Organic Food and Beverages take the World by Storm, Increasing Health Awareness Fuels Demand for Organic Products

At present, the use of artificial ingredients in food is a major concern for which consumers worldwide are seeking a solution. In several parts of the world, packaged and prepared food and drinks are perceived to be overly processed and nowhere close to food found naturally or to the food prepared from scratch in home settings. Consumers globally are crafting their own preferences for ingredients, with many people wary of artificial colors, preservatives, and sweeteners. Due to these reasons, consumers are seeking food that is simple and is prepared using fewer ingredients.

Q. What are the forces driving the growth of the organic food market?

A. The global organic food market is on a growth trajectory due to several reasons. The increasing preference for foods that are grown without the use of synthetic chemicals, coloring agents, additives, or genetic manipulation are the major factors driving the organic food market. Foods that are produced organically are considered to be safe for health, provide more nutrition, and better tasting than conventionally grown food.

In particular, in urban areas, consumers are adopting health-benefitting foods, which include organic foods as well. Consumers have a strong perception about the health benefits of naturally cultivated foods in the long run. Government regulations in place pertaining to the use of artificial ingredients and flavors in foods is also limiting their use. The rapid expansion of the organic food distribution channels is also boosting the global organic food market.

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Moreover, rising disposable incomes and increasing awareness among middle-class consumers about the health benefits and environmental benefits of organic food, predominantly in emerging economies is benefitting the global organic food and organic beverage market.

Q. Is the organic food and beverages market expanding in emerging economies?

A. Yes. The organic food and beverages market is in expansion mode in emerging economies. From the traditional markets of Europe and North America for organic food and beverages, the increasing demand for organic food and beverages in China, India, Mexico, Brazil, and Argentina have aroused the attention of organic food manufacturers for expansion in these countries.

In particular, Asia Pacific is expected to be the most lucrative market for organic food and organic beverages and display a growth rate of 28.2% between 2013 and 2019. The growth of this regional market is attributed to the increasing environmental consciousness and the increasing affinity for organic ingredients.

Q. What lies in store for the French dairy giant Danone with its purchase of White Wave Foods?

A. The all-cash transaction between Danone and the U.S organic food producer White Wave Foods, which valued the latter at US$12.5 billion, will lead Danone to be a world leader in organic produce. Furthermore, this will allow Danone to grow its business in the U.S. and occupy a unique position in the organic food and beverages space. The deal is expected to allow Danone to tap into consumer trends to develop healthier and more sustainable food and beverages.

Rising Perception of Organic Food as Healthy Food Drives Global Organic Food Market

The word organic refers to a particular way farmers can cultivate and process agricultural products such as fruits, vegetables, grains, meat, and dairy products. Designed to encourage soil and water conservation, organic farming involves practices by which pollution can be reduced. This is achieved by making use of natural fertilizers as opposed to chemical ones and using crop rotation or mulch to manage weeds, unlike the conventional methods used to control the growth of weeds. Organic foods are produced using animal and environment friendly farming methods.

According to Transparency Market Research, the global organic food market had a valuation of US$70.7 bn in 2012. Exhibiting a robust 15.5% CAGR from 2013, the market is expected to rise to a valuation of US$187.8 bn by 2019.

Recognize Authentic Organic Food

Organic foods are foods that are produced by methods that comply with government standards laid down by the U.S. Department of Agriculture or USDA. These standards regulate how food items are grown, processed, and handled. Any food product or beverage labeled as organic must be USDA-certified. The goal of the organic regulatory bodies is to monitor and control farming practices and the way food is produced, in order to decrease the contamination of food and to improve the quality of food or beverages. If any food or beverage product bears a USDA Organic label, the product is organic.

Don’t Get Confused between Natural and Organic

Most of the health-conscious population refers to organic food as being natural food and uses the terms interchangeably. However, this is not how it is. Organic food comprises food and beverages that use ingredients grown and processed in a particular way regulated by the USDA organic standards, and natural foods simply mean that the food or beverage has not been altered chemically or synthesized in any form, and does not contain hormones, antibiotics, and artificial flavors.

What Makes Organic Meat and Poultry Different?

Organic meat and poultry is meat that comes from livestock fed on organically produced forage and agricultural products. In organic poultry farming, animals are not administered growth hormones, vaccines, and synthetic feed additives. They are not exposed to synthetic parasiticides, and are bred in a clean and sanitized environment, where they enjoy freedom of movement, thereby suffering minimal stress.

Health Benefits of Organic Food and Beverages

Although there has been no evidence that organic foods and beverages are healthier and more nutritious than non-organic food and beverages, the market for organic food and beverages is soaring due to the increased belief among people that organic food is safer, since there is no involvement of synthetic chemicals in their production. Moreover, choosing organic foods and beverages can reduce the risk of consuming heavy toxic metals and increase the intake of desirable antioxidants and omega-3 fatty acids.

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Popular Organic Beverages

Organic tea and coffee and other non-dairy beverages are quite popular among people. According to a report published by Transparency Market Research, a market intelligence firm, the organic tea and coffee, and non-dairy beverages segment accounted for 75% of the global organic beverages market. Due to the lack of new product development, however, the market for these beverages remains stagnant, as they have been in the market for quite some time now. However, the beer and wine segment of the organic beverages market is anticipated to grow at a CAGR of 24.5% and lead the market for organic beverages.