Organic Monitor Gives 2009 Predictions

Organic Monitor Gives 2009 Predictions
London-With the slowdown in the global economy, there is some uncertainty about the year ahead for ethical & sustainable industries. At the end of the first month of 2009, Organic Monitor (www.organicmonitor.com) gives its predictions on its specialist industries for the year ahead...

1. Organic Foods
   Global sales of organic food & drink have been increasing by over US $5 billion a year, reaching US $46 billion in 2007. Positive growth is expected to continue in 2009, however slower growth rates are envisaged in countries affected by the financial crisis.

   The UK market has been the most adversely affected because of the harsh economic climate reducing consumer expenditure. Other countries have been less affected with double-digit growth still continuing in northern European countries. Although consumer demand for organic foods remains high, increased price sensitivity is leading consumers to ‘trade downwards’. Thus, organic food sales from discounters and other low-cost retailers are increasing at the expense of other retailers. Retailer private labels are also gaining popularity over manufacturer brands.

2. Natural Cosmetics
   Global sales of natural and organic cosmetics are increasing by over US $1 billion a year. As for organic foods, most demand is concentrated in Europe and North America. Preliminary research shows that European sales exceeded US $2 billion for the first time in 2008.

   Healthy market growth rates are continuing in 2009, with most growth observed in mainstream retailers like supermarkets, drugstores and pharmacies. Retailer private labels are a major driver of market growth; a growing number of retailers are launching certified natural & organic cosmetics under their private labels, offering consumers low-price quality products. However, some rationalisation is expected in 2009 due to a large number of brands competing with private labels for retail shelf-space.

3. Fairtrade Products
   Consumer demand for fairtrade products continues to strengthen in spite of the economic slowdown. Preliminary research indicates that global fairtrade product sales exceeded US $3.5 billion in 2008.

   Growing consumer interest in social & trade issues involving developing countries is driving market growth. Retailer investment is stimulating production of fairtrade products; a number of European supermarkets have converted their entire supply chains of certain products to fairtrade. The fresh produce category is tipped to show the highest growth in 2009.

4. Natural & Organic Ingredients
   Slowing demand from food processors, cosmetic companies and other end-users is bringing supply in balance with demand. After experiencing several years of undersupply, ingredient prices are expected to decline in 2009. Increased globalisation of supply chains is predicted to continue as large ingredient companies spread their production bases.
5. Soya & Functional Foods
   Dairy alternatives are continuing to gain popularity across the globe. The success of soya milk is leading to high investment in related products, marketed as dairy alternatives and / or functional products. Oat-based dairy alternatives are expected to continue to gain ground in 2009. A major advantage soya and oat-based products have is that they can be marketed on health claims.

   Many new functional foods are expected to be launched in 2009, however few are likely to have a long-term presence because of the high rate of product failures in this market.

6. Ethical Textiles
   Rising ethical consumerism is fuelling demand for organic and fairtrade textiles. New product launches are expected to continue in 2009 as investment comes in from new producers and retailers.

   Organic Monitor also expects sustainability to become increasingly prominent in 2009. Natural & organic product companies are at the forefront of adopting sustainable and ethical business practices. This development is leading to some convergence between product sectors. Indeed, many new organic product launches contain fairtrade ingredients. The number of carbon neutral companies is also expected to increase in 2009.

   About Organic Monitor
   Organic Monitor is a specialist research & consulting company that focuses on the global organic & related product industries. Since its formation in 2001, Organic Monitor has been providing a range of business services to operators in high-growth ethical & sustainable industries. Our services include market research publications, customised research, business & technical consulting, seminars & workshops. Visit them at Organic Monitor

   For further information, please contact:
   Ms. Tina Gill
   Organic Monitor
   Tel: (44) 20 8567 0788
   Fax: (44) 20 8567 7164
   Email: press@organicmonitor.com