Due to lack of official foreign trade statistics we continue to depend on trade estimates of retail market sizes, although we can benefit from some recent surveys on organic products carried out by various certification bodies and other professional organic organizations with access to relatively reliable information, as well as information from specialized trade journals and Web sites, etc. 

A previous ITC overview (compiled in January 2002) estimated world retail sales (in 16 European countries, USA and Japan) at about US$17.5 billion in 2000 and about US$ 21 billion in 2001, which indicated a strong increase from an estimated US$ 10 billion in 1997. However, because of greatly overstated figures for Japan (see below), which included mainly non-certified products like “green products”, total world retail sales were somewhat overstated. A more accurate estimate of world total for 2000 would probably be around US$ 16 billion, reaching about US$ 19 billion in 2001. 

In the following, we shall look at recent developments in major world markets and put forward some forecasts for 2003.

In Europe, market developments have differed considerably from market to market as they have entered various stages of the product (life) cycle. The Danish market for example, largely stagnated in 2001 and, as a whole, actually declined somewhat in 2002 (caused mainly by the dairy sector, while some other product sectors experienced growth).  In Germany, the market has likewise stagnated and even declined periodically during the last couple of years, at least in some food sectors and retail channels, although it has continued to grow in others. The German market has been badly hit by food scandals, in particular the Nitrofen weed killer/animal feed crisis involving organic chicken and eggs, which also caused considerable concern in most neighbouring markets. 

Other markets went through a more positive development, although in several cases there has been a certain slowdown during the past year. The market in the United Kingdom increased by more than one third in 2000/01 according to a Soil Association report, while it increased by up to 15 percent in 2001/02. The Dutch market grew by over 20% in 2001, according to Platform Biologica, although growth is said to have slowed down in 2002. BIO Suisse claims that the Swiss market expanded by 17.5% in 2001, and expected further growth the following year. Switzerland has probably become the market where organic food has the highest share of total food sales.

Sales in Italy, France, Sweden, Austria, Belgium, Norway, Finland and Ireland likewise grew, at various rates, over the period 2001-2002. Spain, an important producer of organic food, remains a fairly small market together with Greece and Portugal. It is interesting to note that several transition economy countries, in particular the Czech Republic, Hungary, Poland and the Baltic states, are becoming increasingly important in organic farming and are also developing into small but promising markets. In 2001, the European market was estimated at just below US$ 9.0 billion. With expected annual growth rates between nil and 20%, depending on the market in question, retail sales in the European countries under survey are expected to total US$ 10-11 billion in 2003.

Outside Europe, the United States – the world’s biggest organic market with sales of about US$ 9.5 billion in 2001 - continues to offer interesting opportunities for exporters, including those from developing countries and transition economies, in particular the following product groups: tropical products that are not produced domestically; off-season products, such as fresh fruit and vegetables, where there is unmet demand outside the US season; in-season products, for which there is a temporary or more permanent shortage; and finally novelty or specialty products, like certain ethnic food products or retail-packed food products. European producers are likely to find outlets for a whole range of packaged food and beverages.

In 2003, retail sales are expected to reach the US$ 11-13 billion range. Annual growth rates between 15-20% are expected over the next few years, which makes the United States the most vigorous organic growth market.

Canada has also become an important market for organic food products, and was estimated at about US$ 650 million in 2001. According to trade sources, 85-90% of retail sales are imported products, mostly from the USA. Although the USA is, by far, the largest exporter to Canada, it must be noted that much of this trade consists of non-USA products, e.g. fresh produce originating in Latin America and packaged food from Europe, being re-exported by American companies who have fairly easy access to the Canadian market. The market is reportedly growing fast and a number of new encouraging developments are taking place.

It is significant that the major retail organizations, including the largest of them, Loblaws, are moving aggressively into organics. Considering these and other positive developments, retail sales are estimated to reach US$ 850-1,000 million in 2003. Growth rates are likely to be between 10-20% over the next few years.

As shown above, Japan is a particularly difficult market to quantify as far as organic food is concerned. It is well known that there is a large market for "specially cultivated crops" or "green products" (grown with reduced use of chemical pesticides and fertilizers). In 2000, the market for "green products", including organic food, was estimated at US$2-2.5 billion. Until recently "green food" was considered as organic food. However, new standards for organic products (JAS) have been introduced by the Japanese Ministry of Agriculture (applied since 1 April 2001). As defined by JAS, the Japanese market for certified organic food was probably maximum US$ 250 million in 2000.

The market is reported to be growing rapidly, as consumers are becoming increasingly concerned not only with their health but also with the environment. The introduction of a JAS label for organic products, greater awareness of what organic food is, clearer rules and regulations, etc. are also expected to have a positive effect on future sales. Retail sales are estimated to reach the US$ 350-450 million range in 2003 with the long term potential being much greater.

Although Australia has the world’s largest area of certified organic farm land (mainly for grazing), it is fairly small as a market for organic products. Most of its production (mainly meat products) is being exported. Fruit, mainly apples, is also important. The market is reported to grow rapidly, albeit from a small base. New Zealand is another important producer of organic food, and exports (mainly fresh fruit, but also fresh and frozen vegetables, honey and some meat) are significant. The market appears to be growing rapidly.

In both Australia and New Zealand imports are relatively small, but are becoming more significant. Import items are mainly those products that not produced domestically. Total retail sales in Oceania taken as a whole are forecast to be in the range of US$ 75 –100 million in 2003, though it must be noted that some market analysts estimate the figure to be much higher.

Based on the above estimates, world retail sales (in 23 European countries, USA, Canada, Japan and Oceania) will reach US$ 23-25 billion in 2003, and will probably be around US$ 29-31 billion in 2005.

However, a number of factors make this a particularly difficult time to come up with reliable forecasts of the organic food market, or any other market for that matter. The economic situation remains uncertain in many important markets. The geopolitical situation, both in the Middle East and elsewhere, is another critical factor. New food scandals related to non-organic food may affect sales of organic food positively. Possible future fraud cases in the organic trade will have the opposite effect.

As shown in the table, overall growth expectations for the short to medium term have been reduced somewhat compared with previous years figures, although they are still high compared with most other food categories traded internationally.

While many observers of the organic trade currently appear to be relatively pessimistic because of a certain slowdown, at least in some markets, over the last couple of years, others look much more optimistically at the future. Although it is correct that growth rates have declined, it must be remembered that the organic trade has enjoyed exceptional growth over a fairly long period, which makes a slowdown natural and perhaps even healthy in the longer run, as it gradually becomes a more mature business.

Several developments that are likely to have a positive effect on the organic trade worldwide should also be mentioned, for example, that several developing countries, including Argentina, Brazil, Chile, China, Egypt, India, Malaysia, the Philippines and South Africa, are developing significant domestic markets (in some countries pushed by big European retailers, like Ahold (Dutch) and Carrefour (French), in addition to their export sales; that organic products continue to enter the mainstream retail trade; that major food manufacturers increasingly develop organic product lines; that organic aquaculture is expanding rapidly in many countries; that organic hotels and restaurants continue to expand; that organic non-food products, including textiles and even Christmas trees, are gaining market shares; and that Governments, international organizations, NGOs and other organizations are paying more and more attention to the development of organic farming and the promotion of international trade in organic products.