What is the potential of global organic food and beverage market?
The Global Organic Food And Beverage Market has shown tremendous growth in value and volume terms. Rising population of Millennial has been complimenting the size of this industry. Coupled with increasing percentage of literates in the overall population, there has been a significant shift of preference from conventional food products towards organic food products. Every major region has witnessed an increase in organic production volume. Americas has been the biggest market followed by Europe, APAC and Middle East & Africa. Major reasons for the increase in demand have been the higher per capita income in major markets, presence of well established players and expanded distribution network in these regions.
Increase in product innovation in the market, expanding product portfolios of major players and aggressive marketing & sales strategies have helped the market to grow at a CAGR of ~%. Increased trade has been observed amongst major producing and consuming countries. The review period has witnessed an improved focus on expanding manufacturing facilities of major players and various new product launches, leading to a gradual increase in organic product demand. There has been a significant increase in government support and private participation to promote the consumption and production of organic products. Companies have invested huge amount in R&D segment to foster benefits of science-based positive nutrition.
How has the organic tea and coffee segment supplemented the growth of the market??
Global consumption of organic tea and coffee has increased on account of increase in caffeine intake by the urban population especially in the age bracket of 25 years and above. Conventional tea and coffee are amongst one of the most chemically treated products. Consumers are shifting from conventional to organic tea and coffee because of the added antioxidants found in them. The fastest growing product category amongst all food items has been organic tea and coffee over the last five years. This market has grown at a five year CAGR of ~%. Growing instances of lifestyle diseases, increasing disposable income, and rising awareness among consumers about health benefits of organic tea and coffee compared to conventional counterparts have propelled the growth of this segment. Only organic fertilizers and chicken manure are used as fertilizers for its production. Several new brands have been entering the organic tea section specifically, for instance, USDA certified organic tea continue to climb with brands including Adagio Tea, Republic of Tea, Mighty Leaf, Celestial Seasons, Rishi Organic Tea, David Tea, Teavana and Choice Organic Teas. Honest Tea, which bottles organic ready-to-drink tea, on an average sells ~ million bottles of tea a year. Average retail price of organic coffee during 2016 has been USD ~-USD ~ per pound. Latin American countries have been the major producers of organic coffee in 2017. These include Mexico, Brazil, Colombia, El Salvador, and Guatemala. Health benefits and fashion trends have been the two hallmarks of this segment.
How has the apac region performed in the review period?
APAC region has witnessed highest growth amongst all regions in terms of retail sales. It registered a growth rate of ~% in 2017. This has been mainly attributed to the rapid growth of organic food and beverage market in China with its increasing consumer base. There has been a marked increase in both, consumption and production in countries including Japan, Australia, China, India, Singapore, Malaysia and Taiwan. This has translated into a strong three year CAGR of ~% for the region. The Chinese market has been aided with greater responsiveness of unprofessional conduct in food production which has created a pull factor toward organic food in 2017. Key arable crops grown in this region include cereals, green fodder, vegetables and oilseeds. These together have accounted for ~ thousand hectares of agricultural land in 2015. Key permanent crops grown in 2015 include temperate fruits, coconut, coffee, tea and nuts in 2015. Coconuts took majority share of ~% area amongst top 5 permanent crops grown in 2015. China has been the leading country contributing USD ~ billion to the overall organic F&B market in 2017.
What is the state of the completion landscape in global organic f&b market?
Competition Stage: In the Americas and Europe, the competition in the organic food market has been largely fragmented due to large size of unpacked market and sale of products through private labels. However, few big manufacturers do have influential market share and regional presence. With majority of global leaders’ manufacturing facilities based in this region, large exports have been witnessed to countries such as UAE, South Africa and India. Key regional players include Amys Kitchen Inc., General Mills Inc., Hain Celestial Group, Inc., and Starbucks Corporation. Similarly, competition in APAC and Middle East & Africa has been much more fragmented with large number of unpacked goods being sold through the unorganized market and lack of proper certification agencies.
How stringent are certification regulations?
Certification norms are different for different countries. For instance, in the US, National Organic Program (NOP) governs the regulatory framework required for the organic food industry. USDA has recognized four types of organic production: crops, livestock, Processed/multi-ingredient products and wild crops. USDA’s Agricultural Marketing Service (AMS) program, another name for NOP has the core responsibility to administer and enforce organic regulations. Misuse of USDA Seal may lead to USDA compliance and enforcement actions, fines up to USD ~ per violation, suspension or revocation of the violator’s organic certificate. In Canada, organic certification has been implemented at a federal level since June 30, 2009 by CFIA. In France, organic label consists of green-white symbol of AB – agriculture biologique. This was introduced long back in 1985. Various other institutes such as Aclave, Agrocert, Ecocert SA, Qualité France SA, Ulase, SGS ICS have also been into the organic certification arena.
What factors have driven the global organic f&b market?
Global online retailing of organic food and beverages has been a major trend in 2016 and 2017. Online retailers in Europe especially in Germany, France and United Kingdom have generated enormous revenue from this sales channel. In Germany the online retail sales have grown at CAGR of ~% during 2012 to 2016. Global consumption of organic tea and coffee has increased on account of increase in caffeine intake by the urban population especially in the age bracket of 25 years and above. Organic baby food demand has increased manifold due to increase in parental predilection towards right nutrition and healthier food intake for their babies, expanded food product range, well developed distribution channel of major manufacturer, high cases of baby food adulteration and increase in awareness of the nutritional benefits of pure organic products. The organic baby food market has been valued at over USD ~ million in 2016, growing at an approximate CAGR of over ~% for next 5 years. This can be analyzed with the increase in per capita organic food consumption in ten countries
Why is the share of organic food products more?
Organic food division has captured a major segment of the overall market. It has accounted for ~% of the retail sales during 2017. Main reason supporting the large size of this segment has been versatile and stronger product portfolio of organic food categories. Major food categories have multiple variants available in the market for a single product in terms of flavors, types, sizes and prices. Organic beverages include organic milk, organic coffee, organic tea and organic wine as major products. This segment has accounted for ~% of the retail share in 2017. Small size of this segment has been associated with less number of organic beverage products being available in the market along with less number of companies engaged in its production. Less consumption demand on day-to-day basis, low flexibility extended to the manufacturers to branch out its products portfolio and special transportation requirements makes beverage manufacturing more complicated.
How developed is the usd organic f&b market in comparison to india?
In US, organic food and beverage market size in terms of retail sales has increased from USD ~ billion in 2012 to USD 44.3 billion in 2017 at a CAGR of ~%. The overall packed organic food and beverage market in the US has grown at a growth rate of ~% in 2017 to USD ~ billion in the same year. Natural and gourmet food supermarket stores in the US have expanded from ~ in 2012 to ~ in 2016. In 2016, organic food has been available in ~ natural food stores. These include: Bristol Farms, Central Market, Whole Foods Market and others. In 2017, price charged by organic manufacturers was higher compared to conventional food products. The competition scenario in the country has been fragmented in 2017 in both organic packed food and packed beverage market. Major competitors capturing high market share include WhiteWave Foods Co, Hain Celestial Group Inc, Amy’s Kitchen Inc, General Mills Inc, Organic Valley Family of Farms, Newman’s Own Inc, Starbucks Corp, Kerry Group Plc and others in 2017. The country has various organic hotspots which comprise of the regions carrying out various kinds of organic agricultural activity and accompanying businesses such as organic crop production, livestock production and organic processors. The packed organic food market has been estimated to reach USD ~ billion by 2022. The packed organic beverage market has been anticipated to reach USD ~ billion by the end 2022.
India organic food and beverage market size has witnessed an increase to USD ~ billion by 2017. The market has attained a CAGR of ~% during 2012-2017. Major factors which have been complimenting this growth have been the rise in disposable income and living standards, allowing people to spend on healthier substitutes of conventional food products. In terms of organic products, the biggest categories have been Tea, Organic rice, Organic Wheat Flour, Organic Millets/Flours, Organic Pulses, Organic Ghee and Organic, Cold Pressed Edible Oils. Major organic products in India have been sold through local F&V market, mom and pop stores, local supermarkets, specialized food stores, organized supermarket chains, hypermarket and online in 2017. Sresta Natural Bio-products has been the leading organic food company in 2016 in India. It has accounted for ~% market share in the overall organic food and beverage market in 2016. The organic food market in India has been highly unorganized in terms of unpacked organic products being sold in large volume in 2017.
What are the possible future innovations possible in the market?
Upcoming technique for increasing organic food production is through organic hybrid seeds. This can be done through cross pollinating desired variety of organic seeds together for enhanced output. For instance, organic wheat seeds with high yield can be cross pollinated with organic wheat seeds carrying high resistance to pest attack. The seed thus created would give rise to exceptionally enriched final output. With this technique farmers could create varieties that are healthier and which can stand up to the farmer’s micro-climate.
Evolving agricultural techniques including practices such as regenerative agriculture. Regenerative organic agriculture improves the resources it uses, rather than destroying or depleting them. It is a holistic systems approach to agriculture that encourages continual on farm innovation for environmental, social, economic and spiritual wellbeing. This farming technique enables soil carbon sequestration which is a proven remedy to global warming. It maintains soil nutrition through various crop seasons. Another upcoming organic-farm based innovation strategy revolves about Mixed Stocking. This practice involves having crops and raring farm animals on the same farmland, organically. This practice initiates a symbiotic natural relationship between the two. Organic crop residues feed the animals and animal manure act as natural organic compost to the soil.
What are the future estimations about the market and its segments?
The global organic food and beverage market had been showcasing a substantial rate of growth during the past few years. During the review period 2011-2017 the market has grown at a CAGR of ~%. The forecast period, 2018-2022, is expected to register a CAGR of ~%. Growth during this period shall be supported by the increasing production facilities and expanding geographical presence of major manufacturers, intensifying distribution channels, expansion of online organic food and beverage retailing, new product. Europe organic food and beverage market has been analyzed to capture ~% of global retail sales share by 2022. The demand for organic food products is anticipated to escalate at a significant pace over the period 2017-2022 due to rising expat consumers. As of now, this region is in its early growth stage and represents huge potential for the future. Rising disposable incomes and growing awareness of organic production methods will be fuelling demand for organic foods in APAC.
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