The organic fruits & vegetables market size was USD 31.39 Bn in 2019 and expected to reach USD 61.45 Bn by 2027; this converts into a compound annual growth rate (CAGR) of 8.8% for the forecast period.
Fruits and vegetables cultivated without the use of any chemicals throughout its growth period and post-harvest operations are referred to as organic fruits and vegetables. These products offer several health benefits; hence, the rising demand is anticipated to increase their affordability.
The organic food product market witnessed a slight decline during the first two quarters of the financial year 2020-2021 due to the advent of the pandemic and measures taken by the government to reduce the spread of the virus. However, the net sales of organic products displayed a positive slope since the third quarter of the year. Overall, the market has registered an upward slope during the pandemic.
Various factors, such as changing lifestyle patterns, rising awareness, the transition towards a healthy diet, growth in the area under organic farming coupled with the increase in purchasing power, are the major contributors to the expansion of the market.
A few factors that may create lucrative opportunities for the augmentation of the market include the possibility of incorporation of organic fruits and vegetables in skincare and beauty products, investments by various food product manufacturing companies and the growth of the retail sector.
While organic fruits and vegetables may provide several health benefits, the high cost of procuring these products can hamper market growth. Also, the uncertainty in regulatory guidelines may deter investments from large-scale food product manufacturers.
1) Organic Valley, in June 2020, donated over 140,000 pounds of organic food to communities during the pandemic across the United States of America.
2) In order to support the increase in home delivery demand for organic produce, Iceland Foods Ltd. created over 3000 new jobs during September 2020.
3) In February 2021, Z Natural Foods launched a new mocha mushroom whey protein.
4) During March 2021, General Mills in exchange for full ownership of the Canadian Yoplait business and a reduced royalty rate for use of the Yoplait and Liberte brands in North America entered a MoU with Sodiaal, to sell 51% controlling interest in Yoplait S.A.S.
The organic vegetable segment is projected to witness a compound annual growth rate of more than 10% during forecast timeline, owing to the rising awareness regarding the benefits of consuming these products. In 2019, the organic fruits segment accounted for approximately three-fourths of the market, as a result of its growing applications in the cosmetics, pharmaceuticals, beverage and many other industries.
The frozen segment captured over 70% of the global market share during 2019, owing to benefits such as improved shelf life and the convenience it offers. The shift towards a healthier lifestyle is pushing for the expansion of the fresh segment. During the forecast years, the segment is predicted to grow at a CAGR of nearly 10%.
The online sales channel is expected to register the highest growth rate of around 15% from 2020 to 2027. Surge in globalization, development of IoT and the rise of e-commerce platforms are contributing to the progress of the segment. Nevertheless, the hypermarkets segment held the largest market share in 2019.
The residential segment dominated the market, capturing over 70%. The rising awareness regarding the benefits and increase in disposable income is fuelling the segment forward. On the other hand, the commercial segment is estimated to display a growth rate of close to 11% annually.
North America led the organic fruits & vegetable market in 2019. The growth of the market in the region can be attributed to the changing lifestyle patterns, increase in awareness and the resulting rise in demand for organic produce. Major contributors driving the growth of the Asia – Pacific market are increased income levels, economic stability in the region, improved spending on food products, and the spread of awareness regarding the health benefits of organic products.
Some of the key players operating in the organic fruits and vegetable market include, but not limited to Activz, Campbell Soup Company, DMH Ingredients Inc., General Mills Inc., Green Organic Vegetables Inc., Iceland Foods Ltd., Juices International Pty Ltd., Organic Valley Family of Farms, The Kraft Heinz Company and Z Natural Foods."