MARKET TRENDS

Global growth in natural and organic food and beverages continues unabated in the third year of the pandemic as consumers seek health and nutrition strategies and ingredients to support optimal health, as well a heightened awareness of the need for sustainable practices for the planet.

With estimated organic sales of $201.77 billion in 2020 growing to $221.37 billion in 2021 at a compound annual growth rate (CAGR) of 9.7%, (Ref 1) ‘conscious consumerism’ (Ref 2) has contributed (Ref 3) to meteoric growth in the natural and organic categories with increasing consumer concerns about the impact of pesticides, preservatives, additives and the impact on the environment, driving switch to organic food and beverages globally.

This trend of self-care which includes amongst others ‘beauty from within’ (Ref 4) and mental wellbeing support, has accelerated consumer health empowerment through online digital search, coupled with the shift to eating more meals at home during this time, resulting in sustained year-on-year growth in the natural and organic sectors, with overall sales exceeding $62 billion and fresh produce sales rising by 11% in 2020 to $18.2billion in the US, according to the Organic Trade Association (Ref 5).

In Australia, Google search trends (Ref 6) for local organic shopping increased by 600% in the prior 90 days up to February 2022. Research (Ref 7) shows that ‘consumers select organic for reasons of quality, to avoid chemicals and believe that by buying organic they are making better choices for their family and planet’, according to an Australian report. 

‘46% of Australian shoppers say they started buying organic for personal health reasons, exacerbated in light of COVID-19. Other reasons to buy were a concern for the environment (46%) and animal welfare impacts (27%). Shoppers also chose organic due to the natural attributes of the organic production process and the better taste and quality’ (Ref 8).

It is clear that consumers are increasingly seeking cleaner, healthier options for foods which support optimal wellbeing and a healthier planet with growth in natural, organic and free from seeing substantial growth (Ref 9).

There remains however a lack of clarity of what is truly ‘organic’ says Niki Ford, CEO of Australian Organic, the peak industry body which is calling for the introduction of a consistent mandatory standard for the use of the word ‘organic’ which will help alleviate consumer concerns, building trust and driving further switch to healthier consumption.

This, she says, is key, given Australia’s organic industry is estimated to contribute over $800 million of GDP in 2020 - rising further by 7.9 percent during the pandemic.

Supporting this growth, large-chain supermarkets in Australia have opened opportunity for organic brands, contributing to the widespread visibility of organic product, further driving growth (Ref 10).

GILLIAN FISH
The 6AM Agency & Igloo | Australia

FASCICOLO SPONSORIZZATO DA

Prior Chair of Australian Organic, and investor in multiple organic businesses, Dr Andrew Monk, said that increased demand for organic foods has prompted some supermarkets to support organic growth funds for conventional and organic fruit and vegetable growers to either start or accelerate their organic farming capability, a rigorous process which takes three years to acquire Australian Certified Organic Certification. Growth of organic sales continues across a range of retail formats from online to independent and multi-chain Supermarkets in Australia.

The switching to organic viticulture and winemaking has been assisted by advancements in farming technology, according to global certified organic wine producer, Angove Organic. The direct result of this change is healthier soils and healthier vines that are more resilient to pests and diseases and produce better grapes making wines that taste great and consumers love.

“Because organic farming focuses on free-from synthetics, modern technology like drones and aerial imaging are used to enable sophisticated analysis of what the soils require, plants need vs simply adding fertiliser as is customary in non-organic farming,” says Angove Organic’s Joint Managing Director, Victoria Angove, global leaders in organic wine production.

“By embracing technology, inputs are better placed and applied, there is less use of diesel tractor inputs, the soil is rich and healthy and there is a reduction in water usage”, says Angove, stating all these things allow Angove Organic to produce a purer product, healthier for humans and truly certified organic.

1. Empowered wellbeing

Health is at the front of the agenda across all facets of life including business and personal; consumers have been actively upskilling on how to build immunity, be healthier and thus are far more knowledgeable about wellbeing. Food as Medicine as a health strategy is at an all-time high putting natural and organic firmly on the health agenda, driving growth.

2. Mental wellbeing matters for everyone and everything

Millions are operating with always-on mild anxiety and a coping mindset, as the uncertainty and stresses – economic, relationships, work related - during the pandemic continues. Growth in natural and anti-inflammatory foods and therapies that support sleep, stress and anxiety reduction strategies Ref 11, 12) as well as immune health, have seen substantial growth with the likes of adaptogens such as ashwagandha, energy production and mitochondrial support, such as ubiquinol, at the forefront of this growth.

3. Value versus Purpose based purchasing

The pandemic has amplified consumers’ needs to align their purpose (Ref 13) with those of the brand, versus seeking value from the purchases they make. Those brands that are committed to doing good for the planet as much as for their bottom line, are seeing healthy growth in loyalty, even commanding higher prices.

4. Eating in is the new Dining out

Described as the ‘Homebody Economy’, Waitrose (UK) research reveals that consumers are increasingly eating in and refocusing on fundamentals, such as cooking simple meals together with loved ones, where cooking and eating together has become the new form of ‘entertainment’ (Ref 14)with a focus on convenience and healthy eating.

5. Plant more

UK customers at supermarket Waitrose (Ref 15) reveal a shift to vegetables only for five days per week with vegetarianism and veganism dominating our plates, as the emphasis shifts to healthy eating and sustainable practices which are kind to the planet.

6. Planet ahead of profit

Reduction of carbon footprint is in focus as consumers seek brands that align with their own values, demanding a focus on sustainability (Ref 16) with consumers seeking clear evidence of proactive commitment to manufacturing practice which is dedicated to slowing climate change. Research reports show that 57% (Ref 17) of consumers are willing to change their purchasing habits to help reduce negative environmental impact. Natural and organic farming free-from pesticides, additives and a focus on water preservation and reduction in CO2 emissions is increasingly driving consumption change and growth.

7. Clean Labelling

The pandemic has sharpened consumers’ focus on understanding the long-term effects of the food products they consume (Ref 18) seeking ‘health value’ in food choices, with ingredient labels playing a key role in substantiating purchase decisions (Ref 19). This has resulted in growth in the natural and organic food and beverage categories.

8. Recuperative living (Ref 20)

To cope with the challenges brought on by the pandemic consumers have pared back to the essentials in life – with healthy rituals that support peace of mind: tea rituals; healthy cooking, meditation, regular exercise, supported by largely natural or organic food choices.

9. Keeping it local

Globally, supply chain pressures have resulted in more purchasing from local communities. Living local is now the central focus of our world. Even the largest supermarket chains, have launched smaller ‘Local’ stores to work with local suppliers to bring the best local goods to customers, from the local butcher for example.