Organic Meats In Demand

Jun 29, 2006 3:50 PM

US seeing speedy growth in organic meat sales.

Organic meat sales are continuing to surge in the United States with 51% growth registered in 2005. According to new research data, organic meat is the fastest-growing sector in the North American organic food industry. Organic meat sales have expanded more than 150% since 2002 with high growth rates expected to continue as retail distribution increases.

Exceptionally high demand for organic meats has occurred since the first cases of bovine spongiform encephalopathy (BSE) were reported in US and Canadian cattle in 2003, relays the Organic Monitor. Although the BSE incidents have not eroded consumer confidence in beef products, they have elevated consumer awareness of organic meat production methods, Organic Monitor noted. Organic beef sales in the United States have doubled each year since 2003 partly because of this new consumer awareness of organic meats.

A new study by Organic Monitor found undersupply to have a dampening effect on market growth rates. Producers cannot find enough organic meat supply to meet burgeoning consumer demand with some companies resorting to imports.

The US market for organic meats has become highly import-dependent with organic meats coming in from Latin America, Australasia, and Canada. More than 60% of the organic pork sold in the US is currently imported because of low domestic production levels. Supply shortages are mostly affecting the organic beef and pork markets. Low producer interest in these organic meats has been due to high production costs, lack of certified slaughterhouses and meat processing plants, and inadequate distribution infrastructure, the survey shows.

Although organic meat production has stepped up since 2004, supply is expected to lag demand for a number of years with imports continuing to meet the shortfall in domestic supply. The organic beef market is the fastest-growing sector. However, poultry comprises most organic meat sales volume.

Roughly 26,000 metric tons of organic poultry were sold in 2005 with chicken comprising the bulk. Its domination is because of the short production cycle which enables producers to adapt relatively quickly to demand fluctuations. Chicken is the most widely available organic meat in North America with a growing number of retailers selling it under their private labels.

Exceptionally high market growth rates are attracting new entrants in the organic meat industry. Natural and conventional meat companies are taking up high market share as they use their existing distribution networks to launch organic meats. In contrast, many dedicated organic meat companies are finding it difficult building supply chains from farmers to retailers because of supply problems. Indeed, the lack of distribution infrastructure makes direct marketing an important channel for many producers.

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