Milling & Baking News - November 18, 2008 - 25

Food Ingredient Solutions

Smooth sailing in rough waters
Organic sweetener and grain options increase as category
stays strong.

his decade has seen market
influences such as the low-carbohydrate craze, rising commodity costs and now an economic
downturn. Yet through this turbulence, the organic food market keeps
increasing sales at a steady pace.
Many prognosticators are convinced
growth will continue, and grainbased foods should play a role.
Grain-based food manufacturers
wanting to invest in organic products should be aware of increasing
availability and options in organic
ingredients, including grains and
sweeteners.
Research and Markets, Dublin,
Ireland, a source for international
market research and market data, expects the global organic food market
to reach $70.2 billion by the end of
2010, according to its "Emerging Organic Food Markets" report released
this year. The North American organic food market grew at a compound
annual growth rate (CAGR) of about
21% during 2005-07, according to
the report, and North America and
Europe accounted for 96% of global
organic food revenues in 2007. Packaged Facts, Rockville, Md., estimated the natural and organic food and
beverage market in the United States
grew nearly 68% between 2005 and
2008, for a CAGR of nearly 19%.
New research from Mintel International, however, predicts growth rates
for organic food and drink will decline
as the economy struggles.
"Across the board, Americans are
spending less and 'organic versus traditional' is a decision many people are
thinking about carefully," said Marcia
Mogelonsky, senior analyst at Mintel.
A good deal of organic growth is
happening in children's products, including grain-based foods. According
to Mintel's Global New Products Database, 67 new organic baby products
were launched in the United States
in 2007, compared with 61 in 2006
and 35 in 2005. The HappyBellies
bakingbusiness.com / world-grain.com

organic product line from HappyBaby, Brooklyn, N.Y., includes brown
rice, oatmeal and multigrain cereals.
Two grain-based organic food
categories have surpassed $100 million in U.S. sales, according to The
Nielsen Co., New York. Organic
ready-to-eat U.S. cereal sales were
$130 million for the 52 weeks ended
July 12 in food, drug and mass merchandiser stores, excluding WalMart Stores, Inc. The sales figure
marked nearly a 6% increase from
$123 million in the previous 52week period. Organic tortilla chip
sales reached $101.4 million, up 4%
from the previous year.
Annual U.S. sales of organic bread
are nearing $100 million, according to
The Nielsen Co. Sales reached $95.5
million in the 52 weeks ended July 12,

up more than 18% from $80.7 million
in the previous 52-week period.
The economic downturn's potential
negative effect on organic products
was touched upon in the June issue
of "Facts, Figures & the Future," a
newsletter edited by Phil Lempert
and published by Nielsen and the
Food Marketing Institute.
"Are foods and beverages with
organic claims (and higher prices)
immune to the deepening economic plague of 2008?" the newsletter
asked. "Nobody knows for sure -
though recent surveys show consumers are less confident and expect
to shop thriftier to nourish their
families, which could prompt more
purchases of conventional consumables at the expense of organics.
"Yet the counter-trend to eat

ᮢ U.S. sales for two organic categories, ready-to-eat cereal and tortilla chips, have
surpassed $100 million annually.

Milling & Baking News

November 18, 2008 / 25

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - November 18, 2008

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