With the market for organic products under pressure in the current economic climate, companies should adopt "Organic Plus" strategies to grow sales, according to one industry expert.
UK-based Organic Monitor said worldwide sales of organic food and drink increased 11% to £50 billion in 2008. But it expected the global organic market to register single-digit growth this year for the first time ever as a result of the slowdown. Demand had been affected by the reduction in consumer spending power and declining industry investment, it said.
However, sales of organics were not impacted by economic factors alone it said. Shoppers were also demanding more from organic products than simply being organic.
"Some argue it is difficult to increase organic food sales in the current economic climate because of the price premium," said Organic Monitor. "Rising consumer expectations is another factor. Consumers are demanding more from organic food products. They are increasingly looking at ethical sourcing, traceability, the carbon footprint, sustainability and corporate social responsibility.
"Organic food producers and retailers need to respond to changing consumer expectations to remain successful. Organic food pioneers — known as 'bioneers' in some countries — are already rising to this challenge and have adopted Organic Plus strategies."
Organic Monitor highlighted companies that had successfully embraced the concept of 'Organic Plus', such as Green & Black's organic chocolate, which has become a household brand in the UK.
"Its success is attributed to the product marketed as an ethical chocolate," said Organic Monitor. "It is made from ethically sourced cocoa from developing countries. Apart from certified organic, many of its ingredients are sourced fairtrade."
Organic Monitor also cited Hipp, the largest organic food processor in the world, which it said had pioneered many sustainability initiatives. "It uses renewable energy to make organic baby food, is cutting carbon emissions and recycles 97% of its waste," it explained, adding: "Hipp's environmental performance has been recognised by a United Nations Millennium Business Award."
Meanwhile AgroFair, the leading supplier of organic and fairtrade fresh produce in Europe, had invested in a number of enterprises to help marginalised producers in Africa and Latin America.
Certification agencies were responding to the growing sophistication of the organic food market by integrating aspects of sustainability into their standards, said Organic Monitor.
"2009 brings fresh challenges to the organic food industry," said Organic Monitor. "The global economic slowdown coupled with changing consumer behaviour is affecting organic food sales. Food companies and retailers need to re-align their organic product ranges to meet rising consumer expectations. With consumers increasingly looking at sustainability, companies are advised to follow the 'bioneers' and adopt Organic Plus strategies."