The market rapidly strengthens its presence as organic foods such as dairy products, confectionery, snacks, bakery, non-dairy beverages, meat, baby foods and multi-ingredient processed foods gain immense popularity and register booming sales.
"Increased occurrence of diseases combined with a general perception of a healthier lifestyle to include organic products can reduce the development of diabetes, particularly in obese people," notes Frost & Sullivan Research Associate Sneha Pasricha. "This has further boosted the sales of organic products."
Analysis from Frost & Sullivan (food.frost.com), Road Map of U.S. Organic Food Markets - An Industry Outlook identifies that several multinationals are vying for strong positioning in the U.S. organic foods market by either offering new organic food products or by strategically acquiring or partnering with flourishing major organic brands.
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Unlike conventional agriculture, organic farming employs healthy agricultural practices. It uses natural fertilizers, such as manure or compost to feed soil and plants instead of chemical fertilizers. As an alternative to insecticides, organic farmers use beneficial insects and birds, mating disruption, or traps. Animals for organic dairy and meat are raised on organic feed and a balanced diet in a cleaner and healthier environment.
As demand for organics increase, manufacturers are forced to look overseas for raw materials. Increasing volumes of organic fruit, vegetables, grain, seeds, beans and herbs are being procured from other places. This not only increases the final price of the end product, but also raises issues such as food miles.
The constraints in the supply of organic ingredients are a matter of grave concern for the organic food manufacturers, as this can undermine the long-term stability and growth of this otherwise booming market.
In order to provide consumers with the best quality of organic products, active food processors in the organic foods market must integrate backward to minimize supply and quality challenges. It is important to make strategic alliances with organic ingredient suppliers of organic flavors, colors, sweeteners, fibers, dairy cultures and others.
Additionally, both the food processors and the ingredient companies can establish long-term alliances with the farmers involved in organic farming to ensure regular supply. Well-heeled food processors can also set up their own organic farm fields to address quality issues related to the ingredients.
"These moves to ensure stability in the supply of organic produce and ingredients can also help meet the rising demand for organic food commodities," cites Pasricha. "Moreover, these steps could allow the stringent monitoring of farming, handling and transportation procedures, resulting in better quality of organic produce."
If manufacturers make an effort to develop a wide range of organic products across sundry product segments, it will help develop the market as well. Product segments such as organic snacks, bakery, confectionery and multi-ingredient processed foods have great growth opportunity, which can be achieved by effective product differentiation and innovation.
Industry Outlook: Road Map of U.S. Organic Foods Market is part of the Food and Beverages Ingredients Growth Partnership Service program, which also includes research in the following markets: U.S. Essential Oil and Oleoresin Markets, Strategic Analysis of the U.S. Polyols Markets, to name a few. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.
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Road Map of U.S. Organic Food Markets - An Industry Outlook - N105