By Hugh Finlay
The organic part of the food market has been growing in the US at the rate of double digits since the start of the century. This makes organics a very promising area for investors, in the future, according to Scott La Rue, a Piper Jaffray investment banker. He was speaking to an audience at the Organic Grower Summit in California. Sales of organic food are rising 13 times faster than non-organic. Scott said "It's stunning to see the amount of capital coming into this sector. It's a very, very active sector on Wall Street." He pointed out that organic food is particularly popular with millennials, who are 75 million in number in the US.
Organic food companies at the conference have noted that it is easy for them to attract investment for their organic farming projects.
They also concluded that there is a place in the organic market for both small growers, and larger scale growers. The small scale growers introduce people to organic food, and this helps the larger scale growers to introduce organic food to big retailers, as they are able to offer a wide diversity of organic food products to keep organic shelves full during the year.
An area where organic food sales have been growing fast in the US, in the past few years, is in the delivery of ready made organic meals. It allows people in most parts of the US to receive organic meals, wherever they live. This caters for busy people with the money, and the inclination to spend on prepared organic meals.
An interesting observation by a former member of the US Department of Agriculture, Miles McEvoy, is that areas of the US with a higher level of organic farming, also have lower rates of poverty and higher standards of living, compared with other areas of the country. Miles also pointed out that the USDA has done important work in unmasking fraudulent organic food entering the country.
The president of a big Latin American organic food company, Luis Acuna, said "There is no indication, whatsoever, that demand for organic fresh produce, such as apples, is slowing down. Our sales to Asia, Malaysia and Taiwan in particular, are increasing."
In France, organic food sales are booming with over $9 billion spent this year. Organic food sales in France are growing by 10-15% a year. France has 7% of the world market in organic food sales. This puts France in 3rd place, with the US having 40%, and Germany with 11% of organic sales. France imports 30% of its organic food, because the demand for organic food in France is bigger than the supply from French farmers. Over half of the imported organic food could, in theory, be grown by French farmers.
Not far behind France in the demand for organic food is Canada, China, and various EU countries.
In India, the state of Sikkim has imposed a ban on the sale of a wide range of non-organic food. The reason given is that the chemicals used in growing these foods are a hazard to human health.