The project aims at promoting organic food
in specific target countries
Indonesia, Vietnam, Singapore, Thailand
Let’s have a closer look at these markets to understand the situation and how the organic food market can be developed
in specific target countries
South East Asia
The food sector grows at a sustained pace, thanks to an emergent middle class that feeds a growing demand for food with high qualitative standards, organic food, energetic foods and ready meals. This trend is pushed from the sales of “functional foods” that allow health and environmental benefits, increasing in the whole Asia, hauled by a greater prosperity and awareness of the consumers.
ASEAN as a whole represents the EU’s third largest trading partner outside Europe (after the US and China) with more than € 246 billion of trade in goods and services in 2014.
EU is ASEAN second largest trading partner after China, accounting for around 13% of ASEAN trade.
EU is by far the largest investor in ASEAN countries accounting for 22% of total FDI inflows in the region. EU companies have invested an average € 19 billion annually in the region (2012-2014).
THE MARKET OF SOUTH-EAST ASIA REGION FOR ORGANIC FOOD AND BEVERAGE
Grand View Research projects that Asia-Pacific will become the fastest-growing market for organic food and beverages globally, expanding at an estimated compound annual growth rate (CAGR) of 28,5.
The market of the organic food in the region is strongly dependent on the imports, especially the market of processed organic products.
Markets like the ones of Singapore, Thailand and Indonesia are the most relevant in terms of dimensions and perspectives in the brief and middle term and considering the economic customs union of 2015, they are the markets of reference for the whole region.
Singapore and Thailand are the two natural hubs of the region, as they offer logistic advantages thanks to their strategic positions. High percentages of growth are also anticipated for the next years thanks to the increase of preferences for organic products from the consumer and the increasing proposals of the distributors.
Organic products represent quality and safety by nature, are perfectly inserted in the context as that of the Asian South-East, for its vivacious nature and dynamics.
The ASEAN area represents today the good economic fabric where to make business and to commercialize products. The heterogeneity of these countries, with different but similar characteristics in terms of consumptions, allows to enter a market where organic food is in continuous growth, and introduces above all great opportunities for all products coming from Europe, including the ones of the Mediterranean diet, considered “cool”, healthy and fashion from the young people of a lot of Asian metropolises with high and middle buying power.
ORGANIC AGRICULTURE PRODUCTION IN THE REGION
The organic agriculture cultivated area in the South-East Asia region is in continuous expansion, as per Fibi and Ifoam, for the year 2016 it registered 126.014 ha in Indonesia, 57.189 ha in Thailand and 53.348 in Vietnam.
The import of organic products in the South-east Asian area plays a fundamental role: in average Organic Monitor esteems that over 80% of the organic productions locally consumed depend on imported products.
The market of Singapore is totally dependent from organic imported food, because the country has very few organic agriculture cultivated land. The imports of organic food for the local market in Malaysia are about 70%, while in Thailand they reach 57%.
According to Fibl – Ifoam The world of Organic Agriculture 2018, in Indonesia and Thailand there is a fully implemented organic legislation, while in Vietnam there is a national standard, but no national legislation.
Singapore doesn’t have any standard or rule and therefore norms don’t exist on organic products certification, there is only a 2015 amendment of the National Food Law regarding a requirement that food products labelled as “organic” (or similar terms) must be certified as organic under an inspection and certification system that complies with the Codex Guidelines for the Production, Processing, Labelling and Marketing of Organically Produced Foods, GL 32-1999.
This situation has still a large way to go for improvements, still leaving operators to proceed in autonomy and to freely interpret their own terms about organic agriculture. Today it is still possible to find in commerce products with the wording “organic” containing a modest part of the ingredients coming from organic agriculture.
There is still a lack of clear references for the sector that has inevitably brought to scarce understanding of the method of production, control, certification and the substantial differences that characterizes the organic products in comparison to those conventional.
Similar situations are present in all the countries of the Southeast Asian region and particularly in Indonesia, Thailand and Vietnam, where restrictions don’t almost exist (or control measures are not yet implemented) to the use of the term “organic” on the products labels.
In this scenario, greatest trust has been attributed during the years to organic products imported from the European Union and from North America, that since longer time are known as being able to guarantee reliable organic rules and controls.
US Department of Agriculture defines organic production as the use of cultural, biological, and mechanical practices that support cycling of on farm resources, promote ecological balance, and conserve biodiversity. Organic producers are required to avoid the use of synthetic chemicals, antibiotics, and hormones in crop and livestock production—and rely instead on biological pest management, cover crops, and other ecologically based practices. Research has associated these practices with a variety of benefits, including reduced pesticide residues in food and water, lower energy use, and enhanced biodiversity.
According to Fibl-Ifoam the world of organic agriculture 2017 (nota 27), U.S. organic food sales account for almost 5% of total U.S. food sales, having exhibited double-digit growth during most years since 2000 and the organic share has been growing rapidly with a 2015 pro-capita consumption of 111 euro. In 2015, the Organic Trade Association estimated U.S. organic retail sales at $43.3 billion, growing 11% over the previous year. Along with natural food supermarkets, restaurants, and direct marketers, most major U.S. food retailers—including Costco, Walmart, and Target—have expanded their organic food offerings in recent years.
THE GROWTH IN THE ORGANIC MARKET
Organic products have shifted from being a lifestyle choice for a small segment of consumers to being consumed at least occasionally by many Americans. In 2014, Gallup included questions on organics in its annual food consumption survey for the first time and found that 45 percent of Americans actively tried to include organic foods in their diets.
Consumer interest in organic food, however, varies by demographic and region. Over half of survey respondents age 18 to 29 reported that they actively try to include organic products, compared with one- third of those age 65 and older. The share of Americans with annual household income under $30,000 that actively tried to include organic foods (42 percent) was similar to the share with over $75,000 in household income (49 percent). And a higher share of consumers seek out organic products in theWest (54 percent) than in the East (39 percent), South (43 percent), and Midwest (47 percent).
While fresh fruits and vegetables were still the top selling organic category, organic sales in all the other food categories also grew between 2005 and 2015. The U.S. organic dairy sector is the second largest category of organic sales, and organic dairy production is also expanding. According to the Organic Trade Association, organic food purchases accounted for approximately 5 percent of total U.S. at-home food expenditures in 2015, more than double the share in 2005.
ERS analysis of U.S. organic sales data for five major retail food categories shows that the organic market share increased for most categories between 2009 and 2014. The highest organic market share in 2014 was for organic milk (14 percent of total sales), followed by organic eggs and organic vegetables (both at nearly 7 percent). Previous ERS research on the organic market share of 17 individual food products showed increases for all products examined between 2004 and 2010. These products’ organic market share in 2010 was generally higher for foods frequently fed to children and for those with lower premiums, including spinach, granola, and carrots.
U.S. adoption of organic systems has been much higher in some sectors. Markets for organic vegetables, fruits, and herbs have been developing for decades in the United States. Organic farming systems were used on 6 percent of U.S. vegetable acres in 2011 and on 4 percent of fruits and nuts acres. In contrast, organic production systems were adopted on less than 0,3 percent of the U.S. acres for corn and soybeans, the two largest crops in the United States.
USDA’s organic regulatory program data show that organic farm production and food-handling operations are concentrated in California (the country’s top fruit and vegetable producer), the Northeast (which has many small-scale organic farms), and the Upper Midwest (a major producer of organic milk). North-eastern States have the highest share of certified organic farmers, particularly Vermont and Maine, where 5 percent and 6 percent, respectively, of all farmers are certified organic. In California, more than 3,6 percent of all farmers are certified organic.
Organic processors, manufacturers, and other food-handling operations are concentrated around large metropolitan areas, while certified organic livestock operations are located predominantly in the Great Lakes region. Southern States have historically had the fewest organic operations, although USDA data show that several of these States have seen high growth recently. In New York, Indiana, North Carolina, Missouri, and Texas, more than half of organic producers were newly certified in 2013.
The top 10 States for organic farm sales were California, Washington, Pennsylvania, Oregon, Wisconsin, New York, Texas, Michigan, Colorado, and Arizona. These States accounted for 78 percent of the total value of all U.S. certified organic commodities sold in 2015. California alone contributed 39 percent of total U.S. organic farm sales.
Certified organic farm sales were $6,2 billion in 2015 and accounted for approximately 2 percent of total U.S. crop and livestock receipts. While overall U.S. crop and livestock receipts declined 11 percent between 2014 and 2015, sales of certified organic crop and livestock products increased 13 percent. Fruits, vegetables, and other specialty crops were the top organic sector in 2015—with 46 percent of total organic sales—followed by milk and eggs (31 percent), livestock and poultry (12 percent), and field crops (11 percent). Top individual crop sales in 2015 included organic apples ($302 million), lettuce ($262 million), and grapes ($210 million). The top animal product sales were milk ($1,2 billion), eggs ($732 million), and broiler chickens ($420 million).