Why organic food is growing at more than 14% a year
Source: F2C Import Food Platform
As consumers began to recognize the connection between diet, health and the environment, organic foods began to become popular in the early 2000 s. Today, people are turning to clean labels, requiring transparency in food and beverage labels, and organic food is the ideal solution to these problems, but also to bring the food industry a much-needed growth.
Organic food growth is not expected to slow in the short term. According to a recent TechSci Research report, the global organic food market will grow at a compound annual rate of more than 14% between 2016 and 2021.
Laura Batcha, executive director of the Organic Food Trade Association, said: "We are seeing innovation in baby and children's food, and there is a lot of evidence that healthy snacks will continue to be popular. In the United States, there are many opportunities for expansion and export of organic food, especially fresh organic food. If you look at the retail market, you will find that retailers are continuing to accelerate their investment in organic food in their stores."
Organic is -- back in time?
The search for more organic farming methods-less fertilizer, better soil management, and more biodynamic methods-is not new. It actually started in the 1940 s, so organic food is more of a return to the way it used to be, and of course now we have better equipment, a leaner supply chain, and a modern marketing and retail system.
Taste and flavor are the main drivers of organic trends. When consumers try organic foods, they usually start with organic fruits and vegetables. Some people think that these organic foods have better taste and flavor than traditional products. Nutrients are another factor in the popularity of organic foods, although some are still debating whether organic foods have a higher nutrient content than conventionally grown foods. Some consumers are interested in foods that are not raised and grown with synthetic pesticides.
Some consumers confuse "organic food" with "natural food. "Organic certification" describes how a product is produced and requires that it not use antibiotics, artificial colors, genetically modified ingredients or synthetic pesticides. For the term "natural food", despite the efforts of the US Food and Drug Administration, there is no official definition.
Organic food supply
The organic food industry has struggled to provide adequate supplies-livestock producers in dire need of organic feed are importing raw materials from abroad because they cannot find enough feed at home. And organic food producers must also try to convince consumers that organic food is often worth higher prices.
Part of the increase in the cost of organic food is that it must be grown, harvested, processed and transported separately from traditional food. It will take some time to convert traditional planting areas to organic planting areas. This is a transitional period. During this period, producers cannot obtain the high prices brought by organic crops, but must comply with the relevant agreements on crop planting.
Chad Hart, an associate professor of economics at Iowa State University, said, "When I talk to people about the three-year transition from traditional to organic, they ask me if they should try it or continue with the tradition. This is a challenge that the organic food industry has to overcome."
As retailers and manufacturers expand their supply of organic products, raw material prices rise as competition increases, providing an economic incentive for producers to take the necessary measures to convert their land. However, finding organic ingredients is not always easy and may require companies to plan their purchases years in advance. There is also the problem of finding enough workers to work for organic farms. According to the U.S. Department of Agriculture, the average age of farm workers is now 58.
Denise Morrison, chief executive of Campbell Soup, says sourcing fresh and organic food can sometimes be a challenge. She mentioned the initial difficulties the company faced in launching a new version of its organic wheat goldfish cookies. "We have to go all the way back to the supply chain and source sufficient quantities of organic wheat. Now, this is no longer a problem, because when there is demand, supply follows."
In response to the market demand for organic food, the number of organic farms is increasing. According to a Mercaris report, in 2017, the area of organic food planted in the United States increased by 30% over the previous year. However, while the amount of land converted to organic farming has increased rapidly in recent years, organic farms account for only 0.7 percent of total U.S. agricultural production.
Grocery stores, food manufacturers and other organizations that rely on organic food are working closely with farmers to ensure they have adequate supplies in the future. In some cases, they pay producers to convert land into organic farms and assist them in finding consultants to help them make the transition.
General Mills recently partnered with a farm in South Dakota to convert 34,000 acres from a traditional farm to a certified organic farm by 2020. General Mills plans to use the wheat grown there for its Annie's Homegrown line of macaroni, snacks and other products.
Organic Product Evolution
More and more organic products continue to come on the market, including Unilever's Growing Roots line of organic snacks. In January, 7-11 convenience stores launched their own brand 7-Select Go! Smart series organic cold pressed juice. These are just two recent examples.
In addition to launching new products, acquisitions are also a way to capture more of the organic food market. General Mills acquired Annie's in 2014. Campbell Soup has also strengthened its presence in the organic food market in recent years, acquiring children's food and snack company Plum Organics in 2013 and Pacific Foods of Oregon last summer. Just last month, Nestlé announced the acquisition of a majority stake in Terrafertil, a South American manufacturer of organic and natural plant-based foods.
Similar investments take place in land. Organic farm certification is continuing to grow, and more is the transition from traditional to organic. A sign of the increase is the number of applications received by the Organic Matter Inspection Board (Organic Materials Review Institute) to check which products-fertilizers, pest control, livestock health care and others-are suitable for organic operations.
Peggy Miars, Executive Director of the Organic Matter Inspection Board, said: "More and more people are becoming aware of and demanding the Organic Matter Inspection Board seal, and our growth reflects the overall growth of the organic industry. More and more people are choosing organic food, and more and more people are using organic methods to cultivate products on their farms and family gardens.
There is no doubt that the demand for organic food and beverages will continue, and manufacturers are looking for innovative ways to expand their offerings. The organic food industry is changing, and new definitions, certifications, products, policies, and even new consumers will continue to participate in this huge market.
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