Updated: Jun 10
The organic food and beverage market has seen massive development and acceleration in growth in the last two decades. The expansion is driven mainly by the shift in demographics where younger generations are campaigning to increase people's awareness of how important it is to eat healthier while taking care of the environment — the result of regulatory frameworks implemented by governments to transition the industry toward an ecofriendly system. Consequently, more capital has been lured into investing in the sector as profitability grew thanks to subsidies and eased monetary policy. Globally, the organic food and beverage market size is estimated to reach $620 billion by 2026 compared to $220bn in 2019, according to a recent study published by Fact & Factors Global Newswire.
The organic food and beverages market in the US is considered to be the biggest — $58.6bn in 2020. The country currently accounts for a 29.56% share of the global market. China, the world's second-largest economy, is forecast to reach an estimated market size of $86.1bn in 2027, trailing a compound annual growth rate (CAGR) of 13.4% through 2027. Further in the list, Japan and Canada, each forecast to grow at 12.5% and 11.9%, respectively, throughout 2020-2027. In Europe, Germany is the biggest market with a forecast to grow at approximately 10.2% CAGR, while the rest of the European countries will reach $86.1bn by 2027.
Furthermore, the total area under organic farming in the EU continues to increase, and in 2019, it covered almost 13.8 million hectares, 8.5% of agricultural land in the Union. The top three countries with arable lands for organic farming are Spain (2.4m ha), France (2.2m ha), Italy (1.9m ha). Meanwhile, the largest shares of agricultural land devoted to organic farming are found in Austria (24.6%), Estonia (23.1%), Sweden (20.2%) and Italy (16.5%) reveal the latest statistics. According to the January 2021 Eurostat report, Sweden had the highest share of organic cereals (7%) and fresh vegetables (19%) in its total production, while Greece had the highest percentage of organic bovine animals (27%).
The value of the Polish organic food market is estimated at €31 million. That represents 0.5% of the total food market in the country. For three years, the market has been growing at a rate of about 10%. Thus, the average Polish consumer spends around €8 per year on eco-products, double the €4 in 2014. For comparison, during the same period, on average, consumers spent €189 in Switzerland, €158 in the Netherlands, €86 in Germany, and €61 in France. Organic farming in Poland — where organic production takes up only 500,000 ha with more than 18,000 farms — is considered a niche market compared to Western Europe and Scandinavia.
Although Covid-19-induced restrictions have undoubtedly paralyzed trade in physical units, the pandemic seems to be acting as a catalyst for the organic food industry, according to PMR's latest report, growing in 2020 at a rate a few times higher than the overall food market in general. “Bio food market in Poland 2021: growth forecasts for 2021-2026” further states that, in 2021-2026, the average annual growth rate (AAGR) for the organic food market will be close to 10%. In a recent survey by PMR, nearly 1 in 10 Poles eat organic food regularly.
The Polish bio-food market is slowly following the steps of Western Europe and Scandinavia, and its share versus the total food market will continue to grow, thanks to favorable influences on the market, including growing health awareness of Poles, growing middle class, expanding range of bioproducts (especially in large-format stores) at an affordable price and the narrowing gap with conventional farming.
According to a PMR study conducted in July 2021 on a representative sample of 1,032 Poles, around 8% buy organic food on every or almost every grocery shopping trip. This group is predominantly younger (18-34-year-old), with higher education, residents of cities with a population of 200,000-499,000, and from middle-income groups. The frequency of organic food shopping is also correlated with the level of education. Only 4% of people with lower education buy organic food every or almost every time they shop and as many as 35% do not buy it at all.
The main barriers to establishing organic farms in Poland are the necessity to adapt one's farm to the complex EU requirements, low yields compared to conventional farming, the lack of proper support, and a high degree of bureaucracy in both the country and the European regulators. Therefore, for organic agriculture to develop, further education is needed, both for farmers and consumers.
Sociologist Andrzej Klimczuk, in a paper about organic agriculture for Warsaw School of Economics, wrote: "The problem of the commercialization of organic food on a large scale is now a critical one." The biggest concern is that organic farming is not yet ready to step up and fill the void of conventional agriculture. The trend is set where regulation and restriction will make conventional farming slowly unprofitable, helping to close the price gap between organic and conventional products.
Is organic farming capable of meeting the demand of the growing global population? How could regulation smoothly support the transition without compromising food security? How would technology help with improving the yield of organic agriculture? All these questions remain open as demand and supply equilibrium is crucial. At least in Poland, where consumers' appetite depends greatly on disposable income. The organic food industry's faith lies, in fact, between the hands of individuals and down to the choice we have to make while being conscious of the tradeoff.
The organic food and beverages market in the US is considered to be the biggest — $58.6 billion in 2020, a 29.56% share of the global market. In China, the organic food market is forecast to reach an estimated $86.1bn in 2027.
In Europe, Germany has the biggest organic food and beverages market.
The value of the Polish organic food market is estimated at €31 million — 0.5% of the total food market in the country.
The total area under organic farming in the EU continues to increase, and in 2019, it covered almost 13.8 million hectares, 8.5% of agricultural land in the Union.
Organic farming in Poland — where organic production takes up only 500,000 ha with more than 18,000 farms — is considered a niche market compared to Western Europe and Scandinavia.