U.S. sales of organic foods and beverages have grown from $1 billion in 1990 to $24.8 billion in 2009. Sales in 2009 represented 5.1% growth over 2008 sales (Industry Statistics and Projected Growth, 2010). These trends are having a significant impact on the food market industry as a whole, and in particular the organic foods markets.
Provide a discussion of the trends in the organic foods industry and how these trends will impact the organizations that sell organic foods.
Examine the competitive environment that organic foods can create for an organization and apply Porter's model, providing an analysis of each factor relative to the industry.
Identify the opportunities and potential threats to the organic foods industry by completing a SWOT analysis.
How can a competitive advantage be achieved using the strengths and opportunities identified in the SWOT?
Industry statistics and projected growth. (2010, June). Retrieved from Organic Trade Association Web site: http://www.ota.com/organic/mt/business.html.
Trends in organic food industry and how they will impact organizations selling organic foods:
Thilmany (2006) provides that organic agriculture status changed significantly when USDA -NOP standards were finalized in 2002 and that organic has recorded one of the fastest growths in United States agriculture. Retail firms have improved stocking of organic foods due to greater consumer demand. Increased demand for organic demand has been driven by improved consumer awareness and knowledge concerning healthy aspects of foods that they consume. Consumers are increasingly health conscious and this has been the driving force for improved performance in organic food industry.
Organic Food Trends (2011) provides that for the last 20 years the industry has registered 20% growth and that it is projected that the industry will register slowing but steady growth in the future. According to Industry Statistics (2011), organic food sales in the United States amounted to $ 26.7 billion compared to $ 1 billion in 1990 and this indicates that the industry has experienced tremendous growth. In 2010 organic food sales increased by 7.7% compared to 2009 whereby fruits and vegetables registered the highest increase amounting to 11.8% (Industry Statistics, 2011).
Industry Statistics (2011) provides that organic foods constituted 4% of total food and beverage sold in 2010. The value of organic non food sales amounted to $ 1.97 billion meaning that total organic sales for both food and non food amounted to $ 28.682 billion in 2010 which is a 9.7% increase compared to 2009 (Industry Statistics, 2011).
Mass market retailers such as supermarkets, mass merchandisers and warehouse stores sold the highest proportion of organic food accounting for 54% of total sales and natural retailers accounted for 39%. Other channels used in the sale of organic food include use of the internet, through exports, farmers' market and mail order (Industry Statistics, 2011). Trends in the production of organic food indicate that certified organic cropland acreage between 2002 and 2008 registered 15% annual increase. Industry Statistics (2011) provides that in 2008 certified organic acreage amounted to 4.8 million acres which constituted 2.6 million acres for organic cropland and 2.2 million acres for organic pasture. Cropland under organic food accounted for 0.6% of total farmland in the United States.
Industry Statics (2011) provides that sale of organic food worldwide amounted to $ 54.9 billion in the year 2009 compared to $ 50.9 in 2008. The countries that consume the ...
The solution discusses environmental analyses for the organic foods industry, including the U.S. sales of organic foods and beverages.