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.
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.
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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.
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