Study finds that the U.S. has the highest organic food and beverage sales in the world

Food & Drink Weekly, August 11, 2003

A new report on the global organic food and drink market from UK market analysts Organic Monitor finds America has the highest organic food and beverage sales in 2002, due in large part to the implementation of the National Organic Program (NOP) that succeeded in raising the profile of organic products to consumers and mainstream retailers. Fresh fruit and vegetables boast the biggest market share, although Americans are generally buying organic food and drink products as they are seen to be healthier and more natural than their non-organic equivalents.

The western European market is the second largest in the world. Market growth slowed to 7.8 per cent in 2002 with a number of countries reporting slowing growth rates. The German market was hit by the nitrofen food scandal while consumer demand in other countries--such as the UK and Denmark--appears to be stabilizing. Italy and Switzerland continue to report high sales growth. According to the report, some European countries are suffering from overcapacity--the net effect of slowing growth rates.

On the whole, global organic food production is being stepped up with almost 23 million hectares of farmland managed organically. Developing countries are seeing much of the increase, where some farmers, encouraged by governments, are attracted to the export benefits of organic food production. But the report raises a note of caution, warning that the potential of export markets is often overstated.

Market growth rates are slowing and supply-demand imbalances are expected to become a feature of the global organic food industry. While the industrialized world will glean most organic revenues, other regions are likely to show high growth due to the growing popularity of regional markets, highlights the report. The formation of trading blocs and convergence of consumer demand will also stimulate demand in other countries.