Growth of Global Organic Food and Beverages Market to be Dictated by High Demand for Organic Fruits and Vegetables, says TMR

The competitive landscape of the global organic food and beverages market is marked by a high level of fragmentation, says Transparency Market Research in a new report. In 2012, the four top players held close to a mere 10% of the overall market, while small and mid-sized companies held over three-fourth of the market. Some key players are Hain Celestial Group Inc., Amy’s Kitchen Inc., and Organic Valley.

“New product development is one of the primary growth models that top players in this market are focused on,” points out TMR analyst. An excellent example is the Hain Celestial Group Inc. In 2011, the company spent almost US$4 mn in research and development to add newer products and ingredients to its portfolio, which in turn helps to increase the customer base.

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Global expansion by means of partnerships and business alliances is another key growth strategy that top players in this market are focused on. These alliances are meant for an increased product portfolio and an increased market share.

Focus on tapping the vegetarian market is also the growth strategy of key vendors in this market. As the number of vegetarians is increasing dramatically across the world, top players are focused on delivering organic food and beverages for this customer base.

Government Regulations to Monitor Safety of Food Ingredients Key Factor Propelling Market Growth

“Change in consumer perception towards organic food is the major factor driving the global organic food and beverages market, “says TMR analyst. An increasing preference for organic food over conventional food due to the notion that organic food offers higher health benefits is driving the growth of this market to a high degree. This is because consumers are recognizing that consuming conventional food, which is cultivated with synthetic ingredients and pesticides, is associated with diseases in the long run. This has resulted in an increased preference for organic food and beverages which are free of chemicals and are less harsh on the environment.

Government regulations that strictly monitor and control additives and ingredients in food are also fuelling the growth of this market. This involves rigorous testing to determine if the food is safe for the intended use. An expansion of the distribution channels for organic food and beverages is considerably benefitting the growth of this market.

Short shelf life of organic food and beverages is a major factor challenging the growth of the organic food and beverages market. While synthetic products are loaded with large amounts of preservatives for a longer shelf life and to preserve the product attributes, organic food and beverages are free of synthetic preservatives. Manufacturers of organic food and beverages find it difficult to source organic ingredients that can be used to increase the shelf life of organic food and beverages.

The high-cost factor of organic food and beverages as compared to conventional food is also challenging the market’s growth. The prices of organic food and beverages are 10 to 20 times higher than that of conventional foods, which limits their affordability to a select class of customers.

Asia Pacific to Emerge as Key Market for Organic Food and Beverages

The global organic food and beverages market is expected to reach a valuation of US$187.8 bn by 2019. The organic fruits and vegetables product segment held 38.9% of the organic food market in 2012, whereas organic coffee and tea and non-dairy beverages product segments collectively held 75% of the organic beverages market in the same year.

North America and Europe are traditionally leading markets for organic food and beverages; however, Asia Pacific is expected to display a significant growth rate in this market in the coming years.

The information presented in this review is based on a Transparency Market Research report, titled “Organic Food & Beverages Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2013 - 2019.”

The market is segmented as:

Organic Food Market: Product Analysis

• Organic Fruits & Vegetables
• Organic Meat, Fish & Poultry Products
• Organic Dairy Products
• Organic Frozen & Processed Food
• Others

Organic Beverages Market: Product Analysis

• Organic Non - dairy Beverages
• Organic Coffee & Tea
• Organic Beer & Wine
• Others