Report Highlights:
The global organic food market has developed rapidly during the past six years with organic food and beverage sales reaching USD $7.2 billion in 2008. Some analysts expect domestic sales of organic products in China to be as high as $3.6-8.7 million by 2015.
General Information:
The global organic food market has developed rapidly during the past six years with organic food and beverage sales reaching USD $7.2 billion in 2008, an increase of more than 140 percent from the former $3 billion record in 2003. China’s participation is on the rise. Some analysts expect domestic sales of organic products in China to be as high as $3.6-8.7 million by 2015. However, China’s organic food market is still in the early stages of development.
In 1990, China exported its first organic product, certified organic tea, to Europe. Today, domestic production of Chinese certified organic foods is primarily for export, serving international markets in North America, Europe, and Japan. Products include honey, soy powder, beans, sesame, walnuts, pumpkin seeds, grains, oil, vegetables, fruits, beverages, dairy, poultry, and aquaculture. From 1995 to 2006, the export value of organic foods rose from $300,000 to $350 million, with an annual growth rate of 30 percent. In 2007, more than 2,500 organic enterprises produced and sold organic products domestically and for export. The organic sector is still in its preliminary stages, and most exports are in raw form with minimal processing. In the last two years, a few highly processed products, such as organic chocolates, beverages, cleansers, and personal care products, have entered the domestic market. While the majority of Chinese organic products are exported, domestic demand is increasing.
Consumption of organic food was triggered by hundreds of food safety issues in China. In 2000, organic food products became available for domestic consumers, and in 2007 non-food items appeared in large metropolises such as Beijing, Shanghai, Shenzhen, and Guangzhou. Domestically produced organic vegetables generally sell for prices much higher than their conventional counterparts. Therefore, middle to high income classes are the primary consumers of organic products.
Organic products are distributed via conventional supermarkets or specialty stores. Online stores and home delivery are other methods of delivery. Vegetables, beans, and rice comprise the majority of domestically consumed organic products. In Beijing and Shanghai, imported organic lettuce and carrots may be found in upper class neighborhoods. Organic animal production has only recently begun. Pork is the only Chinese certified organic meat found in supermarkets, and one supplier currently monopolizes sales to all retailers. Imported organic meat may be found in high-end supermarkets, but this is rare as most imported product does not have Chinese certification. There have also been cases of unofficial (illegal) organic labels on chicken, lamb, fish, and beef.
Profit margins potentially can be high and market prospects are arguably large. Consequently, some producers look to cooperative farming or assistance from organic enterprises to help in converting to organic farming.
