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Becoming the food trend of health conscious millennials, the organic market was at USD 106.21 Billion in 2015- Bonafide Research
Aug, 31
2022

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Becoming the food trend of health conscious millennials, the organic market was at USD 106.21 Billion in 2015- Bonafide Research

 

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Organic food and beverage are composed of natural and organic ingredients that are cultivated as per the standards of organic farming. These food products and beverages are produced without any synthetic chemicals, including fertilizers, pesticides, and hazardous chemicals, and have a longer life span. They are rich in nutrients such as vitamins, minerals, antioxidants, carotenoids, magnesium, iron, and phosphorus, with no exposure to nitrates and pesticides. With rising consciousness among millennials towards the environment and sustainability, many are exploring food options that are free of chemicals, fertilizers, and pesticides and something that is less processed. The recently published report titled, 'Global Organic Food & Beverage Outlook, 2026', by Bonafide Research has classified the market into organically produced food range of fruits & vegetables, meat, fish & poultry, dairy products, and frozen & processed products while the beverage segment includes a range of dairy alternative, coffee & tea, beer & wine among others.

Amidst the global pandemic crisis and the indefinite lockdown across global, the organic food & beverage industry witnessed a high. In the year 2020, the market experienced a YOY growth at a rate of 13.24%. Organic foods and beverages offer ample advantages over conventional foods such as health benefits, free of harmful chemicals, and others. The organic food market has a high share of organic food compared to organic beverages, dominating the market with a share of over 90% since 2015. With the increase in awareness and easy availability, the organic beverage segment has gained more acceptance in the market and reach over a value of USD 30 Billion by the end of the forecasted period.

The rapid growth of demand for fresh and healthy foods drives the market to take a hike. In 2020, the organic fruits and vegetable segment registered the highest market share of 40.35% of the total market share. Organic coffee and tea are to witness higher demand potential, due to unique advantages such as helping in weight loss. Penetration of organic beer in recent years has increased because of its low-calorie with less alcohol content. The emergence of many local breweries and the increasing popularity of non-alcoholic organic beer among the younger population are promoting the sales of organic beer across the globe. Yet, the segment is to remain the least contributing segment with barely a share of 0.91% by the end of the forecasted period.

In 2018, 47% of the world’s organic producers were in Asia, followed by Africa (28%), Europe (15%), and Latin America (8%). The countries with the most producers were India (1,149,371), Uganda (210,352), and Ethiopia (203,602). There has been a decrease in the number of producers of almost 5%, compared to 2017. North America is the largest market since the year 2015, owing to the high presence of the target population in the region. The U.S., in particular, is the major consumer in this regional market due to high product demand because of changing lifestyles and increasing health consciousness. The country also leads the global market. The rising number of cafes and food chains in the country will have a positive impact on product sales. The Asia Pacific is estimated to be the fastest-growing market over the forecast period. This growth is attributed to rapid urbanization, rising disposable income levels, and the establishments of various international retail stores in emerging countries like China and India. Increasing awareness about the health benefits of organic food and beverages coupled with the advancement in biological farming techniques are anticipated to drive the demand in the region over the forecast period. The Latin America and Middle East & Africa regions together are expected to reach a market of 5% by the end of 2026.

The government participation in helping consumers to understand the difference between legitimate products and falsely labelled organic products has contributed towards overall market development. However, high prices of organic foods as compared to their conventional counterparts coupled with their short shelf life are expected to hinder the market growth over the forecast period. Organic beverages are more expensive than the traditional counterparts and likely to have favourable perceptions among consumers, who prefer a healthier lifestyle over high premium prices. The market is fragmented and consists of numerous small and large vendors. The market vendors compete based on factors such as price, quality, innovation, reputation, and distribution. Intense competition among players, along with rapid technological changes, poses significant risk factors for vendor operations. Therefore, to survive and sustain in the competitive market, it becomes important for manufacturers in the market to differentiate their products and services through a clear and unique value proposition. In addition, factors such as heavy investment and supportive investment policies by government organizations for organic farming provide lucrative opportunities to market players.