Retail sales of certified organic food hit the $1 billion mark in Canada in 2006, a milestone that should give the industry more clout with policy makers.
“It’s a threshold of sorts,” said Ralph Martin, director of the Organic Agriculture Centre of Canada.
“You can be sure that I’ll be using this when I talk to government people.”
The number comes from studies commissioned by the centre. The group is touting it as the first accurate information on the sales of organic products, but the $1 billion figure includes a liberal dose of guesswork.
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At the heart of the studies is a 2006 inventory of grocery store sales conducted by The Nielsen Co., one of the world’s largest market information providers.
It shows the value of certified organic food sales at Canadian supermarkets was $412 million in 2006, up 28 percent from the previous year. That represents 0.9 percent of the $46.5 billion in sales of food categories.
Nielsen was able to estimate a further $175 million of organic sales through smaller grocery stores, drug stores, mass merchandisers, warehouse clubs and specialty shops by using data that tracks the consumer purchases of approximately 12,300 Canadian households.
That adds up to $586 million in sales through mass market channels.
Using bits and pieces of information obtained through interviews, studies and industry estimates, the organic centre was able to tack on sales through other outlets that brought the total to $1 billion.
The group said it was conservative in estimating $330 million in natural food store sales, $20 million in box delivery schemes, $50 million through farmers’ markets, $10 million in restaurant and food service business and $5 million through co-ops and buying clubs.
Armed with the $1 billion total, Martin intends to seek more industry funding from government and to raise the profile of organics in Ottawa.
“I’m hoping this will have some impact as the agricultural policy framework 2 is rolled out,” he said.
The industry isn’t necessarily looking for a separate organic program in the new APF agreement, but maybe something along the lines of an environmental goods and services pillar under which organic producers could be recognized for their contributions to society.
The study could also prove useful in securing additional research money through organizations like the National Sciences and Engineering Research Council of Canada.
“If anything, this should help make the governments and the government programs that have invested in organics feel better about their investments,” said Martin.
The same week the centre came out with its sales estimate the National Post ran a front page story on organics stating the industry had moved beyond a “tiny niche” to become a “major player” in the food industry.
Martin said 0.9 percent of grocery store sales doesn’t justify that statement but he does believe the sector has moved beyond the tiny niche category.
“It is significant enough now that no retail store can ignore it,” he said.
But the industry continues to struggle to keep up on the supply side. An estimated 80 percent of Canada’s organic retail sales come from imported products.
According to Statistics Canada’s latest Census of Agriculture, there were 3,555 certified organic farmers in 2006, which represents 1.5 percent of all growers.
That’s not good enough, said Martin. There is plenty of interest from conventional growers but not many take the plunge. Being forced to use new methods, machines and rotations without realizing any price premiums during the three year transition period is too risky for some.
“More than anything else that’s what keeps farmers from switching to organics,” he said.
Martin has been lobbying the government to provide assistance to growers interested in making the transition into organics, another policy area where the $1 billion sales figure could help change minds.
