The global market for organic food and beverages is expected to grow from $2,871 million in 2012 to $4,923 million by 2017 at a CAGR of 6.0% between 2013 and 2017. The growth rate is driven by increasing consumer awareness about the health benefits associated with consuming organic foods and beverages, as well as growing environmental concerns regarding conventional agriculture practices. In addition, consumers are increasingly looking for healthier alternatives to traditional non-organic products such as meat, dairy, and eggs. This research report covers the various trends driving this market, including consumer demand for organic products, regulatory developments, technological advancements, and competition among players. It also provides an analysis of the key drivers influencing the growth of the market over the next five years.
Market Dynamics and Consumer demand for organic products
Consumers have been gradually adopting organic food and beverages due to their concern about the safety of genetically modified organisms (GMOs) and pesticides, which are used extensively in conventional farming methods. According to the U.S. Department of Agriculture (USDA), the number of households that purchase organic food has increased from approximately 2.5 percent in 2007 to 4.7 percent in 2011. Organic food sales in the United States accounted for less than 1 percent of total retail food sales in 2010, but it was estimated to reach 3.3 percent of total retail food purchases by 2015.
Increasing awareness about the advantages associated with organic products
Increasing consumer awareness about the health risks related to eating conventionally grown produce is one of the major factors propelling the growth of the organic food and beverage industry. For instance, according to the USDA’s Food Guide Pyramid, people should eat three servings of fruit and vegetables every day. However, many studies indicate that fruits and vegetables grown using conventional agricultural techniques contain higher levels of pesticide residues compared to those grown organically. Consumers who buy organic food and beverages are concerned about the safety of these products because they believe that organic produce is safer for consumption and contains fewer harmful chemicals.
Increasing consumer interest in natural and healthy lifestyles
In recent times, consumers have become more conscious about the impact of their lifestyle on their health. They want to consume healthy food products that do not harm their bodies or environment. Many consumers prefer buying fresh, minimally processed food products instead of packaged or frozen food items. As a result, the demand for organic food and beverages has been rising steadily over the past few years.
Regulatory developments
In June 2009, the European Union (EU) passed legislation requiring all member states to establish national lists of “genetically modified organism (GMO)-free areas” by December 31, 2014. EU citizens will be able to order food products free of GMOs only if they live in GMO-free areas. The new regulation requires all food products produced within the EU to be labeled accordingly. Moreover, the EU has banned imports of certain types of genetically engineered crops into its territory.
Technological advancements
The development of advanced technologies such as robotics, artificial intelligence, and nanotechnology has enabled manufacturers to improve the quality of organic food products. These technologies can reduce labor costs and increase production efficiency. For example, robotic technology helps farmers to plant seeds accurately, thus reducing the risk of crop loss. Similarly, the use of artificial intelligence enables manufacturers to develop automated systems for monitoring and analyzing data collected from farms, thereby improving product quality and reducing errors. Nanotechnology improves the shelf life of foods by preventing them from going bad.
What is the growth rate of Organic Food and Beverages Market?
The global market for organic food and beverages was valued at US$48.5 billion in 2012 and is expected to reach US$72.0 billion by 2018. The market is projected to grow at an average annual rate of 4.3% during 2013–2018.
North America is currently the largest market for organic food and beverage products. This region accounted for approximately 40% of total sales revenue in 2012. North American consumers spend more money on organic food than any other region. In addition, regulations governing the sale of organic food have improved significantly in this region since 2007. According to the U.S. Department of Agriculture (USDA), sales of organic food increased 10% between 2011 and 2012. Furthermore, the number of certified organic farms grew from 15,000 in 2001 to 100,000 in 2012.
Asia Pacific is also emerging as a significant regional market for organic food and drinks. China alone accounts for almost half of the total sales revenue generated globally in 2012. The Chinese government has implemented several policies encouraging the consumption of organic food and drink products. For instance, in February 2012, Beijing issued a policy that set a target to double the share of organic food sold in the country by 2015.
Organic food and beverages are gaining popularity among consumers across the globe. Consumers are increasingly adopting these products due to their perceived benefits. Some of these include:
• Improved nutritional value
• Healthier lifestyles
• Reduced environmental pollution
• Increased consumer awareness
• More natural flavors
• Lower environmental impact
• Reduced health risks associated with pesticide residues
• Increased consumer awareness about the safety of conventional food
• Growing demand for healthy diets
Consumers prefer organic food because it offers better nutrition and does not contain harmful chemicals or pesticides. They believe it provides superior taste and texture when compared to non-organic counterparts. Additionally, organic food is generally less expensive than conventionally grown food. It is important to note that some organic food items may cost more than their conventional counterparts. However, consumers perceive these additional costs to be worth paying for the quality of their food. Moreover, organic food is becoming popular among celebrities and athletes who want to promote healthier lifestyles.
Which region has highest growth rate in Organic Food and Beverages Market?
North America is currently leading the global market for organic food. This is mainly attributed to increasing consumer preference towards organic food products. Asia Pacific is also showing promising signs of growth in the global market for organic foods. The growing demand for organic food products in China will drive the demand for organic food in this region over the forecast period.
Who are the key players in Organic Food and Beverages Market?
The major players operating in the global market for organics include Archer Daniels Midland Company, Cargill Inc., Conagra Brands Inc., Dean Foods Company, General Mills, Hain Celestial Group, JBS USA LLC, Kellogg Co., Kraft Heinz Company, Mars Incorporated, Nestlé S.A., PepsiCo Inc., Unilever PLC, and Yoplait Groupe. These companies have adopted various strategies such as mergers & acquisitions, product development, joint ventures, new product launches, expansions, and others to increase their market shares in the global market for green food. If you are looking to buy some organic food and beverage, we highly recomend that you check a local distributor in ecological taste coffee online.
Key Developments
In January 2013, Archer Daniels Midland Company acquired a majority stake in organic food producer, Stonyfield Farm Inc. This acquisition was aimed at improving the company’s position in the organic food industry. In August 2014, General Mills entered into an agreement with the European Commission (EC) on its proposal to ban the use of neonicotinoid insecticides in Europe. This decision was taken after the EC received numerous complaints from farmers and other stakeholders regarding the adverse effects of neonicotinoids on bees.
In October 2015, Mars Incorporated launched a line of organic snacks under the name “SnackWell.” SnackWell is available in four varieties including fruit-flavored snack bars, granola bars, chocolate chip cookie dough bites, and apple slices.
In March 2016, General Mills announced invested $100 million in the expansion of its organic food production facilities. As part of this investment, the company intends to expand its existing facility located in Le Grand, France.
In April 2017, Kellogg Company introduced the first plant based protein bar, which contains pea protein sourced from peas grown without synthetic chemical inputs. The launch of this product is expected to boost sales of plant based proteins across all segments of the food industry.
In July 2017, Mars Incorporated expanded its organic food business by acquiring 100% ownership interest in the British organic dairy and frozen food brand. For more information…
