First of all, we have to start defining What is organic food? Also called ecologic or biologic products, this are vegetables/ animals products produced and elaborated with natural substances. The most consumed organic foods are fruits, vegetables, meat and dairy products. In the process of organic foods, fertilizers and pesticides of chemical synthesis are not used. They are free of hormones, antibiotics, residues of heavy metals, without using artificial colors and flavors as well as genetically modified organisms (GMOs). Organic Food price and consumers The popularity in the market of people that want to buy and consume something 100% natural, is because usually this consumers in general see organic food as more healthy and with higher quality, although in the most of the cases their cost is more expensive than traditional products, statistics show the consumers are willing to pay an additional amount of money for consume this products. In a lot of countries, most of the consumers are willing to pay 20% more for this products, this situation is because organic food has the fame of having more benefits than traditional products. A study of RMIT University, showed that organic food have the capacity of improve health by reducing almost 89% the level of harmful pesticides blood. According to Food and Agriculture Organization of the United Nations (FAO), the safety of these products is the most important point to take in mind. Nowadays The reality now worldwide, is that the trade of organic products is starting to grow quickly, the growth rates in the industry shows that organic foods in past years, only supplied to small markets but now it has grown to big distribution channels. The marketing of these products are implemented mainly by 4 channels: big corporations that have entered the market recently, health food stores and a rising supermarket presence but the main channel is the door-to-door direct sales: some companies with this kind of channel can reach to 200 thousand clients. In the last 30 years, this resurgence of organic production has consolidated and expanded around the world, influenced mainly by three factors: the strengthening of environmental awareness and the recognition of the unsustainability of modern production systems, the rising concern about damage of agrochemicals on human health and the impact of the social considerations on the destruction of rural communities. Well known food organic analytics, for example Ulrich Hamm professor in Germany, had calculated a rising annual tariff of 20 and 30%, with the possibility of reaching 50% in some countries. Most of the organic business in the UK predicted that in the next 10 years, the organic world market will growth from US$ 11 billion to US$100 billion, with United States, Europe and Japan leading the ranking. Now the most important question to ask is Where is situated the organic production? Approximately 30 million hectares are employing in a world level for organic production, according to the latest FAO facts. Australia has the advantage with almost 12 million hectares, followed by Europe with more than 7 million and Latin America with almost 5 million. In South America, Argentina represents the country with more organic farming hectares with more than 2 million, followed by Uruguay and Brazil with a 1 million. The European market Nowadays Europe is the main consumer and one of the main producers, the European consumer has more sensibility and concern about the climate change, quality of the products and environmental issues. Despite the hard times they suffer because the economic crisis and the drop in consumption on some products, the organic food choice hasnt followed the same tendency. Countries like Sweden and France have increased the organic sales 15%, while the German market, the most important in Europe, continued growing in 2010. The British country suffers decreases of 6%. The business is performed mostly in supermarkets, special stores and direct market, the use of these channels depends of the country. Supermarkets predominate in Sweden, Denmark, Great Britain, Austria, and Switzerland. Meanwhile the special stores have more strength in France, Spain, Germany, Belgic, Italy and Holland, the direct market is executed in all countries but with a lower impact. Although in some cases like Austria and Switzerland, we can see that exceeded the special stores. Is estimated that in the next years supermarkets gain more importance. The North American market United States is the second most important market in the world after the European countries. It estimated that in the 2000 this market reached a value of US$800 million, almost the 40% where from fruits and vegetables, the strongest category in the last 3 decades, the average premium paid in this market is 20% more than conventional products. It estimated sales has increased between 20% and 25% since 1990, between the factors associated to this growth, the increased of marketing in the supermarkets plays an important role, in special the case of natural food chains and the gains of corporations like Kelloggs, Heinz, Mars and General Mills. There are two channels that predominate in the trade of organic food in this market: the natural food stores (48%), which had increased during the 90s and the supermarkets (49%) which have a significant effect in the expansion of the demand in the last years. Although direct market is implemented in a lower grade, like the example of farmer fairs. In Canada the 80% of organic food that are sold to final consumers are imported, the organic sector is the most growing in the Canadian food industry, with a growth tariff of 20% approximately. The Canadian consumer in general is a very sensitive buyer in relation to the benefits of a healthy nutrition and respect for the environment, so they are willing to pay more for better quality products. The Asian market According to estimates, the annual consumption of organic products in the Asian continent raised to US$15,000 million, where 70% is from processed and industrialized products. The Asian market for production and consume of organic products has been growing in a sustainable way the last ten years, thanks to that it opens an interesting opportunity to the most traditional markets like Japan, South Korea, Singapore and Taiwan, more cities with organic consumption are appearing like Shanghai, Beijing, New Delhi, Bangalore, Bombay, Kuala Lumpur, Jakarta, Manila and Bangkok. Although Japan is not an important producer like the UK and United States, is one of principal consumer of organic food. Determinate the size of the organic food market in Japan its hard, this is because statistics shows that the Japanese denominated products yuki, which include both organic products produced with reduced use of agrochemicals. According to existing statistics, the market has increased considerably in recent years; by 1994 the consumption of these products where US $ 500 million and for 2000 a US $ 2.5 billion was estimated, however, according to a 2007 estimate, only 10% of these values corresponded to products 100% chemical free. The FAO estimates that growth in the Japanese market for organic products is about 20% annually, because this rising demand, in the last year big companies had enter in the production and trade of this products. Its the case of foreign companies like Dole Food Company or national companies like Nissho Iwai Corp, Kirin Brewery Co. Ltd, Mistui & Co. Ltda y Sumitomo. Some of them produce in the Unites States and exported to Japan. This increase in demand is due to a high rate of concern of Japanese consumers about their health, for healthy nutrition, the words "without chemicals" and "organic" have become an attractive market, which has resulted in overprices between 20% and 50% higher than conventional products. The Latin American market Argentina is the country with the higher surface dedicated to the organic production, occupying the second place at world level. Uruguay became the Latin American country with the highest proportion of lands devoted to organic production and reached the 9th position worldwide. Latin American exporters focus more particularly to industrialized countries instead of organic consumers, an area of 5 million hectares are dedicated to organic agriculture, organic production in Latin America is mainly exported to Europe and North America. Also weak domestic demand is justified by the lack of information about the risks of certain procedures from traditional agriculture to health, insufficient presence of these products in mass distribution channels, lack of policies to stimulate local production, and low competitiveness of products in markets with lower income populations than Americans or Europeans. The market in developing countries It is expected that in the coming years, developed countries will increase domestic production of organic products, but is unlikely to meet the demand for most products. The consumer preference for national or regional organic vegetables and fruits indicates that the best opportunities are for temperate and non-temperate organic fresh products with stations in the opposite direction, for products that cant be produce in the colder weather of northern developed countries (example oranges and kiwi). Most of the organic supply comes from producing countries close to those markets, such as the countries of the Mediterranean area in the case of Italy, Spain, Israel, Morocco and Egypt. There may also be some opportunities for seasonal limited products and processed fruits and vegetables. Export requirements for organic fruits and vegetables Phytosanitary certification: Import requirements depend on both the product and the country of origin. In general, all shipments of fruits and vegetables must be accompanied by a phytosanitary certificate issued by an official of the exporting country. Such officer may determine if the particular fruit or vegetable can be exported to the country of destination and what phytosanitary requirements are to be met. Rules relating to the category and quality: Vegetables and fruits exported to the CE, in Japan or the United States must comply with the import requirements relating to the dimension, category, quality and maturation. The relevant authority of the country must issue a certificate inspection based on the accomplishment of the rules. Pesticides and other polluting materials: Most of the developing countries had established laws about pesticides, herbicides and fungicides tolerance used in the production and processing of agricultural products. These countries have established maximum residue levels, commonly known as MRL. However, producers that use some of the few synthetic inputs allowed by the organic standards should know these requirements. Customs clearance: In general, the Customs Services of the importing country are responsible for the final approval and authorization to import all products. They examine all the documentation for the issue and will not release goods from the port of entry until all requirements are met. They are also responsible for the collecting import duties. Advantages Producers change to organic agriculture for a lot of reasons. Some consider the use of synthetic agrochemicals is bad for the health and the environment, others feel attracted for the high prices and the fast growth of the market for many organic products in the last years. Organic agriculture may represent an interest opportunity for many Central American producers and can transform in an important tool to transform life quality and incomes. Challenges Although the growth markets, one of the main problems that limited this tendency is the lack of standardized laws. In an international level, theres is no certificate agencies in the system of accreditation recognition or standardized laws, forcing developing countries to be certified by different agencies in the destination country. This is a task that requires urgent attention, though it must consider that efforts are taking place in this issue, between some is the "Guidelines for the Production, Processing, Labelling and Marketing of Organic Products" prepared by the Codex Alimentarius Commission and the "Accreditation Program" IFOAM (International Federation of Organic Agriculture Movements). In conclusion Organic agriculture is a production system that seeks to make maximum use of farm resources; placing emphasis on soil fertility and biological activities, at the same time reduces the use of nonrenewable resources and does not used synthetic fertilizers and pesticides in order to protect the environment and human health. Another advantage is that as organic agriculture grows, reducing costs are seen, production increase and add an extra value, its important to keep in mind that producers of organic food must be certificated with an organic certification, which is obtain by certificated private agencies, to obtain this certification producers must accomplish with the principles of organic food related to the country you want to export. The change to organic agriculture can be more easy and profitable for some producers, depending in some factors, for example, if the farmer use in an intensive way or not agrochemicals, if has access to workforce because organic production tend to require more workforce, if you have access to organic fertilizers and other permitted inputs, and if you own your land.
The global market has witnessed growth in recent times due to increasing consumer health awareness. In addition, widening distribution channels and increased government regulation and intervention are some of the other factors contributing towards the market growth. Shorter shelf life of the organic products and high prices of the raw materials are the major growth barriers of the market. However, increased R&D efforts for new products development provides huge market opportunity for the market players.
In 2012, organic food dominated the global market and accounted for 80.6% share of the overall demand. Organic fruits & vegetables led the food segment and accounted for 38.9% share of the market and are expected to maintain their dominance over the next six years. Organic dairy products are expected to grow at a CAGR of 14.1% from 2013 to 2019 due to advancement in technologies which provide products with an extended shelf life. Organic meat, fish & poultry products occupied a very small share in the current market but are expected to increase their market share in future due to development of new and innovative products in this segment and is expected to exhibit the fastest growth rate of 14.6% from 2013 to 2019.
Organic coffee & tea and non dairy beverages were the market leaders in the organic beverages space. Organic coffee & tea accounted for 39.8% of the total beverage revenue share in 2012. Organic beer & wine beverage are expected to grow at a rate of 24.5% from 2013 to 2019. Organic beverages markets are witnessing growth due to increasing consumer awareness regarding health benefits associated with it. Moreover, due to their finished quality and better formulation flexibility, the market is witnessing a steady rise, which leads them to gain a significant position in the market.
North America dominated the market and accounted for over 48% of the global demand in 2012 followed by Europe which accounted for 45.6% share for the same year. This dominance is driven by new product launches and widening distribution channels. Growing demand for organic food, increasing spending habits, life quality, and changing trends in ethnicity are expected to drive organic food & beverages market in Asia Pacific.
Last four days was in the company of Agricultural Scientists, people who develop insecticides and pesticides for crop protection. One obvious question on my mind was are these chemicals actually killing us? After a long pause I got my answer, yes it is. Not immediately, may be but over generations yes. Though none of the Insecticides are carcinogenic and if used as directed in quantity, there is not much to worry. So what is the worry.
1, Increasing population and so many more mouths to feed
2. Decreasing Agriculture land size and people coming out of agriculture
3. Mismanagement of demand and supply, including export imports
4. no incentives for farmers to grow more
5. No other method can give volumes to meet demand.
organic is good and there is no question about it but is the seed organic, is the manure being used pathogen free. Talking to farmers who grow organic for their own consumption they said that it will be impossible to go organic and meet the scale. Now that Dal prices have hit all time high farmers are under pressure to bring new crop in the market. We are in a death trap either way. If you can grow your food.