Organic Food and Beverages Market: Overview
The market for Organic Food and Beverages was worth USD 183.5 billion in 2021, and it is expected to increase at a 14.2 percent CAGR over the forecast period. Because of the increased emphasis on health issues, consumers are gravitating toward organic food and beverages. Organic food and beverage firms are launching a diverse range of organic products. Organic bamboo tea, soy sauce, and biological milk are just a few organic foods and beverages that have gained popularity among customers in a short period. Organic foods and beverages are agricultural goods developed or prepared following organic farming practices. Organic farming promotes resource recycling, ecological balance, and biodiversity conservation practices. Organic foods and beverages are produced without synthetic fertilizers, growth regulators, or other additives. Growing awareness of the health benefits connected with the consumption of organic products is one of the key factors driving market expansion.
Organic food and beverage sales are expected to increase due to changes in consumer purchasing habits. Furthermore, the growing customer preference for non-GMO products propels the industry forward. Beginning in 2020, consumers adjusted their food shopping and consumption patterns during the COVID-19 period, when eateries were closed, and home cooking became the norm. According to the United States Department of Agriculture, German customers purchased 22% more organic items in the same year.
The desire for enhanced general health among consumers and awareness of the detrimental consequences of synthetic substances has increased demand for organic products in recent years. Because of synthetic chemicals like pesticides and antibiotics in animals and plants, conventional meals pose several health hazards. Growing demand has resulted in a rise in the manufacturing of organic items. According to USDA predictions, organic agricultural management will cover around 39 million acres (16 million hectares) by 2020. The shelf life of organic food and beverages is restricted, representing a substantial impediment to the market's growth. The high prices of the items will further limit the organic food and beverage market's potential for expansion. The recent coronavirus outbreak has damaged organic food and beverage demand and supply even further.
Organic Food and Beverages Market: COVID-19 Impact
The COVID-19 pandemic has considerably enhanced the worldwide organic food and beverage market's growth. According to the Organic Trade Association, sales of non-food and organic food items in the United States will reach an all-time high. Organic sales in the United States were estimated to be $61.9 billion in 2020. Organic food sales increased by 13% and are expected to reach $56.5 billion by 2020. Consumer purchasing patterns have altered due to uncertainty, as people have grown more aware of the significance of a strong immune system, resulting in a desire for organic and natural foods.
Furthermore, in the aftermath of the 2020 epidemic, there has been a paradigm shift in the organic food market, with customers beginning to purchase more organic commodities as a preventative health strategy. This mental shift will propel the organic food market's future growth. Indeed, the organic food sector has grown globally, notably in food and vegetables. The surge in health-consciousness and consumers' attention to healthy food intake during the pandemic to strengthen their immunity and gut health boosted market demand for organic food and beverages. As customers became more conscious of the need for a robust immune system due to this uncertainty, their purchasing habits changed, and they preferred more organic and natural goods.
Organic Food and Beverages Market: Drivers
Increasing Public Knowledge of Advantages of Organic Foods and Beverages to Drive Market Growth
Growing consumer knowledge of the advantages of organic food and beverages leads to higher market share growth. The organic food and beverage business increases living standards by lowering health worries, boosting customer understanding of health-conscious customers, avoiding pesticides, chemical fertilizers, and synthetic chemicals, and avoiding genetically modified organisms. As a result, organic food and beverages significantly impact health, the environment, and animal welfare. It provides nutritional benefits over a typical diet. Government involvement in assisting consumers in distinguishing between legitimate and deceptively branded products has also contributed to overall market development. Governments worldwide have also adopted policies prohibiting chemicals, pesticides, growth hormones, and other synthetic compounds. Furthermore, the Indian government is encouraging organic growth by incentivizing growers of organic food products under the National Horticulture Mission (NHM). Farmers in India are being awarded Rs. 10,000/- per hectare for a maximum area of four hectares per beneficiary, as well as Rs. 5.00 lakh for organic farming certification for a group of farmers spanning an area of 50 hectares.
Clean Label Items to Drive Market Growth
Clean-label products are in high demand because customers want plant-based proteins, and vegetarian diets are perceived to be healthier. Clean-label products are entirely natural, non-GMO, and created from whole ingredients, with no additions or preservatives. A clean label product's key advantage is that consumers can read the ingredients and that it is organic and chemical-free. Companies should have appropriate packaging design, transparency in their food products, and simple components with functional benefits.
Organic Food and Beverages Market: Restraints
Organic Food and Beverages are Expensive and Have Short Shelf Life to Hamper Market Growth
Organic food production prices are frequently high because of higher labor inputs and a broader range of enterprises. This elevates the final retail price, likely the worldwide market's most significant constraint over the forecast period. Furthermore, because organic food has a short shelf life, market growth is projected to be limited throughout the projection period. Furthermore, high packaging, shipping, and distribution expenses limit organic food market expansion to extend shelf life.
Organic Food and Beverages Market: Segment Overview
Organic Foods and Vegetable Category is Leading Market due to Increased Consumer Awareness
The food and vegetable segment is expanding rapidly due to increased consumer awareness; customers prefer to consume only products associated with organic farming techniques. Organic foods are more popular among consumers than conventional foods. Organic fruit and vegetable pieces give nutrients that are good for your health. Organic foods assist in preventing chemical pollution and soil contamination. As people's lifestyles change, they become more concerned about their health. As a result, customers prefer organic food and beverages over other types of confectionery; for example, France has seen a substantial surge in organic food consumers consuming these items for the common reason of health benefits. This is because the market gives consumers health benefits. After all, they are free of preservatives and made with natural components.
With Increased Demand for Organic Food, Supermarket/Hypermarket Category Dominated Market
In the forecast period, the Hypermarkets/supermarkets segment held the largest market share. Hypermarkets/supermarkets, franchisee stores, specialty stores, and club stores are examples of brick-and-mortar stores in the offline segment. The ease afforded by this distribution channel and its capacity to supply popular brands has contributed to the segment's rise. The growing number of supermarket and hypermarket chains and the changing retail landscape drive higher organic food and beverages sales through this channel, particularly in developing nations.
Organic Food and Beverages Market: Regional Landscape
Asia Pacific to Dominate Market due to Growing Preference for Organic Food and Beverage
The Asia Pacific market has the majority of its revenue. This is because India and China are the primary producers of these products. Consumer awareness of the health benefits of the market and advancements in biological farming practices are expected to fuel organic food and beverage demand. According to the National Bureau of Statistics of China, per capita consumption of organic food and vegetables is projected to be 105.4 kg, while APEDA estimates fruit and vegetable output in India to be 99.07 million metric tonnes and 191.77 million metric tonnes, respectively. Because of increased consumer demand, these countries with the most people have a considerable inclination to create organic food and beverages, which is one of the key factors driving the market.This surge can be attributed to dietary changes and changes in farming practices meeting the growing demand for organic products as the disease's prevalence rises. Because the products are environmentally friendly, free of chemicals and residues, and healthier than conventional items, the industry in the Asia Pacific is expected to grow rapidly.
Rising consumer awareness of the benefits of eating non-genetically modified or changed food is predicted to boost the region's growth in the near future. Furthermore, the leading companies are focused on launching chemical-free food and beverages for individual health benefits, driving business growth during the projection period.
Global Organic Food and Beverages Market: Competitive Landscape
In February 2021, The Kraft Heinz Company announced the acquisition of Assan Foods by the Kraft Heinz Company from Kibar Holding, a privately held Turkish company. With this acquisition, the company wants to increase its international market reach while focusing on taste enhancement and gourmet service. Moreover, in June 2021, Danone bought Your Heart, a leading plant-based pioneer. The acquisition strategy could be corporate expansion by providing new organic items to meet consumer demand and maintain control over other companies in the same category.
Few of the players in the Organic Food and Beverages Market include WhiteWave Foods Co., Hain Celestial Group, Inc., Dean Foods Company, United Natural Foods, Inc., General Mills Inc., SpartanNash Company, Starbucks Corporation, Amy's Kitchen, Inc., The Kroger Co., Whole Foods Market Inc.
Regional Classification of the Global Organic Food and Beverages Market is Described Below:
Middle East and Africa
*Regions and countries are subject to change based on data availability
Key Elements Included In The Study: Global Organic Food and Beverages Market
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