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Organic Farming Market Research Reports & Industry Analysis

The organic farming supply chain is both like and unlike the supply chain in the conventional food industry. Both begin at farm level, of course. But organic farms tend to be smaller, and many organic farmers sell directly to consumers in addition to or instead of selling to manufacturers. Though it accounts for only a small percentage of the total organic foods market, this direct exchange between farmer and consumer represents the heart of the organic movement for many of its supporters. Food manufacturers may find that they benefit, especially in consumer acceptance, through buying from many small farmers rather than establishing large acreage, although some do create a large-scale organic model.

At the larger market level, organic farm product distribution has become more centralized. Organic farm products also reach consumers through the foodservice market, an evolving trend that is likely to see fast growth as manufacturers develop packaging for the foodservice market.

Manufacturers rely on consistent and high-quality supply from farmers, and farmers rely on the organic price premium to be able to maintain thriving farms using organic practices. A number of organic manufacturers contract with many small farmers. The Organic Farming Research Foundation (OFRF), a nonprofit organization based in Santa Cruz, California, conducts research on organic farmers in its periodic Organic Farmers Survey, begun in 1990.

Though fresh produce is the largest organic category, it is no longer the fastest-growing one. Product categories such as organic meat or organic snack foods represent a growing share of sales, and account for considerable new product activity. The organic food product lineup will continue broadening as ingredients suppliers speed up the pace of developing certified organic ingredients. In the U.S. market, only foods made with 95 percent organic ingredients may be called organic on the label. Furthermore, the additional 5 percent of ingredients must not be commercially available in organic form, and cannot be genetically modified. The proliferation of genetically modified crops in the United States is a concern for many organic farmers, in part because contamination by genetically modified seeds or pollen can threaten organic certification.

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Organic Farming Industry Research & Market Reports

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