Awareness and incomes driving spike in demand for world organic food


Latest findings from leading market consultancy firm Allied Market Research has found that demand for organic food and beverages will reach $327.6 billion by 2022 — an increase by a factor of three over the 2015 market.

According to the report, the projected boom in demand can be attributed to a number of factors including “increase in income levels, improvement in standards of living, growth in environmental concerns [and an] increase in health hazard diseases due to inorganic foods.”

Rising incomes in India and China were one of the key drivers behind the growth in demand in the Asia Pacific region.

“Geographically, the market is expected to register an appreciable growth in Asia-Pacific region and in most developing countries such as India and China, owing to the rise in disposable income demographic,” the study continued.

However the real driver behind the spike in demand for organics will be growing awareness of the problems of a highly processed, inorganic diet and increased education which shows the many benefits of an organic diet.

Australian organics mirrors global trend

In Australia the organic food and beverage industry is also experiencing rapid growth. The latest study from Australian Organic shows the organic industry is one of the nation’s fastest growing industries with annual growth of 15.4 percent in the five years to 2014.  

The export value of the Australian organic sector has increased from $126 million (9.87 percent of total organic industry value) in 2012 to $340 million (20 percent of total organic industry value) in 2014,” the report says.

This demand in Australia is seeing more farmers switch to organic produce. Market analyst company IBISWorld estimates the total value of the organic industry in Australia could rise to $1.2 billion by 2022.

Interestingly, IBISWorld’s senior analyst Nick Tarrant says that, with more farmers coming into the market as organic producers, the price may fall.

“The premium is about one-and-a-half to two times more for an organic product over an equivalent non-organic product,” Mr Tarrant said.

‘That is declining, mostly due to strong price competition as more farmers enter the market, but the margins are still significantly higher for organic farmers. When you increase the supply so much in one go the prices are going to fall, it’s not a huge fall, but it is falling marginally.”


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