Embrace organic, say experts, who predict 9.2% growth

By David Burrows

- Last updated on GMT

Branded food companies should embrace the trend with new organic products and brands or by reformulating existing ones, said the Rabobank analysts. © iStock
Branded food companies should embrace the trend with new organic products and brands or by reformulating existing ones, said the Rabobank analysts. © iStock

Related tags: Organic food sales, Organic food

Sales of organic food will grow almost three times faster than non-organic, according to forecasts by Rabobank.

Concerns relating to health, food safety, the environment and animal welfare have all helped organic to high single and even double-digit growth in recent years and this trend will only accelerate, the experts predicted.

Between 2005 and 2015, organic food sales increased 7.9% to €38bn in Western Europe and 11.4% to $39bn (€36bn) in the US.

These were far higher than the rates posted by food overall, especially in Europe, where the financial crises has led consumers to the discounters. Still, they didn’t turn their back on organic, Rabobank noted – and their commitment to the sector remains as strong as ever.

“Until 2025, organic food sales in Western Europe and the US are forecast to grow [compound annual growth rate, CAGR] by 6.7% and 7.6%, respectively,”​ said John David Roeg and Norbert de Roij Zuijdewijn in their paper, Organic is good for you.​ 

In their ‘optimistic’ scenario, growth could even reach 9.2% in Western Europe. Even in their conservative forecasts, CAGR in the next 10 years will be 4.2%.

Branded food companies should “embrace” ​organic,​ the experts said, through new products and brands or even reformulation of existing ones. Western Europe-based food producers should increase their focus on organic product options and innovations in order to tap into a growing segment.”

Germany to pass 3.5bn

Roeg and Zuijdewijn also noted differences in uptake of organic between northern and central regions of Europe, compared to southern regions. This may be because the diet in more southern countries is already perceived as being very healthy, they noted.

Lower income per capita, a lower concentration rate of modern retail trade, higher unemployment rates and a general tendency to be trend followers could all also be factors, they said.

Denmark, Sweden and Switzerland lead the way in terms of per capita consumption, whilst France and Germany are the largest markets.

Organic sales in Germany passed €3bn last year and will hit €3.5bn within the next five years, Rabobank predicted. Meanwhile, France could pass the €2.5bn mark.

The UK, which boasts the third biggest organic market in Europe, was hit hard during the financial downturn. Sales are beginning to recover, according to the latest national statistics published by the Soil Association, but the sector faces stiff competition from other popular ecolabels​, most notably ‘fair trade’.

Healthy perception

Roeg and Zuijdewijn also combined the findings of eight international studies to determine why people buy organic. Perceived health benefits are the main reason, they found, followed by environmental concerns, perceived better taste, fewer pesticides, better animal welfare and ‘a desire for natural and unprocessed foods’.

Scientists and regulatory bodies have contested some of these reasons, especially the perception that organic food is healthier.

Some positive studies have had a notable impact on sales. One, published earlier this year, suggested organic meat contains up to 50% more omega-3 fatty acids​ than conventionally-produced meat. The findings, which were heavily promoted and shared by the organic industry, helped to boost flagging sales, according to Soil Association, the UK's organic certification board.

 

 

 

 

 

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