Up until now, growth and volume in the organic industry have been focused on North America and Europe. Over the next few years, this will change.

◊ Sonalie Figueiras

 Note: To find contact details of Organic product suppliers in India, buy the Organic Directory

The global organic market is valued at approx. USD 127 bn-plus. North America accounts for 40% of the market, with Europe taking up one-third, and Asia is growing rapidly also.

Booming growth has been seen across all countries: Australia, the UK, Sweden, Canada, China, India—all have exceeded expectations. The global market is expected to continue to flourish, with projections of USD 320 bn-plus within five years. Organic and healthy food sales continue to outpace conventional food sales across these markets.

Demand is driven by the young: Millennials (born between 1980 and 2000) and Gen Z (born after 1995) consumers go out of their way to buy organic, driven by environmental, health and quality concerns. They are actively seeking organic products, with a big focus on plant-based foods. They are willing to pay more than their parents for safer, more ethical foods.

Demand for organic products will increasingly come from Asia, which is home to three of the world’s most high-growth economies, namely China, India and Indonesia—that’s a combined 3 bn-plus people!

US ORGANIC CUSTOMERS: LOOKING FOR VALUE

When it comes to organic, the US market still dominates. Based on figures from the US Organic Trade Association (OTA), the US organic sector grew by almost 7% in 2017 and as of mid-2018, the market was worth over USD 50 bn. American consumers are no longer new to organic, they are avid buyers and willing to spend but they are looking for better value and prices.

Companies like online wholesale buying club Thrive Market (offering customers 25-50% off on brands, as well as, budget-friendly private label options) and Brandless (wide range of unbranded organic products sold at low prices) are performing extremely well.

American consumers now have far more choice when it comes to organic food and beauty, with traditionally conventional retailers like Walmart, Costco and Safeway all investing heavily in private label organic product lines.

Thailand is a market to watch, with strong domestic demand for healthy food and a large range of innovative local brands.

EUROPE: IMPRESSIVE GAINS ACROSS REGION

Europe is still a smaller market than the US but aggressive growth across various countries makes it a strong one. According to estimates by market research firm, Technavio, the European market will reach USD 40 bn by 2020. A new European trade association dedicated to the organic industry launched in mid-2017, further echoes the region’s commitment to continued success.

Germany leads the way, with a robust domestic market valued at over USD 12 bn. In France, consumers are increasing their organic grocery budget: a recent study commissioned by Agence Bio (a French agency for the development and promotion of organic agriculture) found that 7 out of 10 shoppers purchased organic produce regularly, and organic supermarket sales were up by 18%.

Switzerland has the highest per capita spending on organic. Italy, Sweden, Spain and the UK are all experiencing record sales and demand growth domestically.

ASIA: ORGANIC MARKET OF THE FUTURE

Up until now, growth and volume in the organic industry have been focused on North America and Europe. Over the next few years, this will change.

Demand for organic products will increasingly come from Asia: 50% of the world lives within a 5-hour flight of the Pearl River Delta. Asia is home to three of the world’s most high-growth economies, namely China, India and Indonesia—that’s a combined 3 bn-plus people!

Southeast Asian consumers are big on beauty: 69% of Southeast Asians prefer products made with fresh, natural and/ or organic ingredients.

Thailand is a market to watch, with strong domestic demand for healthy food and a large range of innovative local brands, while Indonesia and Vietnam also have newly established consumer bases that will continue to develop.

Although spending on organic food remains lower in Asia than in Europe and North America, it is growing. In India, demand is increasing, with more organic brands entering the market. Supply-wise, India boasts the most number of organic producers worldwide and organic exports remain a source of growth for the country. Indian organic products are well priced and well-perceived by international buyers.

In contrast, Australia broke its own estimates with a domestic market value of over USD 3.75 bn in 2017. Its challenge? Australian products aimed at exports are highly priced, comparatively.

CHINA RISING: BUYERS’ BOOM

The Chinese organic market is now worth between USD 11 and 17 bn—representing around 10% of the global market. Middle class and upper class Chinese consumers are more concerned than ever about environmental issues and urban professionals are affected by food scandals and air pollution. China experienced more than half a million food safety violations in the first half of 2016 alone!

Achieving a healthy lifestyle continues to be Chinese consumers’ top priority, with 80% of consumers saying they will focus on having a healthier diet in a 2017 survey. They are motivated to invest in health and wellness products. Further, Chinese consumers are now an important consideration for international organic brands: China is now the fourth largest consumer market worldwide.

ABOUT THE AUTHOR

The author is Founder & CEO of Ekowarehouse, the global online B2B platform for sourcing certified organic products.