The global Organic Food market was valued at USD 163.1 Billion in 2022 and is projected to reach USD 219.3 Billion by 2030, registering a CAGR of 6.1 % for the forecast period 2023-2030.
Market Definition
Organic food refers to produce and other agricultural products that are grown or processed without synthetic pesticides, fertilizers, genetically modified organisms (GMOs), antibiotics, growth hormones, or irradiation. These items are cultivated using organic farming methods, which prioritize sustainable practices and environmental conservation. Organic food is cultivated without chemical fertilizers, hormones, pesticides, or antibiotics, supporting ecological balance and preserving biodiversity. It avoids processing with irradiation, industrial solvents, synthetic additives, or chemical preservatives. With the growing number of chronic diseases such as cardiac issues, cancer, diabetes, and the rise in healthcare costs, consumers are increasingly focusing on their diet. The growing recognition of the benefits of organic food is anticipated to propel market expansion in the forecasted period.
Market Size:
- 2022: USD 163.1 Billion
- 2030: USD 219.3 Billion
- CAGR (2023-2030): 6.1%
Organic Food Market Dynamics
Drivers: Growing consumers' healthy consciousness and adopting organic farming are driving the market growth
The market is experiencing growth driven by an increasing consumer focus on health and the adoption of organic farming practices. The global inclination toward organic and chemical-free products is increasing. It is mainly due to the growing demand for healthier food, environmental awareness and consideration for the consequences of environmental deterioration. Consumption of organic food is highly associated with health consciousness and environmental awareness this research will provide a better understanding by considering a detailed analytical framework with variables like intention, and attitude and get a close understanding of organic food consumption patterns. According to the Food and Agriculture Organization, in 2021, organic agriculture was practiced in 187 countries, and nearly 72.3 million hectares of agricultural land, increased by nearly 1.1 million hectares from 2019, were managed organically. The emerging organic farming trend worldwide increases the product availability and makes it more affordable. Furthermore, according to the World of Organic Agriculture Statistics and Emerging Trends 2022 (WOASET 2022) published by the Swiss Research Institute of Organic Agriculture (FiBL) and IFOAM – Organics International, over 74.9 million hectares of organic agricultural land were recorded in 190 countries in 2020.
Recent Developments
In August 2022, Danone acquired organic food producer Happy Family. Happy Family produces a variety of organic products. The management of Danone revealed that the company has agreed to purchase 92% of the organic baby and baby food manufacturer Happy Family.
In July 2022, Grain Forests introduced new organic products to bring the rural farm closer to the city. Sprouted ragi for babies, Health Mix for diabetics, Moringa powder for daily nutrition, and Ragi Dosa for a nutritious breakfast are newly added products.
Restraint
Organic food items carry a higher price tag compared to their conventional counterparts primarily because of limited supply relative to demand. The increased labor and decreased crop yield contribute to higher production costs, which are nearly 50% greater than conventional food products. This pricing factor has restricted the market penetration, particularly in developing nations. Due to the absence of preservatives in the production, handling, and delivery of organic fruits and vegetables, these items tend to spoil more quickly compared to conventional produce. For example, perishables like turnip greens, mustard greens, and endive have a limited shelf life. Each year, several tons of unsold organic fruits and vegetables go to waste due to their short span of usability. This factor stands as a significant obstacle hampering industry growth. This will somehow restrain the growth of the global market.
Challenges
Organic farming practices are generally more vulnerable to weather changes and pest infestations due to the limited use of synthetic pesticides and fertilizers. These challenges can result in fluctuations in crop yields, quality, and potentially affect overall production. Weather events such as droughts, excessive rainfall, or temperature variations, as well as pest outbreaks, can adversely impact organic farming yields and productivity. Furthermore, local weather conditions and pest pressures in various regions have different effects on different crops and farming practices. As a result, this factor can be considered to pose a challenge to the future growth of this market.
Opportunities
The rise of e-commerce has significantly impacted the organic food and beverage market, facilitating direct-to-consumer sales and enhancing accessibility. Online platforms, subscription services, and meal kit delivery companies are broadening the array of organic products available, providing ease and reaching a wider audience. The organic baby food sector has notably expanded due to parental preferences for healthy, organic options for infants and young children. Brands specializing in organic baby food, such as Earth's Best, Plum Organics, Happy Family Organics, Gerber Organic, Sprout Organic Foods, Beech-Nut Organic, Ella's Kitchen, and Peter Rabbit Organics, are diversifying their product lines by offering a broader range of organic purees, snacks, and toddler meals.
Snapshot:
| Attributes | Details |
| Market Size in 2022 | USD 163.1 Billion |
| Market Forecast in 2030 | USD 219.3 Billion |
| Compound Annual Growth Rate (CAGR) | 6.1 % |
| Unit | Revenue (USD Million) and Volume (Kilo Tons) |
| Segmentation | By Category, Product Type, Distribution Channel, and Region |
| By Type |
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| By Technology |
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| By End-Use |
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| By Region |
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| Base Year | 2022 |
| Historical Year | 2018 - 2022 |
| Forecast Year | 2023 - 2030 |
Segment Analysis of the Organic Food Market
The Organic Food market is segmented into By Category, By Product Type, By Distribution Channel, and region.
By Product Type
On the basis of product type, the market is divided into processed and unprocessed. The unprocessed segment has gained the largest market share worldwide. Over the past two decades, the product's appeal has swiftly evolved due to its fresh appearance and the convenience it offers. The quality factor of unprocessed foods is a crucial element in gaining global consumer acceptance. Additionally, unprocessed or minimally processed foods, such as organic meats, fruits, vegetables, dairy products, cereals, and grains, are more nutrient-richer compared to processed foods. Due to their nutrient density and appealing taste, consumers show a preference for unprocessed foods.
By Distribution Channel
By distribution channel, the market is segmented into supermarkets/hypermarkets, specialty stores, convenience stores, online retail stores, and others. Supermarkets/hypermarkets segment holds the largest market share, as it offers a range of brands and product varieties in a single place. The convenience in product selection is the prominent aspect of increasing the foot count in such stores. Furthermore, supermarket chains are expanding their presence in tier 2 and 3 cities to reach a large consumer base, which is another major factor positively supporting the segment growth.
Regional Analysis
North America accounted for the largest share in the organic food market:
In 2022, North America held the market with 41.89% of the market share, as consumers in the region prioritize health, sustainability, and ethical considerations when making food choices. North America, especially the United States and Canada, has a high level of consumer awareness and demand for organic food. The region's consumers are more health-conscious and environmentally aware, driving a significant market for organic products. The infrastructure for organic farming and distribution is well-developed in North America. The region has a robust network of organic farms, processing facilities, and an established supply chain to meet the demands of consumers. According to the Organic Trade Association (OTA), the organic baby food category's dollar sales growth in the U.S. increased by 11%, followed by the beverages segment with 8% in 2021.
Asia Pacific region is expected to grow at the highest CAGR of 17.7% during the forecast period. This is due to increase in consumer awareness regarding organic goods, expanded availability of such products in retail stores, and the increasing disposable income of individuals. Additionally, the augmented investment by international entities in the regional market is expected to bolster market expansion. For instance, in May 2019, Nestle S.A., a multinational food corporation, introduced organic food items under the brand Ceregrow. This children's cereal, derived from organic ragi, wheat, milk, and rice, represents the company's inaugural organic product in the Indian market.
Segmentation Analysis of the Organic Food Market
By Category
- Fruits & Vegetables
- Dairy
- Meat, Fish, & Poultry
- Frozen & Processed Foods
- Cereals &Grains
- Beverages
- Others
- Processed
- Unprocessed
- Supermarkets/Hypermarkets
- Specialty Store
- Convenient Stores
- Online Retail Stores
- Others
- Amy's Kitchen Inc.
- Clif Bar & Company
- Danone S.A.
- Dole Food Company Inc.
- General Mills Inc.
- Newman's Own
- Organic Valley
- Sprouts Farmers Market Inc.
- The Hain Celestial Group Inc.
- The Kroger Company
- United Natural Foods Inc
