Consumer research shows that there is a rising preference for organic food over conventional food, both in the Irish (Red C Research, 2017) and Global market (TechSci Research, 2017). The Irish organic food and drink market has shown substantial growth in recent years, with Kantar Worldpanel (2017) indicating an upward curve in sales from 2014 to 2017, and valuing the Irish organic market at over €200 million.
A 2017 Bord Bia commissioned study by RED C Research found that over 91% of Irish consumers believe that organic products are generally better than non-organics – with poultry, meat, eggs, seafood, vegetables and fruit especially preferred. The study underlined that high quality (38%) is the biggest driver for purchasing organic food, while the fact that the product is labelled as organic (34%) is also a significant reason to buy. Health benefits (29%), better taste (26%) and Irish origin (25%) also scored highly in the consumer research.
(Information Source: The Thinking House Bord Bia, November 2017. Organic Food & Drink Market Review)
RED C research found that the biggest barrier for buying organic in Ireland is the cost, with 48% of consumers highlighting price as a barrier. Lack of sales promotions (21%) and limited product ranges (19%) also scored high with Irish consumers as barriers to purchase. Potential solutions to overcome this barrier to purchase included increasing in-store visibility of organic produce, improving labelling, increasing availability and educating consumers, especially in young age groups.
70% of organic purchases are made through the supermarket/discounter category (RED C, 2017) and account for just under €145 million of organic spend (Kantar Organics Report, 2017). Kantar Worldpanel have shown that Tesco, Dunnes Stores and SuperValu have all lost share in the organic market since 2015, with discounters Aldi and Lidl seeing strong growth. The top 3 performing organic categories have been vegetables (22% of total organic market), yoghurt (17%) and fruit (12%) respectively.
(Source: The Thinking House Bord Bia, November 2017. Organic Food & Drink Market Review)
The Global organic food market is projected to grow at a compound annual growth rate of 16.15% in value between 2017 and 2022 (TechSci Research, 2017). This forecast expects to see the market jump in value from $124 billion (€106 billion) in 2016 to $262 billion (€224 billion) in 2022.
TechSci Research claim that this growth is due to the growing health consciousness of consumers, increasing incidence of disease and the rising preference for organic food over non-organic food. They also see a rising demand for organic prepared food, which is due to increasing numbers of working professionals, especially females and young people, who are looking for ready-to-eat and ready-to-cook products.
(Source: TechSci Research, August 2017. 2012-2022 Global Organic Food Market)
The US organic market grew by 8.4% in 2016 with sales of over $47 billion (Organic Trade Association, 2017). Organic is said to be going mainstream in the US with 75% of all product categories in US supermarkets containing organic options (Natural Products Consulting, 2017). Fruit and vegetables (40% of sales value) dominate the US organic market, with dairy (15%), prepared foods (12%) and beverages (11%) performing relatively strongly also. Married millennial parents, aged 18-34 and with children aged 5-10 years old, are the most likely demographic to buy organic and are the number 1 consumer target for organic food and drink in the US market.
Between 2016 and 2022 the European market expects to see a rise in the market share of organic meat, poultry & dairy (+1%) as well as organic bread & baked goods (+1%) and also organic prepared food (+ 0.15%) (TechSci Research, 2017. 2012-2022 Global Organic Food Market). Core markets such as France and Germany are showing significant growth. In France, organic food sales reached €7 billion, an increase of 20% from 2016, which is continuing a double-digit growth trend over several years (Bord Bia, 2017). The German organic market is also expected to increase in value, with preference going towards meat, poultry, dairy, fruit, vegetable and prepared foods. Grocery retail is the biggest seller of organic produce in Germany, with a 58% market share in 2016 (TechSci Research, 2017).
For further information on the organic sector and Bord Bia marketing supports for organic producers, please contact Gillian.Willis@bordbia.ie.