The Organic Food Market: Opportunities and Challenges

Organic Food and Agriculture -New Trends and Developments in the Social Sciences 64 support for the local economy and food's country of origin, interact and explain the complex organic food consumer behavior.Last, the chapter focuses on explaining the decision making process of organic food consumers by characterizing the differences between market clusters. General trends The organic food marketThe organic market is moving from a niche market to a mainstream market within the agricultural industry, and was originated in the nineties (Agrifood Canada, 2011).It following a number of food scares in the conventional sector.The global market for organic products approximated US $18 billion in 2000 then US $23 billion in 2002 and has increased by 43% reaching US $33 billion in 2005, and US $50 billion in 2008 (Willer andYussefi, 2007; Van Elzakker and Eyhorn, 2010).Double-digit growth rates were observed each year, except in 2009 because of the world economic crisis reducing investments and consumer buying power (Willer and Kilcher, 2011).Further, there are 633,891 farms managing 31 million hectares of "organic" land (Willer & Yussefi, 2007).More specifically, Oceania and Europe account for almost two-third of the world's organic land; 39% for the former and 23% for the latter.At the country level, Australia (11.8 million hectares), Argentina (3.1 million hectares), China (2.3 million hectares) and the US (1.6 million hectares) have the greatest organic areas.These figures 2 translate into a total of 130 countries producing certified organic food, 90 of which are developing countries presenting ideal environmental conditions for the development of satisfactory organic produce.There were almost 1.9 million organic producers in 2009, an increase of 31% since 2008, mainly due to a large increase in the production in India.As a matter of fact, 40% of the world's organic producers are in Asia, followed by Africa (28%), and Latin America (16%).In North America, Canada allocates 0.7 million hectares to organic production while the United States has 2 million hectares.This represents 7% of the world's organic agricultural land.Although organic agriculture is now going mainstream, demand remains concentrated in Europe and North America.However, these two regions are not self-sufficient because production is not meeting demand.It is also obvious that the supply is not located where the demand is.Most of the demand is coming from Europe and North America.Hence, large volumes of organic imports, coming in from other regions, are used to balance the undersupply.In Europe, sales of organic products approximated € 18,400 million in 2009 (Willer and Kilcher, 2011).The largest market for organic products in 2009 was Germany (5.8 billion euros) followed by France (3 billion euros) and the UK (2 billion euros).US sales of organic products grew in 2009 by 5.3%, to reach 26.6 billion US dollars, representing 3.7% of the food market.On the Canadian front, the report of Agri-Food Canada in 2010, based on the 2008 sales of organic foods, concludes that the total Canadian organic market approximates CA $2 billion annually (Willer and Kilcher, 2011).Further to this, sales growth rates by Canadian provinces are distributed as follow: Alberta (44%), British Columbia (34%), Maritimes (34%), Ontario (24%), and Quebec (21%) (Macey, 2007). 2 Survey conducted in 2009 by Research Institute of Organic Agriculture (FiBL) and the International Federation of Organic Agriculture Movements (IFOAM). www.intechopen.comThe Organic Food Market: Opportunities and Challenges 65 2.2 Sustainability, local food, and organics Nowadays, sustainability is becoming one of the main social issues in the business field.Pressure from investors, cuttings on production costs (eg.Walmart), development of a positive image, and being able to charge more for organic foods is prompting large grocery chains to go sustainable (Saha and Darnton, 2005).The issue of sustainability is also analyzed by Jones et al. (2001), concluding that corporate social responsibility in the food retailing industry is translated in terms of support for local food producers, fair trade, healthy eating, commitment to organic products, and help for the local community.For many consumers, the support of local farmers is considered a socially responsible behaviour and partially reflects the belief that OF is locally grown (Hughner et al., 2007).An increasing number of organic shoppers emphasize that local foods and sustainability are in direct relation with their motivation to buy organic food (Zepeda and Deal, 2009).Environmentally conscious consumers are willing to pay a much higher price for sustainable products such as organic and locally-produced foods as ethical considerations are becoming important factors in their decision making process.This encourages organizations to embody corporate social responsibility.It is important to state that there are two sets of consumers: hardcore OF consumers and regular OF consumers (Hamzaoui and Zahaf, 2009).The latter type of consumer is seen as a consumer that buys OF for health or t a s t e r e a s o n s , w h i l e t h e f o r m e r i s d e p i c t e d a s a n a c t i v e c o n s u m e r b u y i n g O F f o r environmental and ethical reasons, along with some health reasons.In other words, the hard-core consumer is commited to the environment whereas the regular consumer is commited to personal health.It is important to note that despite the fact that organics have gone mainstream, there is a new trend amongst hard-core consumers regarding the rapid growth of "industrial organics".This trend is based on a viral and emergent discontent among consumers regarding how the organic food system is evolving (Bean and Sharp, 2011).The main critics are not related to the key elements in the current definition of organics.On the contrary, these concerns are directly related to some economic, environmental and social ideals such as production systems, size of the operations, distribution systems and channels, and capital intensity.The by-product of this situation is what Bean and Sharp (2011) call alternative food systems (AFS).They examine two pathways for achieving sustainability, and propose a comparison among different types of local and organic food consumers in terms of attitudes about food, agriculture and the environment.This helps to understand alternative food consumer's preferences and how these preferences create new demand in the market.Hence, AFS are seen as sustainable and economically, socially, and environmentally more viable than standard systems.Innovative food systems, such as local farmers' markets, are based on low-carbon food distribution systems and could be also classified as AFS.The slow food movement is another good example of AFS. How to referenceIn order to correctly reference this scholarly work, feel free to copy and paste the following: Leila Hamzaoui-Essoussi and Mehdi Zahaf (2012).The Organic Food Market: Opportunities and Challenges, Organic Food and Agriculture -New Trends and Developments in the Social Sciences, Dr Matthew Reed (Ed.),

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