Organic food industry driven by the increasing focus on organic farming

The global organic food industry has been forecast to increase at a compound annual growth rate (CAGR) of 14.3% through to 2016, driven by the increased purchasing power of consumers, and the increasing focus on organic farming.

Organic foods are foods that are produced using methods of organic farming - that do not involve modern synthetic inputs such as synthetic pesticides and chemical fertilizers. Organic foods are also not processed using irradiation, industrial solvents, or chemical food additives.

Organic food is a $63 billion industry globally, according to the International Federation of Organic Agriculture Movements (IFOAM). From 2002- 2011, the industry grew 170%, or approximately 19% a year.

While organic food accounts for 1-2% of total food sales worldwide, the organic food market is growing rapidly, far ahead of the rest of the food industry, in both developed and developing nations.

Interestingly, the US is the largest single market for organic food (and beverages), but developing countries are the biggest producers of the food we eat. In the US, the organic industry reached $31.5 billion in sales, rising 9.5% from the previous year.

Organic food production is a heavily regulated industry, distinct from private gardening. Currently, the European Union, the United States, Canada, Japan and many other countries require producers to obtain special certification in order to market food as organic within their borders. In the context of these regulations, organic food is food produced in a way that complies with organic standards set by national governments and international organisations.

Governments of various nations are offering strong support and are promoting organic farming as it will increase the contribution of the Agricultural sector to the GDP of their respective countries. This will contribute toward reducing the supply shortage in the supply chain as the market enters next stages of growth.

Organic farming also has a positive impact on biodiversity and enables effective soil management, which could go a long way in mitigating and even reversing the effects of climate change, as also minimizing carbon emissions.

For more information on the global organic food industry, see the latest research: Global Organic Food Industry