The new Global Organic Food & Drink Market report values the global market at US$60bn this year, an increase of just 4.7 per cent over 2009.
Europe was seen to be most badly affected by the financial crisis, with supermarkets reducing their ranges in response to declining purchasing power and focusing on cheaper and value ranges instead. .This was particularly the case in the UK, where the market contracted. The same was observed in Germany, where the market stagnated, but to a lesser degree.
“The patchy situation is because European countries have been affected by the economic crisis to different degrees,” Amarjit Sahota, director of Organic Monitor, told FoodNavigator.com.
For instance, organic food and drink sales grew by over 15 per cent in both France and Sweden. The UK was seen to be the worst affected of the large organic markets in Europe.
“Other countries that have been adversely affected by the financial crisis, such as Spain and Greece, have relatively small organic food & drink markets,” said Sahota.
The report remains positive that the organic food and drink market will bounce back as the world economy comes out of recession. However food price inflation will cause organic food prices to rise.
Organic Monitor has observed that some food companies are attempting to pre-empt this by ‘locking in’ organic supplies, for instance, by investing in ethical sourcing projects in developing countries.
However the perception that organic products are more expensive than conventionally grown is problematic – even though the price differential is sometimes no more than 15 per cent.
Sahota said he believes “organic food companies / retailers need to communicate the benefits of organic products better to consumers so they can have wider appeal. In countries like Denmark, organic foods have a clear message to consumers. They are thus adopted by a much larger consumer group, and Danish consumers are the largest buyers of organic foods in the world.
“The problem in countries like the UK and Italy is that organic foods are considered luxury items because of the expensive perception. Consumer education is the key.”
Another barrier identified by the market researcher is the plethora of new organic standards around the world, with little harmonisation between them.
“In Europe, we have a single European organic standard that is regulated by the EU. There is a national standard in the US, and national standards in other countries like Japan, India, Canada, etc. However, there is a lack of harmonisation between these growing number of standards. This is hindering global trade of organic products.”
In an ideal world, Sahota said, there would be a single global standard for organic products.
More information on the report is available at www.organicmonitor.com
The market researcher is also planning a Sustainable Foods Summit in San Francisco in January. www.sustainablefoodssummit.com.