over 40% of organic food sales in the country. It is one of a growing number of retailer private labels that generate over USD1 billion sales.
“Another challenge is growing number of national and private organic standards; almost 100 countries now have national standards. Outside the major ‘organic trading blocs’, there is no harmonisation of organic standards and very few equivalency agreements”
Despite several years of solid growth in organic retail sales, organic faces many challenges ahead, according to Ecovia Intelligence founder, Amarjit Sahota: “The first is demand concentration: organic agriculture is now practiced in 181 countries, however the bulk of sales are from the affluent countries. Organic is perceived as a rich man’s luxury in many parts of the world. Another challenge is growing number of national and private organic standards; almost 100 countries now have national standards. Outside the major ‘organic trading blocs’, there is no harmonisation of organic standards and very few equivalency agreements.
“There is also growing competition from the growing plethora of sustainability schemes and ethical labels. Organic remains the premier and dominant eco-label in the food industry, however adoption rates for many agricultural commodities are lagging. For instance, over a quarter of all coffee and cocoa grown is now certified according to a sustainability scheme. Organic’s share has been overtaken by other schemes, such as Fairtrade, UTZ Certified and Rainforest Alliance. The challenge is to maintain organic’s pole position in an increasing ‘labelised’ food industry.”
• An update on the global organic food & drink market, as well as sustainability schemes and eco-labels, will be given at these upcoming events: Organic Food Masterclass: Future Evolution (8 May, New York) Sustainable Foods Summit Europe (13-14 June, Amsterdam) Sustainable Foods Summit Asia-Pacific (2-3 September, Bali)
Photo: Amarjit Sahota speaking at this year’s Biofach event. Jim Manson