Mintel Sees Slowing Growth for Organics Print E-mail
Monday, 10 November 2008
Chicago-based market intelligence research firm Mintel has given its prognostication for the organics market – and the news isn't all good.

Although sales of pesticide- and additive-free products will continue growing, according to Mintel, the rate of growth has been slowing and probably will continue to do so. Factors contributing to the slow-down include the weak U.S. economy, increasing food and gas prices, and the rise of private label organic products.

Mintel expects the market for organic food and beverages to reach $7.2 billion in 2008, 140 percent higher than 2003's $3 billion. The company tracked 2,000-plus organic food and beverage product launches in 2007, and expects even more in 2008.

At the same time, however, the price of all food purchased for households has risen more than 7 percent. Marcia Mogelonsky, a senior analyst at Mintel, said, "To cope with higher prices, many shoppers are simply opting not to buy pricey organic or premium brands."

Posing perhaps the greatest threat to organic brands, private labels launched 540 new organic foods tracked by Mintel last year, up from 35 in 2003. In addition, 60 percent of consumers surveyed by Mintel said that whether a product was branded or private label didn't affect their purchasing choice.

Manufacturers of branded organic products can take heart, though; the news wasn't all bad. Mogelonsky said consumers' economic struggles would change their buying habits, but subtly, for the most part. She gave the example of "the formerly all-organic shopper who returns to traditional cookie brands while sticking with organic produce. These small changes will slow market growth."

Twenty-one percent of adults surveyed by Mintel said they bought organic beverages; 47 percent said they bought organic food.

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