Fruit and veg driving European organic market
European market is still dominated by fruit and vegetables. But it
is increased shelf space for organic exotic and tropical fruits
that is expected to provide the biggest impetus for future market
growth.
With organic fruit and vegetable market continuing to dominate sales, it is the continued popularity of this segment that is contributing to a growth rate of 26 per cent for the European organic food industry between 2001 and 2004.
The prediction falls in line with experts opinion that the market for organic foods has still not peaked, as consumers in developed markets strive to improve the quality of their foods and make more ethical purchases.
Datamonitor estimates that in 2004, the total market for organic food in Europe was worth €20.7 billion, while the market for fruit and vegetables came in at $5.8 billion.
In particular it is organic bananas that are showing the most demand, as consumers seek to make both organic and fair-trade products a more regular part of their shopping basket. The Research and Markets report shows that of the 80,000 tonnes of organic bananas now sold in Europe, approximately half of these sales occur in the UK. In line with this figure, sales of organic fruit in the UK now total €330 million a year, making it the largest in Europe.
In line with this, the report shows that it is the organic fruit market that is expected to show that is expected to see the biggest growth. Although organic vegetables continue to account for the highest proportion of sales, growing interest in organic tropical and exotic fruits such as bananas is expected to be the main driving force behind the overall growth of the fruit segment.
Over the years it is the UK and Germany that have grown to dominate the European organic food market, which jointly represent more than half of all the organic fruit and veg sales in Europe. In particular it is Germany that has the highest volume growth in this sector, which last year ran at 14 per cent.
On a European-wide basis, there is a distinct northern-southern European divide with regards development. In line with the strength of the market in both the UK and Germany, the report finds that the highest percentage of organic fruit and vegetables are actually purchased in Scandinavia and the Alpine countries.
Bearing testimony to this is the fact that sales of organic vegetables in Switzerland, Denmark and Sweden currently account for more than 6 per cent of total sales, whereas this figure is still less than 1 per cent in Spain.
A major driving force for the increase in both countries has been the introduction of organic products by mainstream retailers, with a growing number of supermarket and discount chains increasing the shelf space for a variety of fresh organic produce.
In line with the growth in demand for organic fruit and vegetable, the report also points out that there has been a significant increase in the production of organic fruit and vegetables across Europe.
In 1985, just 100,000 hectares of EU farm land was certified organic - less than 0.1 per cent of total farm land. By the end of 2002, this figure had risen to 4.4 million ha or 3.3 per cent of total farm land with market worth around €10 billion.
However, the rise in interest for off-season and tropical products mean that imports represented 22 per cent of the total volume of European sales in 2004.
Looking at the retail side, the report points out that organic food shops are expanding in line with the demand, with some 40 new organic-focused supermarkets opening up in Europe during the course of 2004. Currently supermarkets account for 48 per cent of organic food sales in Europe, but this figure is falling as the sector broadens.
