Global organic shortages continue as demand booms

The global organic sector continues to boom, with Australia, Germany, France and the UK all reporting surging sales, and supply struggling to match burgeoning demand as mainstream consumers increasingly replace non-organic with organic products in their shopping baskets.

The process is being aided and abetted by major retailers devoting greater shelf space to organic products. Health food stores are also reporting buoyant sales. Australian health food chain Macro Wholefoods Market has traded organic products for 22 years and reported a mammoth 800 per cent growth since 2004.

Organic sales grew 15 per cent in Germany last year and 10 per cent in France, with many new products coming to market, and major retailers launching multiple organic lines, often only marginally more expensive than their non-organic counterparts, to meet demand.

"We are happy that the commercial sector, including major distributors, have joined the movement," said Alexander Gerber, of the German Federation of Organic Food Traders.

Market researcher Mintel reported supply constraints were curtailing expansion of the UK organic market, which has grown 70 per cent to more than $4 billion since 2002. Yet Mintel noted farmer reluctance to convert land to organic, and demand for biofuels, was limiting supply, particularly of grain to feed livestock. Consumer concern over food air miles, backed recently by a Soil Association initiative to limit imported organic produce, was adding to pressure on British farmers to boost organic output.

"People who buy organic tend to also be more concerned about the environment and therefore more likely to prefer locally grown food," said Mintel analyst David Bird.

The Soil Association was working with farmers to increase organic acreage and supply. "The lengthy conversion process from regular to organic farming takes several years to complete. Because of this many producers have not been able to react quickly to satisfy the growing demand for home grown organic food. And this has undoubtedly had a huge impact on the growth of the market," Bird added.

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