North American organic market becomes world’s largest: Report

16-Dec-2010 - Last updated on 16-Dec-2010 at 16:34 GMT

The North American organic food and beverage market has overtaken Europe to become the biggest organic market in the world, according to a new report from Organic Monitor.

However, despite fast growth in the amount of organic farmland in North America, production has not increased quickly enough to keep up with demand, leading to a shortfall in supply filled by imports from other countries. Latin America in particular has become a major source of organic fruits, vegetables, meats, seeds, nuts and ingredients for the North American market.

Globally, the organic food and drink market has seen growth rates slow during the recession to just under five percent per annum, when it had previously had several years of double-digit growth. But Organic Monitor’s Global Organic Food & Drink Market report said that the sector is beginning to pick up.

“Healthy growth rates are resuming as 'mainstreaming' of organic products continues. A major driver of market growth in all geographic regions is increasing distribution in mainstream retailers,” said the market research organization.

The report found consumer perception that organic foods are expensive continues to hinder growth in the sector, despite a price differential as low as 15 percent for some product categories, it said. Nevertheless, higher prices for organic products restrict demand to wealthy consumers.

Organic Monitor said it expects organic farmland to increase in developing countries, with demand remaining concentrated in affluent countries.

The US organic market has held up better than other regions, with sales of organic food more than tripling since 2000, from 1.2 percent of total food sales to 3.7 percent last year, to reach $24.8bn, according to Organic Trade Association figures. And the organic sector has continued to grow at a faster rate than the food industry as a whole. US organic food sales were up five percent last year, while general food sales grew by just two percent. Organic Monitor said that revenues are projected to approach $60m this year.

More information on its report is available at www.organicmonitor.com.

The market researcher is also planning a Sustainable Foods Summit in San Francisco in January. www.sustainablefoodssummit.com.