The future of organic food in the world
19 Aug 2021
The increased presence and visibility of organic products in the sales channels of large stores – supermarkets and hypermarkets – seems to reflect the growing preference of consumers for them as a result of the benefits attributed to them.
Since the beginning of the pandemic, various changes were observed, from social to productive and economic changes. In turn, in this new stage of normality, changes in routines and eating habits are observed. Before Covid-19, consumers had several meals outside their home, and now they have started to buy all of their groceries from supermarkets and warehouses. Although a part of the population already gave importance to the food they consumed, now there is a greater awareness of the diet and the products ingested.
The aforementioned points out and coincides with the latest survey published by the Organic Agriculture Research Institute (FiBL, for its acronym in English), where the agricultural area dedicated to cultivation under organic practices increased by 1.1 million hectares (has .) during 2019 compared to the previous year (latest data available), totaling 72.3 million hectares worldwide.
Regarding the geographical location of this area dedicated to organic crops, half of it (36 million hectares) is located in Oceania, with a high concentration in Australia. For its part, the European continent has, with 16.5 million hectares, the second most relevant region in terms of the area destined for this type of production, followed finally by Latin America, which concentrates 8.3 million hectares. In this regard, it is interesting to note that the area destined for organic production increased during 2019 in all the geographical areas indicated compared to 2018, with the exception of Asia, due to a retraction of the same in China.
In turn, in quantitative terms it should be emphasized that the world organic food market reached 106,000 million euros in 2019, equivalent to approximately US $ 90,000 million at the annual average exchange rate, led by the United States (USA). US) with € 44.7 billion (US $ 38 billion), followed by Germany (€ 12.2 billion or US $ 10.4 billion) and France (€ 11.3 billion, or US $ 9.6 billion).
Various relevant markets continued to show strong growth rates during 2019. Thus, for example, Danish and Swiss consumers increased their expenditures on organic food (344 euros or US $ 290 and 338 euros or US $ 285 per year per capita, respectively ), and it can be highlighted that Denmark registered the highest market share in the consumption of organic products, which accounted for 12.1% of its total food market.
As a result of the global evolution described, the sector of foods of organic origin has become one of the most dynamic segments of world production in the field of processed foods, forcing the manufacturing companies of this industrial branch to maximize their efforts to detect the preferences of its consumers early, with the aim of achieving differentiation in a transformative way with respect to its competitors.
Indeed, it should be remembered that in the case of the food industry – and in particular in the increasingly dynamic segment of so-called “organic products” – early modernization of the offer allows innovative companies to advance towards a privileged, vital position. to access particularly demanding developed markets, such as the US and the European Union (EU).
Thus, the aforementioned expansion of the area dedicated to organic crops responds to a notable expansion in world demand for foods within this category in a vast series of markets, among which the USA stand out – followed by Germany and France-, registering significant growth rates that in the latter case exceeded 13% per year.
Indeed, it can be verified that this nutritional trend -qualified as “healthy” – has reached a significant advance during the last decade, since consumers not only began to require functional foods, but also prioritized those considered from a nutritional point of view more beneficial to health.
In this sense, the increased presence and visibility of organic products in the sales channels of large supermarkets – supermarkets and hypermarkets – seems to reflect the growing preference of consumers for them as a result of the benefits attributed to them.
Thus, this expansion in the gondolas of the major points of commercialization aims to gain new potential customers who are apparently concerned about the eventual incorporation into their food of ingredients of transgenic origin or others that they consider potentially harmful to meats derived from various species of breeding, presumably aspiring to protect their health.
At the same time, organic and ecological foods are progressively associated with less use of recyclable packaging, with which consumers concerned about environmental care also consider contributing to their consumption for a double purpose.
In this context, many ingredients of organic origin are increasingly used in the food service sector -both in the US and the EU- where an increasing number of small businesses, as well as restaurant chains -including those of food fast – are substantively committed to supplying organic products.
In this regard, it can be noted that in the first session of the cycle “Health and Organic Production” organized in 2020 by the Inter-American Commission on Organic Agriculture (CIAO), the Inter-American Institute for Cooperation on Agriculture (IICA) and the Ecovalia Association, the role of organic food production in the context of the ongoing pandemic, as well as its future expectations once it is overcome.
The CIAO president considered that this profound crisis of a global nature offers a great opportunity for organic, ecological and biological foods, as they allegedly promote a growing role for the protection of the environment and the health of consumers.
Likewise, the president of Ecovalia highlighted that the organic sector has made an important contribution to health care during the pandemic by offering safe, healthy and beneficial food for consumers, which was reflected in an increase in sales of organic production , since society generally presumes to improve its protection against this health crisis through the intake of foods originating from organic production, which is predicted a future of even greater prominence.
Indeed, the pandemic has evidenced the advance of remote marketing forms such as the “online” modality for home delivery of fruits and vegetables – highlighting the distribution by said route of bags of fresh agroecological merchandise – a situation that does not it seems destined to recede as long as persistent unrest among consumers persists.
At the same time, as regards the regulatory field, it should be borne in mind that it is the responsibility of the National Service for Agri-food Health and Quality (Senasa) in our country to establish the requirements for the authorization of those private firms -nucleated in the Argentine Chamber of Certifiers “technically qualified to guarantee compliance with the technical and quality conditions of organic production, as well as control the correct application of current regulations.
In this way, it should be noted that the certification granted by Senasa guarantees the consumer the condition of those products that meet all the requirements and protocols established to be considered “organic”, such as the exclusive use of natural fertilizers during their production process. free of chemicals, as well as guaranteeing the maintenance of biodiversity through a sustainable and healthy production of harvesting, transportation and waste management.
Finally, according to the report on the Situation of Organic Production in Argentina during 2020, published by Senasa, containing the latest official data available, it can be concluded from a commercial point of view that: a) the main destinations of organic products are still exports to the European Union and the United States; b) The United States ceased to be the main destination for exports of Argentine organic products; c) the European Union market was recovered as the main destination for our exports, constituting 46% of the products; d) total exports of certified organic products decreased 17% compared to 2019; e) compared to the previous year, only exports of vegetables and legumes increased; f) organic cereals and oilseeds have fallen again for the fourth consecutive year; g) the consumption of organic products in the local market continues to show a low share of the total certified volume, but continues its upward trend; h) exports of products of animal origin have decreased, but exports of sheep activity (meat and wool) stand out; i) the area under monitoring grew and reached 4.4 million hectares. The productive units under monitoring increased by 6%; j) cattle stocks rose again, sheep stocks also increased, and k) in beekeeping exports decreased, as did the number of hives under monitoring.
Likewise, a study by the area of the Industrial and Prospective Economics Studies Unit of the National Institute of Industrial Technology highlighted that the organic area harvested in Argentina grew 20% in 2020 and compared to the previous year, which is 4.4 million certified hectares. This means that the country is second in the ranking of land area certified for organic food production, only behind Australia.
It should be noted that in January of this year (2021), with the focus on “sustainable agricultural production”, the Ministry of Agriculture launched a Strategic Plan for the Argentine Organic Production sector in 2030. The objective is to position organic production ” as a differentiated production model for productions, both primary and industrial, based on environmental preservation, sustainability and sustainable development ”, and thus achieve“ greater production, as well as a greater number of producers and jobs with territorial roots ”.
From the portfolio they highlight that towards the end of last year there was an increase of 14% in sales and volumes of organic products compared to the previous year, and its main reason was the change in consumption habits as a result of the Covid-19 pandemic .
For the rest, regarding the internal consumption of organic food in our country, a national survey by the Universidad Argentina de la Empresa (UADE) -together with the consulting firm Voices- indicated that 46% of those consulted stated that they had ingested some product of the category during 2018 – latest data available-, a parameter to which vital relevance is assigned for the future potential of the sector if it is taken into account that only 26% of those surveyed expressed themselves in this regard in 2015.
In conclusion, the trends of a percentage of consumers – increasingly severe and strict in their dietary requirements, particularly in high-income countries – encourage new business opportunities for suppliers of organic food and beverages, which presents a promising horizon for local producers of “certified” goods capable of guaranteeing compliance with internationally recognized standards and principles for organic production, thus opening up new niches for the international commercialization of agro-industrial products.
Source: El Economista