The global organic food market reached a value of nearly $205,361.7 million in 2020, having increased at a compound annual growth rate (CAGR) of 21.1% since 2015. The market is expected to grow from $205,361.7 million in 2020 to $389,023.6 million in 2025 at a rate of 13.6%. The market is then expected to grow at a CAGR of 9.6% from 2025 and reach $615,158.5 million in 2030.
Growth in the historic period in the organic food market resulted from the rising awareness of the benefits of organic food, increase in cases of food poisoning, strong economic growth in emerging markets, rise in disposable income and influence of digital media marketing and social media. The market was restrained by high costs of organic food, low shelf life, shortage of skilled workforce, legal actions against misinformation and false advertising, reduction in free trade, and geo-political tensions. Going forward the COVID-19 pandemic increased demand for organic food, organic specialists opening in developed economies, growing health-conscious consumers, rising population, demographic shift in emerging markets, rising penetration of organized retail, and continued technology development will drive the growth in the organic food market. Factors that could hinder the growth of the market in the future include barriers to entry, heavy competition, and stringent regulations.
The organic food market is fairly fragmented, with large number of players in the market. The key players in the market are focusing on business presence in the market through development of innovative, efficient, reliable technologies to meet the customer demand. The top 10 companies in the market occupied 2.18% of market share in the global organic food market. Major players in the market include Organic Valley, The Kroger Co., General Mills Inc., The Hain Celestial Group Inc., United Natural Foods, Amy’s Kitchen Inc., Dole Food company, Riverford, Conagra Brands Inc., and Eden Foods.
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The organic food market is segmented by product type into meat, organic poultry & dairy, vegetables and fruits, bread and bakery, beverages, processed food, and other products. The fruit & vegetable market was the largest segment of the organic food market segmented by product type, accounting for 22.9% of the total in 2020. Going forward, the beverages segment is expected to be the fastest growing segment in the organic food market segmented by product type, at a CAGR of 18.3% during 2020-2025.
The organic food market is also segmented by application into conventional retailers, natural sales channels, and online. The conventional retailer market was the largest segment of the organic food market segmented by application, accounting for 68.0% of the total in 2020. Going forward, the online segment is expected to be the fastest growing segment in the organic food market segmented by application, at a CAGR of 14.2% during 2020-2025.
The conventional retailer market is further segmented by type into supermarkets/hypermarkets, convenience stores, food & beverage stores, and others. The supermarkets/hypermarkets market was the largest segment of the conventional retailer market segmented by type, accounting for 44.9% of the total in 2020. Going forward, the convenience stores segment is expected to be the fastest growing segment in the conventional retailer market segmented by type, at a CAGR of 16.6% during 2020-2025.
Western Europe was the largest region in the global organic food market, accounting for 37.0% of the total in 2020. It was followed by the North America, Asia Pacific and then the other regions. Going forward, the fastest-growing regions in the organic food market will be Middle East, and South America where growth will be at CAGRs of 16.5% and 16.3% respectively. These will be followed by Asia Pacific, and Africa, where the markets are expected to register CAGRs of 15.3% and 15.2% respectively.
The coronavirus pandemic caused a global economic slowdown and impacted various industries across the world, including the organic food market. Nationwide lockdowns and restrictions on activity to contain COVID-19 are disrupting supply chains and affecting manufacturing worldwide.
The top opportunities in the organic food market segmented by product type will arise in the bread & bakery segment, which will gain $38,939.8 million of global annual sales by 2025. The top opportunities in the organic food market segmented by application will arise in the conventional retailers segment, which will gain $126,967.2 million of global annual sales by 2025. The top opportunities in the conventional retailer market segmented by type will arise in the supermarkets/hypermarkets segment, which will gain $54,268.6 million of global annual sales by 2025. The organic food market size will gain the most in USA at $34,231.5 million.
Market-trend-based strategies for the organic food market include better labelling and packing, new product launches, use of artificial intelligence (AI), zero calorie organic soft drinks, strategic mergers and acquisitions. Player-adopted strategies in the organic food market include new product development activities, product launches, strategic collaboration and partnerships to improve technologies used, investing in existing products to improve efficiency, and acquisition of emerging and established companies.
To take advantage of these opportunities, The AMR recommends the organic food companies to focus on zero calorie organic soft drinks, labelling & packaging, expand in developed countries, scale up through merger and acquisition activity, leverage e-commerce services, offer competitive pricing, offer value-based pricing, participate in trade shows and events, and increase visibility through a high performance website.
