New ITC Organic Foods Report
Highlights
Strong Market Opportunities for Developing Countries
Organic food sales could jump from 1% to up to 10% of
total retail food sales in major markets over the next few years,
according to a new ITC market study. With retail sales of organic food
and beverages amounting to over US$ 13 billion in Western Europe,
the United States of America and Japan in 1998 (close to US$ 20
billion is forecast for 2000), trade in organic food and beverage
products has become an important and global agribusiness.
The new study, entitled "Organic Food and
Beverages: World supply and major European markets", highlights the
fast-paced growth that has taken place in recent years. The study
suggests that annual sales growth rates will range between 5-40% over
the medium term, depending on the market in question.
Leading markets
Taken as a whole, the European Union is the world’s
largest market, with retail sales of organic food and beverages
amounting to more than US$ 5 billion in 1997, followed by the United
States of America (about US$ 4.2 billion) and Japan (US$ 1-1.2 billion).
Within Europe, the most interesting markets are Germany (retail sales of
about US$ 1.8 billion in 1997), France (about US$ 720 million), the
United Kingdom (about US$ 450 million), Switzerland (about US$ 350
million), the Netherlands (about US$ 350 million), Denmark (about US$
300 million) and Sweden (about US$ 110 million). Other significant
markets are Italy (about US$ 750 million, almost entirely domestic
production) and Austria (about US$ 225 million).
Most major markets offer good prospects for suppliers of
organic products that are not produced domestically, such as coffee,
tea, cocoa, spices, tropical fruits and vegetables and citrus fruits.
There are also very good prospects for foods that are produced in the
main markets themselves. Such opportunities exist not only for
off-season products, such as fruits and vegetables, but also for other
products, such as "in-season" fruits and vegetables, cane
sugar, grains, cereals, pulses and seeds. These opportunities stem from
the simple fact that rapidly growing demand in most markets cannot be
met by local supply, at least in the short and medium term.
"There are good reasons to conclude that the
organic food and beverages market is growing rapidly in most developed
countries. It is also growing quickly in some developing countries,
though to a lesser degree," notes Rudy Kortbech-Olesen, the ITC
official who coordinated the study. "The share of organic
foodstuffs is still small in all of these markets, and several trends
point to significant scope for growth. For example,
consumers are increasingly aware of health and environmental issues.
Major retail groups are carrying out more goal-oriented, aggressive
marketing and promotion for organic products. Product development and
packaging innovations by food processors and manufacturers, as well as
supportive government policy in many countries, are other factors that
help increase world demand," he added.
Challenges for suppliers
Developing countries produce a wide range of organic
products and many are exporting them successfully. There is no doubt
that world markets for organic food and beverages will offer developing
countries good export opportunities. The challenges for suppliers are
three: certification, technical know-how and market intelligence.
Certification is a major issue for all suppliers, no
matter where they are located. Importers, food manufacturers, retail
organizations and consumers need a guarantee of organic origin.
Challenges specific to developing countries are lack of technical
know-how, such as on organic farming and production methods; and lack of
market information, such as information on which products to grow, which
markets and distribution channels to choose, competitors, market access
and financing possibilities.
About the study
The 271-page study covers world market trends, and
contains chapters on market requirements, distribution channels, market
access and market opportunities in Denmark, France, Germany,
Netherlands, Sweden, Switzerland and the United Kingdom. It includes a
chapter on the world supply situation by geographical region and country
as well as by product group. Finally, it devotes a chapter to
certification, explaining what it is; why it is necessary; regulations
in major markets; and options available to producers and exporters in
developing countries. It also provides trade contact information in the
markets surveyed as well as key names and addresses in many developing
countries and transition economies.
* * *
For more information
Contact Rudy Kortbech-Olesen, ITC Senior Market
Development Adviser, at: tel.: + 41 22 730 0253; fax: +41 22 733 8695;
e-mail: kortbech@intracen.org or Natalie Domeisen, Senior Public
Information Officer, at: tel. +41 22 730 0370; fax: +41 22 733 8695;
e-mail: domeisen@intracen.org
This news release can also be found on ITC’s Internet
site at http://www.intracen.org
To order a copy
The market study is free of charge to producers,
exporters and trade-related organizations in developing countries and
government officials in all countries. It is available for sale to
others for US$ 65.00. French and Spanish versions of the
publication will soon be available.
Payment should be made only by direct transfer of the
amount in US Dollars to Chase Manhattan Bank, NY, International
Agencies Branch, 270 Park Ave., 43rd Floor, New York, NY
10017, USA, A/C Name: UNOG General Fund, A/C No.: 001-1-508629
(ABA: 021000021) to the order of the International Trade
Centre UNCTAD/WTO. Other forms of payment cannot be processed for
technical reasons and will be returned to the sender.
* * *
About ITC
The International Trade Centre UNCTAD/WTO is the
technical cooperation agency of the World Trade Organization (WTO) and
the United Nations Conference on Trade and Development (UNCTAD) for
operational and enterprise-oriented aspects of international trade
development. As the United Nations focal point for technical cooperation
in trade promotion, ITC works with developing countries and economies in
transition to set up effective trade promotion programmes to expand
their exports and improve their import operations.
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