American organic market on the move

BioFach America for newcomers and market experts 

Picture: BioFach USA 2006

There was a big demand for stand spaces at last year’s BioFach America – Organic Products Expo in Baltimore. No wonder, as the US organic market has the biggest turnover in the world and never stops growing – at two-digit growth rates over the past years. The approx. 890,000 hectares of organically farmed land in the United States is nowhere near enough to cover the rapidly increasing demand. German companies wanting to take advantage of the chances in this expanding market should not hesitate to present themselves and their products to the professionals in the States and get to know local trading structures at the same time.

The latest Manufacturer Survey 2006 by the American Organic Trade Association (OTA) confirms that the market for organic food and natural products will continue to develop positively. Based on a survey of processing companies, OTA assumes an average annual growth of 11 % until 2025. According to this forecast, the biggest demand for organic food in the coming three years will be for meat and sausage products – with a predicted plus 31 %! These are followed by spices, sauces (+17 %), dairy products (+15 %), snacks and convenience food (+13 %), bread and cereals (+12 %) and drinks (+10 %). Large growth rates are also forecast for the product groups of organic textiles, natural cosmetics, detergents and cleaning agents, and pet food. Growth in 2005 was over 30 %.

The OTA analysis is a rather cautious preview of market development. More progressive estimates by market insiders consider it possible that turnover will rise by 20 % a year. Whether cautious or ambitious, both forecasts make it clear just what prospects and scope the American organic market still offers. It is also a fact that the enormous appetite for organic products cannot be covered by American organic farmers on their own. The shortage is already unmistakable in the meat sector: A market report from Organic Monitor talks of a 60 per cent shortage of pork. The USA is generally dependent on imports for over 30 % of its organic food. After all, some 27 % of the population were already buying organic products regularly in 2004. With a total market of some 300 million consumers and over 160,000 food stores, it takes a lot of goods to satisfy the demand – even at the current organic market share of about 2.5 %.

To avoid further dramatic shortages in future, the OTA supports more consideration of the interests of organic farmers. The Farm Bill, a new plan from the US Department of Agriculture USDA covering the next five years, is on the agenda for 2007. USDA has planned some 6.1 million US dollars a year for developing organic farming, but the Organic Trade Association is calling for further action in view of the strong demand. OTA Director Caren Wilcox is in favour of developing organic farms by supporting them at a level comparable with conventional farming: “The USDA proposals are a step in the right direction, but the organic farmers need more help to satisfy the needs of the domestic and world markets.”

The US organic market is currently very much on the move. Whole Foods Market, the number 1 on the American organic market, has taken over Wild Oats Markets, one of the other big names in the organic food trade. 110 stores in the USA and Canada are changing hands for a total of 565 million US dollars. The last total annual turnover of these stores was some 1.2 billion dollars. The takeover increases the number of Whole Foods Market outlets to around 300 and brings the turnover, which was approx. 5.6 billion dollars in 2006, considerably closer to the 10 billion dollars target forecast for 2010.
 
Companies wishing to establish their products in such a dynamic market need close contact, expert knowledge and dependable partners. They must be familiar with the legislation and the strict regulations of the US Department of Agriculture, the market structures and the existing products available on the market. This applies to both newcomers and companies that already have experience of the US market. The latest information on market development, statutory regulations and trends is offered by the supporting programme at BioFach America – Organic Products Expo, which takes place together with the Natural Products Expo East in Baltimore from 27-29 September 2007. The conference programme starts on 26 September, the day before the exhibition starts. Last year’s event attracted a total of over 1,200 exhibitors, of which some 240 exhibited at BioFach America. The BioFach America – Organic Products Expo is an exhibition exclusively for certified organic food and natural cosmetics. The exhibitors fulfil admission criteria as strict as those at the parent exhibition BioFach in Nürnberg, which again broke all the old records with 2,565 exhibitors and 45,273 visitors in February. The exhibition in Baltimore attracts well over 20,000 qualified visitors every year, which guarantees a large number of interested inquiries for the companies at BioFach America.

Nürnberg Global Fairs offers its established service and support with a full service ranging from transportation of exhibits and hotel bookings to fully equipped exhibition stand. The emphasis is on dependability and partnership. Especially interesting for German companies is the pavilion sponsored by the Federal Ministry for Food, Agriculture and Consumer Protection (BMELV), in which eight German companies felt they were in good hands last year. Market expert Stefan Hauke will analyse the situation for companies interested in export and be available to answer specific questions again this year. The deadline for applications for the German pavilion is 11 May 2007.

Contact for exhibitors:
Till Ahnert
Nürnberg Global Fairs
Messezentrum
90471 Nürnberg
Germany
Tel +49 (0) 9 11. 86 06-86 92
till.ahnert@ngfmail.com

27.03.2007