Global Organic Market Forecast
As shown in the graph below, the global organic food and beverage market has been steadily increasing for the past 20 years. This shows the strength of the market, receiving an average growth rate of 5 billion since the turn of the decade.
The global organic food and beverage market is expected to reach $US 679.81 billion by 2027, growing at an estimated CAGR of 17.05% over the forecast period. The expected growth is supported by the growing awareness of the advantages presented by organic food and beverages.
Export and Import Analysis
The leading organic product exported in 2019 was Organic Apples, with an export value of US$107 million, followed by Organic Grapes with US$74 million and Organic Lettuce with US$61 million.
The leading organic product imported in 2019 was Organic Arabica Coffee, with an import value of US$329 million, followed by Organic Bananas with US$269 million and Organic Blueberries with US$198 million.
The volume of organic imports greatly outweighs the volume for organic exports, as the top five imports are valued higher than the top export. This suggests an imbalance in domestic supply faced with increasing demand.
Trend Analysis
Demand for organic food and beverages is growing. This growth is largely due to an increase in health-conscious consumers. In 2019, segments that were trending in the organic food and beverage industry were Grain-free/ Gluten-free, Grass-fed/Pasture-raised, and healthy snack foods.
“Grain-free” labelling is among the fastest-growing claims by organic food producers in 2019. Several leading names in the market are introducing products that satisfy the large array of allergy restricted diets.
A hot trend at Expo West was Grass-fed/Pasture-raised meat and dairy products. Humanely raised and healthily fed meat and dairy products are attracting consumer interest, as several large names were experiencing strong results at Expo West by marketing their farming process.
Another trend in the organic food and beverage market is healthy snacking. Consumers are looking for healthy options to satisfy their cravings throughout the day. Companies are experimenting with plant-based protein bars and organic corn chips while revisiting granola-based snacks.
Unites States Organic Market Analysis
The US organic food market has strong growth opportunity. The distribution of organic food share in the US market is growing, with a 5.7% share in 2018. The dominant global revenue distribution paired with the increasing trend of health-conscious consumers, shown by the increasing organic food share, makes the US market favorable for new competitors.
Older Millennials in the United States rank highest in consumer willingness to pay a premium for natural or organic products, followed by Young Millennials and Gen Xers. 41% of Older Millennials are willing to pay a premium for natural or organic products, followed by Young Millennials at 39% and Gen Xers at 39%.
There is a positive relation between income level and willingness to pay a premium for organic products in the United States. 38% of Americans with incomes levels of $100,000 or more are willing to pay a premium for organic products, followed by 33% of Americans with income levels between $55,000 and $99,000 and 25% of Americans with income levels between $35,000 and $54,000.
The United States organic food market has been growing rapidly, however, US production has been slow to adopt organic farming. This has led to an increase in organic imports into the US. Reports show that the US imports around 75% of organic soybeans and roughly 50% of organic corn.
In addition, more than half of organic fruit consumed in the US and almost a third of organic vegetables consumed in the US is imported. As the organic food market continues to grow, the United States becomes more reliant on imports to fulfil consumer demand.