Rise in awareness of disadvantages of inorganic food on health has shifted the trend to develop organic food which is expected to drive the market of organic food & beverages majorly. Factors such as awareness about the harmful effects of synthetic ingredient and desire of improving overall health are expected to spur the organic food & beverages market in coming years. Health risks related to the use of inorganic food due to the presence of different preservatives and chemicals such as antibiotics, pesticides and other drugs are expected to increase the awareness of organic products usage, expected to impact the market growth positively. Consumers are expected to turn towards organic food & beverages to avoid adverse effect on health in long term due to non toxic and environment friendly characteristics of organic food. Furthermore, participation of government to help consumers understanding the difference between falsely labelled and legitimate organic products is anticipated to impact the market growth over the forecast period.
Awareness towards organic benefits, implementation of government regulations and increased organic farming in the world are the key drivers of the organic food & beverages market, expected to drive the market growth. However, short life span and higher prices of organic food compared to conventional inorganic food are expected to hamper the market growth in coming years. Rise in demand of organic food & beverages in conventional food stores such as Tesco, Walmart and Safeway is going to make them sell organic products due to increasing interest of these large retailers. The market is also expected to get advantages from financial aids, subsidies and R&D programs by different government and non-government organizations such as FiBL (Switzerland), the USDA and APEDA (India) to help conventional farmers to shift to organic farming. These factors are expected to drive the market growth potentially over the forecast period.
Organic food & beverages consist of products from organic fruits and vegetables which have emerged as leading products. Furthermore, meat, poultry & fish products are also expected to witness the fastest market growth over the forecast period. Organic frozen food is upcoming growing products of organic food & beverages market. Organic tea and coffee are the products under growing organic beverages market. However, organic wine as well as organic beer is expected as fastest growing products under organic beverages market in coming years.
Organic farming is carried out in more than 160 countries globally. U.S., Argentina and Australia are leading in terms of having largest area for organic farming. Europe closely follows the market share of North America. Germany is expected as the biggest consumer of organic food and beverages product in Europe. However, Asia Pacific is expected to witness the fastest growth of organic food and beverages in coming years. Japan is expected to be a biggest region in terms of consumption in Asia Pacific over the forecast period.
Organic food & beverages market is highly fragmented and has opportunity for consolidation. Due to many vendors in market, the competition is high and hence players are expected to keep innovating their products as well as strategies to gain competitive advantage. Technological advancements coupled with scientific expertise and energy/labour cost may help the players to develop healthier, innovative and nutritional products which are expected to raise the profitability of the players. Key players include Organic Valley, The Hain Celestial Group Inc., Whole Foods Market, Nestle SA, Amy’s Kitchen Inc., Kellogg Company, The Coca-Cola Company, Kraft Foods Group Inc., Starbucks Corporation, Groupe Danone SA, Dean Foods Co., Eden Foods and PepsiCo Inc.
Research Support Specialist, USA