The United States of America
With retail sales of organic food and beverages amounting to about $ 12 billion in 2003, the United States is the world's largest market for this product group. Industry sources expect recent years' strong growth (20 per cent or more annually) to continue over the short to medium term. In 2002, organic produce sales even grew by 33% (New Hope Natural Media). According to some surveys, retail sales of organic food might reach $ 20 billion in 2005, although other sources are less optimistic and think it will take longer to reach this level.
According to USDA figures, total certified farmland increased from 935,000 acres in 1992 to 2,344,000 acres in 2001, corresponding to about 150%. The biggest increase took place in cropland, which reached about 1,305,000 acres in 2001, while pasture and rangeland amounted to about 1,040,000 acres. Vegetables were grown on 71,600 acres. Major crops were lettuce, tomatoes and carrots. Fruit was grown on 55,600 acres. Main crops included grapes, apples, citrus and tree nuts. However, a wide and varied range of fruit and vegetables are grown organically in the United States.
Organic produce is by far the most important organic item, accounting for over 40% of all organic food sales. Natural food stores are the principal retail outlets for organic fresh produce. Other important channels include conventional supermarkets and "direct-to-consumer" sales, e.g. farm-gate sales, farmers' markets and "community supported agriculture" subscription (CSA). While both the natural food stores and the conventional stores sell organic produce, they approach the sector differently. The natural food stores usually focus on organic produce and will offer conventional produce only when organics are not available. Most mainstream supermarkets, on the other hand, feature conventional produce and provide limited organic produce to complement their conventional range. However, some conventional supermarkets are also opening their own natural food departments.
Amongst the most important processed fruit and vegetable products are fruit juices and other fruit beverages, jams and marmalades, pasta sauces, frozen, canned and dried fruit and vegetables. Organic fruit and vegetables are also used as ingredients in various prepared food categories, including baby food. For most processed fruit and vegetable products, natural food stores are probably still the principal outlet, though for some items like frozen vegetables, the conventional supermarkets are equally important. For organic food as such, conventional supermarkets have now become the largest outlet with natural food stores a very close second.
Foodservice is still extremely small in organic products, including fruit and vegetable, but some of the big companies are starting to realize that there is a huge business potential. As more and more consumers, including school feeding systems and student campus dining services demand organic food, we shall see this sector develop.
National standards on organic agricultural production and handling, labelling and certification, etc. (National Organic Program of the USDA), implemented in October 2002, are having a significant impact on the development of the United States organic industry. Throughout the value chain, from the domestic or foreign farmer to the final consumer, the standards will increase the focus on organic products and help to regulate and promote the trade.
While most of the fresh organic market consists of domestic production, a considerable part of total requirements is imported. Organic fresh produce importers/distributors are responsible for importation, warehousing and distribution of the product. Processed fruit and vegetable products are mostly imported in bulk, e.g. fruit juices, concentrates and pulp/purée, by specialized importers who supply food and beverage manufacturers. There is also some import demand for retail-packed fruit and vegetable products.
Import demand for organic fresh produce includes tropical and other products that are not grown in the United States; off-season products that are grown domestically, but where there is unmet demand outside the US season; and in-season products, also grown domestically but for which there is a temporary or more permanent shortage because of strong and increasing demand.
Canada
With retail sales estimated at US$ 850-1,000 million in 2003 Canada is ranked as the sixth largest market in the world for organic food and beverages. The market appears to be growing rapidly, probably by 20-25% annually. For some product groups, growth rates may be considerably higher.
Canada is a major producer with a total certified organic production area of about 430,000 hectares (over one million acres), according to Agriculture and Agrifood Canada; the main crops are grains, oilseeds, dried legumes, fruit and vegetables and maple syrup. About 1.2% of all farmers and 5% of fruit and vegetable growers are organic.
For climatic reasons a large share of the organic food range cannot be grown in Canada and must be imported. Most imports come from the United States, probably at least 80-90% (most of which is packaged food). In the case of fresh produce imported from the United States, it must be noted that a considerable amount of this is first exported to the US from Latin America, in particular from Mexico. Major Canadian distributors also import some products direct from foreign suppliers other than the USA.
Distribution channels are characterized by the huge size of the country, i.e. regional distribution is commonplace. For example, the largest distributor of fresh produce has distribution centres in Vancouver, Toronto and Montreal. Each centre purchases fresh produce locally or in the region, whereas imports for the whole country tend to be handled centrally. It is significant that the big retail organizations, notably Loblaws, have introduced a range of organic fresh produce and other food products.
With the exemption of the province of Quebec (and to some extent British Colombia) there are no legal requirements for organic certification, although a voluntary national standard does exist. A committee is currently looking at ways and means to establish a mandatory national regulatory system. In the meantime, the Quebec standard (compulsory in Quebec) or other recognized certification (in other provinces) will be required by most importers and traders. It is important to note that all documentation and labelling must be in the two official languages, English and French.
Like in the USA, import items include tropical and other products that are not grown domestically, as well as off-season products and other items where there is a temporary or more permanent shortage. There is also a strong interest in items that are new to the market or fairly unknown. A major distributor, for example, is currently looking for baby vegetables (e.g. baby corn), Asian and Caribbean vegetables, ginger, etc. Thanks to a high degree of ethnic diversity in Canada, there is a strong demand for exotic produce and ethnic products.
The market for organic processed fruit and vegetables, like jams and marmalade, frozen vegetables and canned items, is much smaller and most of it is imported from the US. However, there is some import demand for frozen and aseptic packs of fruit and puree, including tropicals, e.g. mango, guava and passion fruit. Other processed fruit and vegetable items may also find a small market.
Conclusion
Although there are a number of potential risk factors or threats, like oversupply of certain products, reduced price premiums, competition from other forms of environmentally friendly and sustainable agriculture, etc., there is little doubt that the United States and Canadian markets will offer farmers and producers of organic products interesting business opportunities in the future, whether for domestic players or foreign producers, including those in developing countries, who are looking for new markets.
