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ORGANIC PERSPECTIVES
March 2000
1. U.S. Organic Export
Initiative's European Promotion & More
The Organic Export Initiative, a marketing promotion
sponsored by the four U.S. state/regional trade groups, began
2000 with a seminar and showcase for U.K. buyers in London in
mid-February. Held at the U.S. Embassy's International Marketing
Centre, the event attracted over 100 British buyers who were
introduced to products offered by more than 40 U.S. organic
suppliers.
A key component of the promotion was an educational seminar for U.S. suppliers. They were treated to informative presentations by U.K. organic retail industry experts Ren�e Elliott, Director of Planet Organic, and Craig Sams of Whole Earth Foods and the U.K. Soil Association. Both presenters gave an upbeat overview of the current status and future prospects for retail marketing of certified organic products in the U.K. Following London, the mission departed for BIOFACH, the world trade fair for organic food and natural products, in Nuremburg, Germany, where they joined 1,440 exhibitors from 50 countries. BIOFACH experienced record attendance this year, attracting more than 23,000 visitors during the 4-day show. U.S. participants indicated that both the London and Nuremberg venues provided excellent opportunities to meet buyers face-to-face, and make the important contacts that can lead to sales.
Upcoming opportunity for U.S. organic suppliers: The Organic Export Initiative's next stop will be Osaka and Tokyo, July 17-21, 2000. Suppliers will spend two days exhibiting and networking with buyers at the popular "Great American Food Show" in Osaka (July 18-19) and then move to Tokyo for the July 21st kickoff of the "Organic Japan 2000" showcase and seminar. For more information on this event or future organic-natural product promotions, contact Emily Felt at the North Carolina Department of Agriculture emily.felt@ncmail.net or 919-733-7912 ext 276).
2. Philippine Organic
Market
Currently, the Philippine organic sector is relatively
small. Industry estimates peg the overall value at about Pesos
250 million ($6.15 million) of which about 60 percent consists of
imported processed products. Domestic production is growing at 10
to 20 percent annually although less than one percent of the
agricultural acreage in the Philippines is farmed organically,
with most concentrated outside metropolitan Manila. Major
domestic output includes fresh and processed fruits and
vegetables, herbs and spices, rice, sugar, soybeans, honey,
livestock and poultry, dairy and fertilizer. Growing demand for
organic products is expected to outpace local production.
Presently, organics is a niche market supported by higher-income, health-conscious Filipinos who have traveled overseas, and expatriates concerned with food safety, the environment and personal health. Major market constraints include lack of awareness of organics among mainstream Filipino shoppers, limited availability, and prices which average 20 to 30 percent higher than conventional products. The major force behind the development of the Philippine organic industry is the Organic Producers Trade Association. NGOs and interested parties from Europe are also helping expand the sector. In November 1999, the Philippine Department of Trade sponsored an international organics conference in Tagaytay City which drew participants from around the world, and heightened awareness about organics in the Philippines.
Best prospects for U.S. exporters are processed foods, but opportunities also exist for inputs such as seed, feed, technology and equipment to support the growing domestic production sector. Organic regulations are being developed, but currently there are no special labeling or import requirements for organic products. U.S. exporters interested in the Philippine organic market should work closely with importers and be prepared to commit resources for promotion and advertising. Source: Attache Report RP0015.
3. Mexico's Expanding
Organic Sector
Organic production in Mexico is on the upswing. From
1996 to 1998, land area devoted to organics increased 140 percent
from 23,000 hectares (56,800 acres) to 55,000 hectares (135,900
acres). Organic methods are used in many areas of the country,
yielding a diversity of crops including coffee, tomatoes, hot
peppers, cucumbers, onions, garlic, peas, melons, squash,
eggplant, apples, sesame, beans, chickpeas, blue corn, peanuts,
vanilla, pineapples, herbs, avocados, and more. About 95 percent
of Mexico's 28,000 organic producers farm small areas and
together account for 89 percent of the organic acreage. The rest
are large-scale commercial growers who benefit from economies of
scale and a more developed infrastructure. Most of Mexico's
organic output is destined for the export market. Exports are
valued at US$70 million annually. U.S. and European certifiers
are active in certifying crops for export, while their Mexican
counterparts certify products for local consumption. The demand
for imported organic products in Mexico currently is quite
limited due to low consumer awareness, high prices, undeveloped
distribution channels and strong domestic production. Source:
Attache Report MX0016.
4. Growing Awareness of
Organics in Hong Kong
Organic foods have been selling in Hong Kong since the
early 1990s. At first the market expanded slowly, attracting
mainly western and Japanese consumers, but more recently, many
affluent, educated, health-conscious Chinese who have resided or
been educated overseas are seeking organic products. In Hong
Kong, organic food is still a relatively new concept. Most
organic products are marketed as health food through specialty
shops, but awareness is growing as consumers learn more about the
diet-health connection, the controversy over GM food, and the
latest trends from Japan, where organic food is in great demand.
Hong Kong has a population of 6.8 million and per capita GDP of US$25,000 (1998). Because the HK dollar is pegged to the U.S. dollar, U.S. products are not subject to price fluctuations based on exchange rates. Currently, there are no import regulations applicable specifically to organic products, but importers and retailers have certifier preferences. Best prospects for U.S. organic suppliers include baby food, rice cakes, grains, fruit juices and breakfast cereals. Packaging is an important attribute to consider, especially when attempting to appeal to mainstream consumers. Source: Attache Report HK0008.
5. Organics Poised to
Take Off in Taiwan
About 1,000 small, specialty stores and some
supermarkets in northern Taiwan carry organic foods. Appealing
first to people with special health needs, organic foods are now
starting to attract the more affluent and educated segments of
the population. In 1999, two stores specializing in organic foods
opened in an area known as Taiwan's Silicon Valley. Further
evidence that the organic sector in Taiwan is developing quickly
was the establishment of a new organic food retailer last year,
Uni-President Organics, the result of a partnership between
Taiwan's largest food company and largest organic food
importer/distributor. Uni-President Organics plans to establish a
chain of specialty organic food stores throughout Taiwan starting
in March 2000.
Organic production in Taiwan is concentrated on about 1,240 hectares (3,060 acres). Major crops include rice, tea, tropical fruit, and vegetables, all for domestic consumption. Although the Taiwan Council of Agriculture, Taiwan's equivalent of USDA, provides extension advice and formulated organic guidelines for growers, organic production is difficult given Taiwan's humid, tropical climate. Thus, Taiwan will remain dependent on imports for a full range of organic ingredients and products, a situation that offers many potential opportunities for U.S. suppliers.
The value of imported organic food is approximately $9.7 million annually. The most common imports are tree nuts, dried fruit, black glutinous rice, wheat flour, soybeans, grains, beans, lentils, various beverages, pasta, canned soup, soy sauce, miso, salad dressing, and a variety of seed and vegetable oils. Limited quantities of fresh produce are imported and prices average about four times those of conventional varieties. Taiwan's processed food sector is also gearing up; last year, tofu and soy milk, appeared on the market, followed by cereal powder and soy sauce. All of the products were made from U.S. ingredients. Source: Attache Report TW0008.
6. Portugal's Organic
Sector
According to the Portuguese Ministry of Agriculture,
there are currently 564 registered organic farmers in Portugal.
As a member of the EU, Portugal has offered
"agro-environmental" subsidies since 1995 to encourage
adoption of organic production methods. These subsidies, offered
for a period of 5 years to growers of a number of organic crops,
have been largely responsible for the expansion in land area
devoted to organic production. In 1993, 2,800 hectares (6,900
acres) were farmed organically, rising to 29,600 hectares (73,100
acres) by 1998. Portugal's main organic products include fresh
and dried fruit, olive oil, wine, and other horticultural
products.
Domestic consumption of organic products is on the rise, but at a very slow rate. Low consumer awareness, high prices and poorer appearance compared to conventional products limit their appeal. Most of the domestic production is consumed locally and imports are limited, consisting of grains, pulses, juice, crackers and jam from other EU countries, although reportedly some U.S. products may be transshipped from elsewhere in the EU. Source: Attache Report PO0006.
7. Demand Rises for
'Natural' and 'Organic' in Scandinavia
Both Sweden and Finland have experienced strong
economic growth in recent years, and consumer confidence is at an
all-time high. Characterized as sophisticated, well-educated,
health-conscious and receptive to new products and concepts,
Scandinavian consumers are willing to pay more for foods that
offer convenience, quality, and perceived health benefits. Strong
demand for natural, functional and organic foods continues.
Lifestyle changes such as a growing popularity of eating out and
the Internet will influence future buying patterns. For example,
although Internet food purchases by consumers are minimal now,
the future outlook for this retail alternative is promising.
According to recent market research, 50 percent of all Swedes (70
percent with families) are connected to the Internet at home, and
28 percent of Swedes age 16 to 74 see themselves as Internet
customers within five years. Source: Attache Report SW9023.
8. Export-Oriented
Argentina
About 85 percent of the output from Argentina's active
organic production sector is exported, mainly to Europe, with
smaller amounts also going to the United States and Japan.
Organic production has been expanding at the rate of 25 percent
annually for the last few years and is currently valued at $20
million. Rich in natural resources, Argentina grows a wide range
of organic commodities such as grains, oilseeds, vegetables,
pulses, fruits, livestock and more on land that traditionally has
been farmed with minimal use of agro-chemicals. In 1998, 291,605
hectares (720,300 acres) were managed under organic methods, the
majority involved in organic beef production.
Although Argentine consumers of organic products tend to be relatively affluent, well educated, and health conscious, the domestic market for organic products is quite limited now. Nevertheless, the longer term outlook is more promising. Argentina has the largest per capita GDP in Latin America and consumer awareness will rise as supermarkets continue to gradually add organic products to their lines. Also, Argentina is becoming a more popular tourist destination for Europeans and Americans, so in time, organic food may find a niche in the restaurant and hotel sector. The most popular organic foods consumed in Argentina include domestically-produced corn, wheat for bread, apples, pears, lettuce, chard, carrots, olive oil, yerba mate, and other herbs. Source: Attache report AR0005.
9. Trends
Guatemala's Organic
Coffee Production - Coffee is
Guatemala's number one agricultural export, accounting for 21
percent of total exports. The coffee industry employs about 40
percent of the farm labor force, and contributes about 6 percent
of the country's GNP. Organic coffee production is expanding due
to increased demand in the international market and the price
premium, which can reach up to $20 per bag. In 1999, 5 percent of
the coffee produced in Guatemala was organic, the same level as
1998. However, production is expected to rise over the next
several years when land now in transition comes into full organic
production. Source: Attache Report GT9026.
Korean Consumer Food Market Rebounds - The Korean economy grew nearly 10 percent last year, and the growth is expected to continue, reaching 7 percent this year, and 6 percent in 2001. In1999, Korea was the fastest growing of the top 35 markets for U.S. food products, and a larger market for the United States than any single European country. The market for imported consumer-oriented foods jumped by more than 50 percent in 1999 to an estimated $2 billion as the economy rebounded from the economic downturn of 1998. Large-scale retail marketing, relaxed import regulations, and growing popularity of U.S. food with the younger generation are trends that show promise for U.S. exporters. Source: Attache Report KS0012. Of related interest see KS0006 (organics), and KS0007 (Korean Market for U.S. Agricultural Products).
10. New Attache Reports
Although the following reports do not deal specifically
with organics, they may contain useful information to U.S.
producers and exporters of organic products.
11. Upcoming Events
International - 2000
Domestic - 2000
* Indicates a USDA-sponsored show.
ADDITIONAL RESOURCES
| Compiled by Janise Zygmont, HTP/organics, Tel: (202) 720-1176 Fax: (202) 720-3799 zygmont@fas.usda.gov |
Questions? Comments? Contact us.
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