Demand for organics is at its highest level for many years, a decade according to some, as consumers are putting premium and clean labels before price across several food and beverage categories. As Europe, the UK and US markets recover from the economic downturn of the last ten years, coupled with the rise in purchases driven by ethics, shoppers are consciously searching for the “organic” credentials of their food and drinks - and manufacturers and retailers are listening.

Britain’s Organic Trade Board recently secured EU funding to help promote organic food in Britain and Denmark, Tesco reported a ten-year high in organic sales across multiple items, organic segments within companies are showing profits, while countless new product developments carrying organic-led claims hit markets all over the world.

From fresh fruit and vegetables to dairy, meat to a myriad of ingredients, organics is about premium quality and availability - and all the evidence points towards a continuation of this organics growth phase.

Innova Market Insights’ 2016 trends were led by “Organic Growth for Clear Label” on the back of strong growth in organic launches and efforts in the organic space has only continued.

Rabobank recently reported that the organic food industry in Western Europe and the US has been experiencing a prolonged period of high single-digit to low double-digit sales growth – and, on the back of ongoing health, food safety, and environmental and animal welfare concerns by consumers – expects this trend to continue.

“Until 2025, organic food sales in Western Europe and the US are forecast to grow (CAGR) by 6.7 percent and 7.6 percent, which is roughly three times faster than overall food consumption growth,” says John David Roeg, senior consumer foods analyst at Rabobank.

“Food producers should increase their focus on organic, through new products and brands, or through the reformulation of existing products to help grow their top lines. This will also help them to position themselves as responsible businesses.”

Global leader in specialty plant-based organics, Naturex, tells FoodIngredientsFirst that it expects its organic demand to continue growing by at least 10% over the next few years.

“There is strong customer demand for organic products on all our product lines: botanical extracts, fruit powders and natural colors. As the leading natural specialty player, we think it is essential to participate positively in this consumer-driven trend for cleaner, and healthier products in the food chain,” says Timothée Olagne, marketing director for nutrition & health in America.

“We expect demand to keep growing at 10 percent plus for the next five years. More and more companies are now working on product line extensions through the organic lens.”

He points out that the challenges and “limiting factor” is all about supply.

“Right now, the limiting factor is the supply. Consumer demand outpaces the capacity to sell organic certified ingredients. It takes time to get fields and a full supply chain certified.”

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Supermarket giant Tesco witnessed a 15% growth in total organic sales - not just in fresh fruit and vegetables but also organic dairy, fish and other general grocery items, proving popular with shoppers.

Areas that have seen the strongest growth include:

Fruit and vegetables including apples, bananas, carrots, salads and root vegetables – up by nearly 17%

Grocery items such as olive oil, pasta and cooking sauces – up by nearly 16%

Fresh meat including chicken, lamb chops, steak and eggs – up by 13%

Chilled foods such as milk, hummus and cooked meats – up by nearly 13%

“Due to our long-term partnerships with suppliers and producers across the UK, we’ve been able to improve the quality, range, availability and price of our organic products for customers.

“We are seeing that shoppers are increasingly looking to buy organic food but it needs to be affordable and consistently high quality all year round for it to be considered a viable option,” says Tesco organic food spokesman Tina Moore.

“The popularity of organic food began with fruit and vegetables but we are now seeing customers exploring areas such as grocery, fish and dairy, so you can now use organic produce for the whole meal.”

Last Autumn Tesco teamed up with the Organic Trade Board on an initiative called The Organic Unboxed which helped customers discover the breadth of the range on offer in its stores by providing boxes containing organic goodies to help shoppers create their own organic meal at home. The project saw 7.5 million Tesco online customers receive a free ingredients box with a recipe card and information on how to cook a tasty organic meal specially designed by a food blogger.

“Traditionally the two main challenges for customers buying organic, is the price and the availability. Over the last decade we have seen this improve across the industry and now the organic market is in a clear growth phase in the UK, says Adrian Blackshaw, chair of the Organic Trade Board.

“But there is much more we can do – there’s a huge opportunity for Tesco to attract new organic consumers and in doing so, add value to their business.”

Naturex agrees that consumers are willing to pay more, and the trend is likely to increase in markets around the world, including the likes of China.

Sales of Naturex’s organic ingredients in the US have more than doubled in the past two years, thanks to the boom in America’s organic food and beverage market – the value of which grew 11.6% to US$36.9 billion in sales in 2015. The natural ingredients company has been expanding its organic product offer in response to this trend, and now offers a total of 50 organic ingredients – a third more than two years ago.

“Consumers are ready to pay more for organic as they believe organic ingredients are cleaner and less processed, hence healthier and more nutritious,” Olagne tells FoodIngredientsFirst.

“The organic trend can be seen mostly in Europe and North America. As there are equivalences between different certifications around the world, we will offer organic ingredients on a global basis.”

“We expect growth in the US first, but China may soon follow as consumers become increasingly sensitive about obtaining clean and natural ingredients.”

Organics & Sustainability 

According to a new UBC study published recently in Science Advances, it may not always be the case that organics is better for sustainability; people and the planet - the thinking many have when choosing an organic product or ingredient.

“Organic is often proposed a holy grail solution to current environmental and food scarcity problems, but we found that the costs and benefits will vary heavily depending on the context,” said Verena Seufert, a researcher at the Institute for Resources, Environment and Sustainability (IRES).

In their study, Seufert and her co-author Navin Ramankutty, Canada Research chair in Global Environmental Change and Food Security at UBC, analyzed organic crop farming across 17 criteria such as yield, impact on climate change, farmer livelihood and consumer health.

It is the first study to systematically review the scientific literature on the environmental and socioeconomic performance of organic farming, not only assessing wher previous studies agree and disagree, but also identifying the conditions leading to good or bad performance of organic agriculture.

Take two factors that are top of mind for many consumers: synthetic pesticide use and nutritional benefits of organic. Seufert and Ramankutty argue that in countries like Canada wher pesticide regulations are stringent and diets are rich in micronutrients, the health benefits of choosing organic may be marginal.

“But in a developing country wher pesticide use is not carefully regulated and people are micronutrient deficient, we think that the benefits for consumer and farm worker health may be much higher,” said Ramankutty, professor at IRES and the Liu Institute for Global Issues at UBC.

Another important measure of the sustainability of farming systems is the yield of a crop. To date, most studies have compared the costs and benefits of organic and conventional farms of the same size, which does not account for differences in yield.

Previous research has shown that on average, the yield of an organic crop is 19 to 25 per cent lower than under conventional management, and Seufert and Ramankutty find that many of the environmental benefits of organic agriculture diminish once lower yields are accounted for.

“While an organic farm may be better for things like biodiversity, farmers will need more land to grow the same amount of food,” said Seufert. “And land conversion for agriculture is the leading contributor to habitat loss and climate change.”

While their findings suggest that organic alone cannot create a sustainable food future, they conclude that it still has an important role to play. Organic is one way that consumers have control over and knowledge of how their food is produced since it is the only farming system regulated in law.

“We need to stop thinking of organic and conventional agriculture as two ends of the spectrum. Instead, consumers should demand better practices for both so that we can achieve the worlds food needs in a sustainable way,” said Seufert.