Organic and sustainable foods get coronavirus boost

The surge in organic food demand brings supply issues

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Organic and sustainable food
Photo - Megan Thomas

The coronavirus pandemic is leading to a surge in demand for organic and sustainable foods. Retailers across the globe are experiencing hefty sales increases for organic products. Ecovia Intelligence (formerly known as Organic Monitor) expects the sales lift to continue in the coming years.

Online retailers are reporting the highest sales growth. Whole Foods Market, the world’s largest natural food retailer, has started limiting the number of its online grocery customers because of unprecedented demand. In the UK, Abel & Cole reported a 25% increase in sales orders, while Riverford is reporting a demand surge. Nourish Organic, an Indian online retailer, experienced a 30% sales rise last month.

Physical retailers are also benefiting from emergency measures introduced by various governments. Organic and health food shops have remained open in many countries; they are attracting new shoppers while existing customers are spending more. In France, some organic food shops are reporting sales increases of over 40%. COVID-19 is raising consumer awareness of the relationship between nutrition and health. Consumers are buying more organic and healthy foods as they look to boost their personal immunity.

The surge in demand is, however, bringing supply issues. The organic food industry is now global with international supply networks that are coming under pressure. Many of the raw materials used by European and North American organic food companies are produced in Asia, Latin America and Africa. Lockdowns are disrupting supply chains. For instance, India is a major source of organic tea, herbs, spices & related ingredients. Emergency measures introduced in March have halted food processing and exports.

Ecovia Intelligence expects demand for organic and sustainable foods to remain strong after consumer fears subside. Previous food and health scares caused an initial sales spike followed by sustained demand for organic products. For instance, the BSE crisis in 2000 escalated demand for organic meat products in Europe; sales remained buoyant in subsequent years. Similarly, SARS led to a spike in demand for organic foods in China (and Asia) in 2004. The melamine scandal in 2008 bolstered demand for organic baby food in China. Within a few years, the Chinese market for organic infant formula became the largest in the world.

Organic foods were first introduced on a large-scale in the early 1990s. It took over 15 years for global organic product sales to reach US $ 50 billion in 2008. Ten years (2018) later, they surpassed the US $ 100 billion mark. With COVID-19 changing the way we shop and eat, the next leap to US $ 150 billion could be within the next five years.

An update on the global organic and sustainable food market will be given at upcoming editions of the Sustainable Foods Summit that is Asia-Pacific edition from 7 to 8 September, Singapore; and European edition from 16 to 18 September, Amsterdam.

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