Organic Food And Beverage Market Expected To Nearly Triple By 2019

By Sam Lewis

Organic fruits, vegetables, beer, and wine are forecast to dominate the market over the next six years

In 2012, the Organic Food and Beverage market was worth $70.7 billion dollars. According to a new Transparency Market Research report, by 2019 the market will reach $187.8 billion in value, marking a compounded annual growth rate (CAGR) of 15.5 percent.

Worldwide, organic farming — producing foods using animal and environmentally friendly methods — is practiced in 162 countries. The organic market is divided into food and beverage segments. Organic foods are further divided into fruits and vegetables, organic meat, fish, and poultry products, organic dairy products (milk, yogurt, cheese, butter, and ice cream), organic frozen and processed food, and others (tofu, condiments, seasonings, and sweeteners). Organic beverages are divided into non-dairy beverages, coffee and tea, beer and wine, and others.

Organic food dominated the global organic market in 2012, accounting for nearly 81 percent of total demand. Leading this segment were organic fruit and vegetables, creating 39% percent of the market. This dominance is expected to be sustained through 2018. Organic dairy products are being forecast to have a CAGR of 14 percent from 2013 to 2019. This is brought on by advancements in technologies which will provide organic dairy items an extended shelf life. Organic meats, fish, and poultry hold a small portion of the current organic market. Due to innovative products and development in the industry, this segment of organic foods is projected to grow the fastest over the next six years, holding a CAGR of nearly 15 percent.

The organic beverage market is also experiencing growth due to consumer awareness of health benefits associated with organic products. The market will continue to rise over the next six years, led by the organic beer and wine market. This segment is projected to experience nearly 25 percent CAGR through 2018. Currently, organic tea, coffee, and non-dairy beverages are dominating the worldwide market, creating nearly 40 percent of the market revenue in 2012.

Recently, consumer health awareness has led to significant growth of the organic food and beverage market. Also contributing to worldwide growth of the market are broader channels of distribution combined with elevated government intervention and regulation of organic goods. Despite the boom, there are factors that stymy the growth of the market. Short shelf lives of organic goods, along with high prices of raw materials are the main hindrances to growth in the organic market. Increased efforts in research and development are aimed at lessening these barriers, giving the market bigger opportunities for expansion.