A growing market for organics in Canada

Canada’s organic market grew to CAD3.7bn in 2012 (about 2.7bn EUR), with national sales of certified organic food and non-alcoholic beverages reaching CAD3bn (2.2bn EUR). Results from three organic audits - 2006, 2008 and 2012 -provide an accurate picture of sales growth over the last six years and comparative differences between pre-packaged grocery items and fresh meat and produce. A near-tripling of organic food and beverage sales in mainstream retail in the last six years demonstrates the broadening of the organic consumer market in Canada, with steady growth in sales and market share, despite the impact of the recession on the wider economy. (Graph: Estimated value of total Canadian organic sales and channels in 2012)
 

Including fresh products, organic foods make up 1.7% of total food sales, with the very low market penetration of organic meats and poultry dampening total market share. British Columbia continues to lead this trend with organic products enjoying nearly double the market share seen in the rest of the country. Alberta and Ontario have the next most developed organic markets based on mainstream retail sales.
 

In mainstream retail, organic fruit and vegetables are the clear leaders in organic sales, capturing over 40% of total sales. The beverage category narrowly beat dairy and eggs in terms of sales due to strong demand for organic coffee, that represents half the value of all organic beverage sales. Bread and ready-to-eat cereals lead sales in the bread and grains category. Organic beverages enjoyed the highest rates of growth in mainstream retail between 2008 and 2012. Organic coffee, shelf-stable juices and milk had the highest rates of growth among the top ten pre-packaged grocery category segments. Of the 2008 top category segments all stayed within the top ten in 2012.
 

Of over 3,000 organic food items captured in the market research scan, 43% by volume identified themselves as being grown, packaged or processed in Canada. However, these Canadian products are capturing more value in the market than imported products, with 46% of market share by value. Thirty percent of organic products by volume were identified as imports from the USA, the largest by far of any importing country.
 

National consumer research reveals strong support for organic foods in Canada with 58% of Canadians purchasing organic foods weekly. This rate is even higher for people living in Canada’s largest cities, households with young families and consumers with a university education. Canadians choose organic foods in line with their broader social, health and environmental values. The Canada Organic Regime, launched in 2009, is playing a big role in boosting consumer confidence and interest in organic products (see above). The new Canada organic certification logo (picture) and claim is among the top four most influential claims that increase consumers’ likelihood to purchase a food product.
 

More information can be found in the Canada Organic Market: National Highlights 2013  that accompany COTA’s detailed analysis of the organic market and consumers in British Columbia. According to The BC Organic Market Growth: Trends & Opportunities 2013, the BC checkmark program, which is now in its twentieth year, has fostered a unique awareness in BC of how certified organic food and farming differs from conventional production, along with a widely recognized visual cue for consumers (see picture). This “head start” in BC is evident in many of the findings contained in this study.
 

British Colombia is home to approximately 500 certified organic producers on 61,000 acres of organic land (about 24,500 ha), as well as 110 organic processors and handlers (about 13% of all Canadian organic operators). And while it represents 13% of the Canadian population, BC accounts for 22% of organic food and beverage sales (over CAD662m / 490m EUR - in 2012). The market has grown by an average of 11% since the recession, far outpacing the sluggish growth in the rest of the food sector. The market success of organic products in BC has been influenced by the long history of the provincial organic certification program, the established presence of natural health food stores, as well as more recent growth in both farmers’ markets and mainstream grocery offerings. For BC, it is estimated that total organic grocery sales at the retail level are split 60/40 between mainstream and natural health retailers. (Picture: Cover of the BC Organic Market report)
 

Organic pre-packaged salads have a 39% market share in their category segment, while organic roast and ground coffee represents 15% of all coffee sold in the province through mainstream retail channels. Over 40% of all organic sales in mainstream retail are fresh fruit and vegetables. When asked about their buying intentions over the next year, 98% of BC respondents indicated they planned to maintain or increase their purchases of organic fruit and vegetables. Sixty-six percent of British Columbians buy organic groceries on a weekly basis, making BC the province with the most weekly organic grocery purchasers per capita in the country. Additionally, the research shows that BC consumers of organics spend CAD19 more per week on average than conventional shoppers; however, a comparison of price premiums by category segment found that organic products are on average the same price as their conventional counterparts or slightly higher. (Picture: High demand for organics on farmers' markets in BC)
 

An amazing five-fold increase was observed in direct sales by farmers between 2006 and 2012, particularly through farmers’ markets. This growth in farmer-direct sales represents the growth in sales that support the BC farm community, whereas sales growth in other channels is most often a mix of domestic and imported organic products. Over half of Vancouver farmers’ markets, and 40% of all BC farmers’ market sales were attributed to certified organic vendors in 2012, worth CAD45.5m (EUR 33.7m). COTA has calculated that an additional CAD800,000 (593,000 EUR) of certified organic fruit, vegetables and other food products were sold through 20 Community Supported Agriculture programs in 2012. (Picture: Organic carrots)
 

Sales of organic food through large food-service providers and restaurant chains are beginning to increase. Independent restaurants and select food-service sites have been leading the sustainability trend with greater adoption of organic, local and other progressive buying practices. Large food-service providers and coffee chains are now selling organic coffee. Restaurants are requesting that their distributors carry organic products, and direct buying from farmers has increased. By far the most substantial sales category for organic foods in food-service is coffee, particularly in BC. (Picture: Cover of Canada's Organic Market report)

The reports Canada’s Organic Market: National Highlights 2013 and The BC Organic Market Growth, Trends & Opportunities 2013 are available here: Canada Organic Trade Association. A detailed report on the organic sector in Canada as well as reports on Alberta, Quebec and Ontario will be available in fall 2013.