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Organic Monitor Gives 2009 Predictions
With the slowdown in
the global economy, there is some uncertainty about the year ahead for
ethical & sustainable industries. At the end of the first month of 2009,
Organic Monitor gives its predictions on its specialist industries for
the year ahead...
1. Organic
Foods
Global sales of organic food & drink have been increasing by over US
$5 billion a year, reaching US $46 billion in 2007. Positive growth is
expected to continue in 2009, however slower growth rates are envisaged
in countries affected by the financial crisis.
The UK market
has been the most adversely affected because of the harsh economic
climate reducing consumer expenditure. Other countries have been less
affected with double-digit growth still continuing in northern European
countries. Although consumer demand for organic foods remains high,
increased price sensitivity is leading consumers to ‘trade downwards’.
Thus, organic food sales from discounters and other low-cost retailers
are increasing at the expense of other retailers. Retailer private
labels are also becoming more popular than manufacturer brands.
2. Natural Cosmetics
Global sales of natural and organic
cosmetics are increasing by over US $1 billion a year. As for organic
foods, most demand is concentrated in
Europe and North
America. Preliminary research shows that European sales exceeded US $2
billion for the first time in 2008.
Healthy market
growth rates are continuing in 2009, with most growth observed in
mainstream retailers like supermarkets, drugstores and pharmacies.
Retailer private labels are a major driver of market growth; a growing
number of retailers are launching certified natural & organic cosmetics
under their private labels, offering consumer low-price quality
products. However, some rationalisation is expected in 2009 due to a
large number of brands competing with private labels for retail
shelf-space.
3.
Fairtrade Products
Consumer demand for fairtrade products
continues to strengthen in spite of the economic slowdown. Preliminary
research indicates that global fairtrade product sales exceeded US $3.5
billion in 2008.
Growing
interest in social & trade issues involving developing countries is
driving market growth. Retailer investment is stimulating production of
fairtrade products; a number of European supermarkets have converted
their entire supply chains of certain products to fairtrade. The fresh
produce category is tipped to show the highest growth in 2009.
4. Natural
& Organic Ingredients
Slowing demand from food processors, beverage
companies and other end-users is bringing supply in balance with demand.
After experiencing several years of undersupply, ingredient prices are
expected to decline in 2009. Increased globalisation of supply chains is
predicted to continue as large ingredient companies spread their
production bases.
5. Soya &
Functional Foods
Dairy alternatives are continuing to gain
popularity across the globe. The success of soya milk is leading to high
investment in related products, marketed as dairy alternatives and / or
functional products. Oat-based dairy alternatives are expected to
continue to gain ground in 2009. A major advantage soya and oat-based
products have is that they can be marketed on health claims.
Many new
functional foods are expected to be launched in 2009, however few are
likely to have a long-term presence because of the high rate of product
failures in this market.
6. Ethical
Textiles
Rising ethical consumerism is fuelling demand
for organic and fairtrade textiles. New product launches are expected to
continue in 2009 as investment comes in from new producers and
retailers.
Organic
Monitor also expects sustainability to become increasingly prominent in
2009. Natural & organic product companies are at the forefront of
adopting sustainable and ethical business practices. This development is
leading to some convergence between product sectors. Indeed, many new
organic product launches contain fairtrade ingredients. The number of
carbon neutral companies is also expected to increase in 2009.
2009 Events
Sustainable Cosmetics Summit (Frankfurt, Nov
'09)
Sustainable Foods Summit (Amsterdam, June '09)
Upcoming Reports
#1002-60 The
European Market for Natural Cosmetics
(2nd Edition)
#7003-40 The
Global Market for Organic
Food & Drink (3rd Edition)
#7001-90 The
Global Market for Fair Trade Products
Posted: January 30th 2009
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