Organic coffee also popular Major grocery stores are devoting more space to organic goods, including dairy and eggs
Organic sales continue to grow at an impressive rate in Canada, according to a new study.
Food and beverage revenues reached $2.98 billion last year, which represents 1.7 percent of total Canadian grocery sales. That’s up from approximately a 1.3 percent share in 2008.
“When we look at the rest of the food sector, we’re not seeing anything like this type of growth,” said Matthew Holmes, executive director of the Canada Organic Trade Association.
Mainstream retail grocery stores accounted for 45 percent of organic sales, with the remainder of purchases happening at health food stores, online retail outlets, farmers markets and restaurants.
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Fruit and vegetables comprised 40 percent of organic sales. Beverages narrowly beat out dairy and eggs to capture second place at 16 percent because of strong sales of organic coffee.
British Columbia led all provinces, with organics accounting for nearly three percent of grocery sales, nearly double the market share in the rest of the country.
Rob Gerlsbeck, editor of Canadian Grocer magazine, said a .4 percentage point increase in market share over four years may not sound like a lot, but it is impressive considering the total grocery pie is worth more than $100 billion.
“Organics has become a much bigger category in grocery stores. It has gone really mainstream,” he said.
Major retailers are devoting more shelf space to organic goods, especially in the produce aisle. It meshes well with another trend: increased label scrutiny by customers.
“You’re seeing companies cleaning up their ingredient lists, trying to cut out all the chemical type things and really simplify the ingredients,” said Gerlsbeck.
Consumers view the “Canada Organic” certification logo as a symbol of pure and natural food.
Holmes said the market for organic food shrunk during the global economic recession but has bounced back, partly because of the launch of Canada’s organic regulation in 2009.
“It’s pretty clear that the organic market continues to grow,” he said.
Price premiums for organic grain have returned after a lengthy hiatus, which saw a lot of growers exit the market.
Leslie Johnson, marketing manager for Growers International Organic Sales Inc., recently estimated the industry lost one-quarter of its growers in Western Canada because of the price collapse and a few years of wet growing conditions that led to a proliferation of hard-to-control weeds.
Holmes insists the industry hasn’t lost any of its 3,600 to 3,800 farmers over the past few years, but maintaining the status quo isn’t good enough for an industry experiencing strong sales growth.
“We want more farmers, there’s no question about that. We think there’s lots of room for growth and a really stable market with a strong future,” he said.
The study showed that 43 percent of the 3,000 organic food items included in the market research scan were grown, packaged or processed in Canada.
The United States was the second biggest supplier with 30 percent of the sales volume, while 19 percent of the product came from unknown origins.
The study showed that 58 percent of Canadians buy organic products weekly.
“(That) is showing the broadening of the organic marketplace,” said Holmes.
He is also proud of the finding that households in all socio-economic categories are buying organic products, discrediting the notion that organic food is too expensive for many Canadians.
