The Organic Industry Grew Despite the Global Financial Crisis
The Global Financial Crisis (GFC) started mid 2008 and continued though 2009. There continues to are mixed signals about the recovery with some major economies like China and India showing rapid growth, others like Australia Japan, France and Germany having moderate growth and quite few economies like the USA, UK, Greece, Spain, and Italy still in recession.
Now that 2010 has started it is interesting to see that the organic sector was largely unaffected by the GFC.
Organic Federation of Australia
A REVIEW OF ORGANIC TRADE IN 2009 - 2009 GLOBAL FINANCIAL CRISIS
The organic sector is the fastest growing area in food trade, with sustained rates of growth around the world. Despite the global slowdown the trade in organic products continued to grow in 2008 and 2009.
Market information from USA, Europe and Australia is showing an increase in sales of fresh and staple organic produce. The feedback we are receiving from the retail and wholesale markets shows that consumers are choosing to prepare and cook more meals at home and spend less on high end products such as cars and TVs.
There have been declines in some of the more expensive packaged organic products; however this is offset by increase in the other products. As well as increases in fresh food sales, the sales of organic body care and cosmetic products continue to increase.
The global recession had no impact on Biofach in Germany, which was slightly larger in 2009. Over 46,000 trade visitors from 130 countries and 2,717 exhibitors spread over 12 halls participated in the largest global organic event. This is similar to 2008 when more than 2,600 exhibitors presented their products to 46,484 trade visitors from 116 countries.
Global demand for organic foods is expected to grow by 46% over the coming five years despite the world economic crisis, according to an outlook from the United Nations Trade and Development Agency (UNCTAD).
Although organic retailers are experiencing consumer resistance to paying more for organics, UNCTAD says many consumers have weighed the higher cost of organic food against its benefits - concluding that organic products are worth the extra cost.
The report notes consumers seem reluctant to give up the last vestiges of high-quality, gourmet food, adding "they want something a bit more interesting than your standard meat and three vegetables."
World sales from certified organic products are expected to reach US$67 billion in 2012, up from US$46 billion in 2007 and about US$23 billion in 2002.
Organic produce is attracting a much wider demographic than previously seen - highlighting the need for more farmers to start supplying organic. UNCTAD says that in developing countries, the increasing number of organic food consumers offers extremely important benefits for small-scale traditional farmers.
The US Organic Trade Association (OTA) presented its 2009 Organic Industry Survey at Biofach in Germany, showing that despite the deep recession there has been a significant increase in the sales of organic home consumables which has more than compensated for the decrease in the high end processed organic products.
U.S. sales of organic products, including food and non-food, reached $24.6 billion by the end of 2008, growing an impressive 17.1 percent over 2007 sales despite tough economic times, according to the Organic Trade Association.
This rate, which would be considered healthy growth in normal times, is all the more impressive with the current state of the global economy. While other sectors are seeing declining, organic agriculture and products provide a bright spot in the U.S. economy.
The latest report from Italy shows a 20% increase in sales of fresh and processed fruit and vegetables. Sales of baby food rose by 16%, bread, pasta, rice and eggs by 14% while packaged organic products rose by 5.4% in value in 2008, according to data released by ISMEA (Institute for Agricultural Market Studies). The survey was carried out in cooperation with Nielsen.
Sales of coffee, tea, biscuits and sweet snacks, however, dropped by 14%.
20% of the total amount spent on organic packaged products was spent on dairy products, 19.5% on fruit and vegetables and 14% on breakfast products. The individual products purchased the most were eggs, fresh milk and yogurt, as well as soy drinks, baby food, fruit juices, olive oils and pasta. Purchases at discount stores increased by 45.9%.
The Czech organic market turnover grew by 40% in 2008. The Czech organic market has been rising very dynamically over the last three years. The overall turnover rose by more than 250% since 2005. Turnover of organic food grew by 40% in 2008 and reached 1.8 billion CZK (68 million €).
Global retail sales of Organic Cotton apparel and home textile products are claimed to have reached an estimated US$3.2 billion in 2008, according to the Organic Cotton Market Report 2007-2008.
Released by the non-profit organisation Organic Exchange, the sales are said to represent a 63% increase from the $1.9 billion market in 2007.
The report says the top 10 organic cotton-using brands and retailers globally are Wal Mart (USA), C&A (Belgium), Nike (US), H&M (SE), Zara (Spain), Anvil (US), Coop Switzerland, Pottery Barn (US), Greensource (US) and Hess Natur (Germany).
Despite the global retail outlook, most brands and retailers selling organic cotton products remain committed to their sustainability plans and upbeat about market growth with plans to expand their product lines 24 and 33% in 2009 and 2010 respectively, to result in an estimated $4billion market in 2009 and a $5.3b market in 2010, the report says.
The amount of organic cotton farmers grew worldwide in 2007-08 by 152%, according to OE's Organic Cotton Farm and Fibre Report 2008, organic cotton production increased to 145,872 tonnes (668,581 bales) grown on 161,000 hectares in 22 countries worldwide up from 57,932 tonnes produced in 2006-07.
OE said that during 2008, certified organic cotton fibre supplies grew by 95%, significantly higher than annual growth rates of 45% in 2006 and 54% in 2007.
Two of the certifiers in Australia and New Zealand are reporting increases in certified producers. Despite the Global Financial Crisis, the Organic Food Chain, Australia's third largest certifier reports that the number of certified organic operators accredited by the OFC is rising daily.
BioGro New Zealand is hiring extra staff for the second time in a month as it tries to cope with a demand for its certification label, which is still growing at about 15 per cent a year.
BioGro's chief executive, Michelle Glogau, says there is a "dramatic natural surge" in the number of people seeking organic certification. She says phenomenal growth in viticulture certification has dominated the scene, with the number of BioGro certified vineyards doubling in the past year.
Part of the driver has been NZ Winegrowers' target for all vineyards to participate in independently audited sustainability programmes by 2012. Organic certification with BioGro is recognised as meeting this.
The number of BioGro-certified livestock farms has also increased by 68 per cent during the past year, while traditional areas such as kiwifruit and pipfruit have maintained steady growth around 8 to 9 per cent, regardless of the economic gloom.
Michelle says, "BioGro now has close to 1000 certified operations - more than double the next largest certifier - and almost 100,000 hectares under certification."
She sees other big future growth areas in organic health and body care and textiles.
Solid demand in the US export market has been one of the driving factors behind growth for one of the largest producers of Certified Organic beef in Australia.Since April last year, The Organic Meat Company has doubled its production of Certified Organic beef, in the latest phase of development for the company.