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Organic foods

Organic food market expected to surge over next five years as consumers demand chemical-free food

Tuesday, October 17, 2006 by: Ben Kage
Tags: organic foods, chemical additives, health trends

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(NewsTarget) As more consumers vote for chemical-free food through their spending, the U.S. organic market is set to grow strongly in the next five years, according to consumer media and market research organization Mintel.

The report states that the increased availability of organic foods in mainstream grocery stores is going to significantly affect which foods consumers purchase, and valued the organic food market at about $3.6 billion in 2006, up $2.1 billion dollars since 2001. The researchers estimate that the market will grow a further 44 percent between 2006 and 2011, as organic food sales through food, drug and mass merchandisers (FDM) have already jumped 38 percent between 2004 and 2006, spurred on by increasing demand for organic fruits, vegetables and prepared foods. The organic meat portion of the market is also set to grow significantly, the report found, as sales increased 140 percent between 2004 and 2006.

The report cites consumer desire to avoid pesticides, hormones, antibiotics, chemicals, genetically modified organisms, and bovine spongiform encephalitis (BSE, also known as mad cow disease) as the major force behind the organic market's growth.

Retailers are attempting to capitalize on the increased interest in organic foods by offering private label organic products at competitive prices; the report found that price was a major barrier for consumers who have not yet purchased organic products. Currently, about 65 percent of Mintel's respondents said they purchase their organic foods through supermarkets, 45 percent said they buy from health food stores, and 24 percent named Wal-Mart as their organic food source. Mintel said that Wal-Mart's planned organic foods line -- which will be available at a relatively cheap 10 percent price increase over conventional products -- will boost the market overall.

However, Mintel's report found that consumers were not just looking for their labels to say "organic," and most were looking for products free from artificial ingredients and additives. Supermarkets have been trying to tempt consumers through "natural" ingredients, which can use mainstream (as opposed to organic) ingredients as long as they are not artificial ingredients, but natural labeling is not consistent, nor is it controlled by the government.

"Consumers are rapidly becoming aware of the dangers of non-organic foods," said Mike Adams, author of Grocery Warning, a book that details dangerous ingredients in everyday foods. "The more people learn about the chemicals, additives and contaminants found in non-organic foods, the greater their demand for organic. It's only natural to see this demand surge as consumers are increasingly learning the truth about the foods found in grocery stores."

When Mintel published its report, spokespersons were quick to point out that they could not estimate the impact of the recent E. coli outbreak in fresh cut spinach.


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