The US is not the biggest in organic cultivation but the largest market for organic food and products. Its demand has been put at 24.3 billion Euros. Approximately 43% of the world’s revenues from organic food come from the US alone. Other major contributors are Germany 13%, France 8%, China, Canada, the UK, and Italy, constituting 4%. The European organic food market was estimated in 2013 at US $31 million (FiBL-IFOAM 2015).
Organic food market size constitutes 5% of the total food market.
Some estimate a CAGR growth of 12% for North America. US farmers rely on genetically modified crops like corn and soybeans. The total imports into the US in 2014 stood at $1.28 billion.
Organic coffee led the pack with implications of $332.5 million. US organic exports in the same year stood at $553 million. On the other hand, Europe is both a producer and consumer of organic food.
Three major factors are impacting the organic food business. These have a direct bearing on organic cultivation.
Firstly, consumers must be convinced that their product is authentic. Certification, therefore, is a business imperative. The cost of certification is not just high but is time-consuming. It takes around three years for a farm to get certified as organic.
Second, there are fairly strong barriers to importing organic food in the US and Europe’s major organic food products consuming markets.
Thirdly, while it may appear that the developing parts of the world with access to cheaper labor should produce organic food cheaply, that is not the case. The organic food business is not just about creating an organic food crop, but the crop also has to be packaged and transported. Logistics costs in most developing economies are just too high, making the final product uncompetitive in the market.
Unfortunately, most people in the organic food business, including organic cultivation, do not realize that this is as much a business as any other and requires business strategy and logistics planning, and management as much as any other business.
With the right business tools, you will succeed in this business, and not just on sentiment and hype.
Additional reading:
Nutrition Facts – a guide to good health