They predict an explosion in the consumption of organic food and beverages
01 Jun 2021
A new report published by the market intelligence consultancy, Fior Markets, forecasts that the global organic food and beverage market will grow from US $ 255.2 billion in 2020 to US $ 849.7 billion in 2028, which implies growth at a compound annual rate of 16.42%.
According to Fior, the study includes the analysis of more than 30 countries for each segment of food and beverages and shows a substantial change in consumer buying behavior. Increasingly, the public is demanding clean-label products and shows a greater interest in knowing the ingredients used in the products and at what levels.
“This interest in scrutiny of ingredients in foods and beverages has led to an increase in sales of organic foods and beverages that are clean-label products. Consumers have become more health conscious and, as a result, manufacturers are focusing on introducing natural fruit ingredients to their food and beverage products, ”the consultant said in a statement.
Consumers’ higher purchasing power makes them willing to pay a higher price for food whose production does not involve the use of synthetic and chemical ingredients, Fior said. At the same time, the increase in the number of dietary centers that provide the public with access to organic products is the other driver that is driving their greater consumption.
On the other hand, the higher prices of these foods are the factors that restrict their consumption, while the higher cost of production hinders the growth of the supply. However, investments in R&D and government policies in favor of a healthier diet are opening up new market opportunities, the consultancy said.
The global organic food market is segmented into organic dairy, organic fruits and vegetables, organic meat, fish and poultry, and frozen and processed organic foods.
The organic fruits and vegetables segment is the one that has been registering the highest growth, with 38% share in 2020. According to Fior, it is attributed to the growing inclination of consumers to consume only those products that come directly from the farm that comply with organic farming techniques.
In the case of organic beverages, the market is segmented into organic coffee and tea, organic non-dairy products, organic beer & wine, and others. The organic non-dairy segment dominated the market and had the largest share with 35% in 2020. This growth can be attributed to the growing adoption of vegan culture and the low fat content in non-dairy products. Organic coffee and tea is growing at the fastest CAGR due to increased economic conditions.
In the commercial sector, when analyzing the distribution channel, the global organic food and beverage market is segmented into convenience stores, specialty stores, supermarkets / hypermarkets, and Internet retail. The supermarkets / hypermarkets segment dominated the market and had the largest share with 42% in 2020. The consulting firm attributes the growth to the increase in the number of supermarkets / hypermarkets and the way in which they display a wide range of items belonging to different segments, where many are dedicating a separate section to the organic food and beverage market.