The Canada Organic Trade Association is pleased to release the first results from our national research on the Canadian organic market, the most comprehensive research to be conducted to date.
Canada’s organic market grew to $3.7 billion in 2012, with national sales of certified organic food and non-alcoholic beverages reaching $3 billion. The value of the Canadian organic food market has tripled since 2006, far outpacing the growth rate of other agri-food sectors. The sector is being driven by a diverse consumer base, with over half of all Canadians and two-thirds of British Columbians buying organic products every week.
Distinct Canadian Board, appoints two Canadian seats to OTA BoardRyan Benn, alive Magazine / TeldonDag Falck, Nature’s Path FoodsMike Fata, Manitoba Harvest Hemp Foods and OilsKelly Monaghan, consultant and chair of Canadian standards cmte.Lisa Mumm, Mumm’s Sprouting SeedsDwayne Smith, Grainworks Ltd.GuntaVitins, Resilient Solutions Consulting / Vitins Consulting Ian Walker, Left Coast Naturals
Funding has also been provided through the Organic Sector Development Program (OSDP), a $900,000 fund for the development of the BC organic sector. Funding for the OSDP comes from Agriculture and Agri-Food Canada’s Canadian Agricultural Adaptation Program (CAAP), which is delivered by the Investment Agriculture Foundation in British Columbia.
Consumer Research1555 Canadian residents age 25 and overBalanced and weighted on region, age and gender according to 2006 censusBritish Columbians are more likely to read labels on new products than Canadians overall; Two-thirds are willing to pay more for food that they knew is good for themselves and their family.British Columbians, overall, showed themselves to be more confident about the impact of their food choices on their health and the environment. While 41% of Canadians felt confused by changing definitions of “healthy” food, only 32% of British Columbians shared this sentiment. Similarly, 38% nationally reported it was hard to know what is good for the environment while only 31% of British Columbians agreed with this statement.
Because this research is 25+ it misses one of the segments identified in US research as a key demographic for organic purchases. The average age of the organic consumer has increased since 2006 when the majority of organic buyers had young families. The strong 45-54 segment in 2012 indicates these buyers have continued to choose organic products as their families mature.
When looking at the level of influence of and trust in claims that accompany food products BC consumers present some distinctive differences from Canadians overall. The level of influence of claims such as ‘made in Canada’, ‘local’, ‘certified organic’, and ‘non GMO’ are higher in BC; the influence of ‘natural’ or ‘all natural’ claims is lower. This, again, points to a more educated and savvy audience for organic products in BC. The level of influence of products certified organic by the Canadian organic program was nearly double the influence of a USDA organic certification. The level of trust in claims follow a similar pattern as the level of influence with ‘Made in Canada’, ‘local’, ‘free range’, and ‘Canada organic certified’ taking the top four slots of the most trusted claims. British Columbians have a slightly lower level of trust in ‘Made in Canada’ claims than the national average (87% vs. 89%) and a slightly higher level of trust in ‘Canada organic certified’ (81% vs. 78%) and ‘non GMO’ (67% vs. 62%). Natural claims have the lowest level of trust in BC, with only 51% of British Columbians reporting that they trust this claim in contrast to 58% of Canadians.
BC: 5% more Natural Believers, 3% more Usual Suspects and less Untouchables - Fitness First Skeptics in BC are more likely than average to buy organic groceries unlike FFS’s in the rest of the country who only have average purchasesNatural Believers (18%)Defining Attitudes Believe organics offer better nutrition and environment More concerned for environment than any other segment Very knowledgeable about NHP Very activeMost likely to say a positive outlook keeps them healthy On Spending: Most willing to spend more on food they know is good for them and their family (83% somewhat/strongly agree). Spend considerably more on vitamins/minerals, supplements, organic groceries, herbals/homeopathics, natural personal care and natural HH goods/cleaningIn an average six month period, Natural Believers spend more on groceries than the average Canadian and almost double on Organics. Just over a third say their organic purchases will increase over next year.Demographics: Found across all ages Skews more female More likely found in the city More educated than average• Reach them through independent natural retailers, organic grocers and high-end grocers. Fitness-First Skeptics (18%)•Very active; will fit in exercise whenever possible •Less likely to believe in NHP, but some still buy to aid their fitness•Less likely to spend on organic products Less likely to believe organics are better for you/more nutritious Fitness-First Skeptics spend the same on groceries and organics as Canadians overall.The Usual Suspects (21%) •Trying to keep their whole family healthy. •Convenience is critical; reach them at big box stores and via the Natural Believers •Likely to recommend NHP Their Defining Attitudes Overwhelmed by choices Believe organics are more nutritious and better for the environment Price-sensitive for organics and natural health products Looking for an easy solution Likely to recommend natural health products On Spending: Average spending on all NHP but more likely than average to ever buy NHP The Usual Suspects spend about the same on groceries and organics as Canadians overall. Demographics: Skews female Found across Canada More likely than average to be aged 25-44 More likely to have children Sold on the System (26%) •Believe it’s too late to become healthy •Less likely to have a positive outlook on health Their Defining Attitudes Less likely to believe eating properly is critical to good health More likely than average to say it’s hard to eat a healthy diet because the definition of “healthy” keeps changing Think it’s too late for any change they make now to result in better health Less likely to agree that having a positive outlook keeps them healthyMost likely to say health problems prevent them from exercising regularly More likely to take prescription medications but not worried about side effects On Spending: Spend less on average on supplements, herbals/homeopathics, natural personal care and natural HH goods/cleaning Spend the least per week on groceries Demographics: Slightly older, more likely than average to be over 65. Slightly more male Skews lower income More likely to rent their home than average The Untouchables (17%) Their Defining Attitudes Not likely to buy organics or natural health products on price Most likely to say it’s hard to know what’s good for the environment Less likely to say organic farming is better for the environmentMost likely to say people are too obsessed with their health.Most likely to say their genetics will determine how long they live Overwhelmed by choice Say the definition of healthy keeps changing Unlikely to read labels Far too “busy” to eat “healthy” Least knowledgeable about natural health productsOn Spending: Spend less than average on supplements and herbals/homeopathics and least of any segment on organics Lowest spending on natural/organic personal and cleaning productsThe Untouchables spend slightly more on groceries, but much less on organics than the average Canadian.Demographics: Least educated of all segments Skews slightly male Average income distribution found across Canada
2006 BC market share was 1.7% (national market share was 0.9% in 2006, in 2012 = 1.6%), BC continues to lead at 2.9% organic market shareSince Nielsen’s last comparable audit in 2008, the value of retail sales of organic products in Canada has grown at a compounded average rate of growth in excess of 9% annuallyThis significantly outpaces value growth of total grocery cash receipts, resulting in continuing share growth for organic foods in Canada
TL BC organic sales in major retail all categories: $159.1 MFreshveg: 42% of sales are pre-packaged salads/greensPre-packaged groceries: all scannable items excl eggs, dairy, bagged salads/greens (coffee, tofu, RTE cereal, etc.)- Made with organic ingredients (74-90%) = approx 9% of total
Nationally top 20 grocery categories account for ¾ of total sales BC differences: coffee is #4 nationally- soy is #2, milk is #3- snack foods are #14 nationally (#17 in bc) Cheese is #20 nationally
- Canadian products are capturing more value, volume comparisons put Canada at 39%/ US at 38%- Similar to national picture, but US is 4% less nationally. Primarily bc of Quebec where 49% is Canada, only 20% is US- Will be looking at fresh import dataCanada products include coffee roasted in Canada Canada: 60M- US 48M Not specified/unknown: ~19M Other 6.8 M
In 2006, estimated at ~10% (7% + CSAs (5% incl box delivery)Largest factor is the increase in farmers’ market sales in BC: 147% increase since 2006 - more markets, more shoppers, each shopper spending more- 2012 BC farmers’ market sales estimated at $13 MBased on BCFMA/UNBC research estimate that 40% of farmers’ market sales in BC are from certified organic farms
OverviewIntroduction • Market research objectives • Funders and collaboratorsConsumer research • Demographics • Spending patternsOrganic sales • The big picture • Trends by sectorOpportunitiesQ&A • Release details
Canada Organic TradeAssociation …active since 1985Missionpromote and protect the growth of organic trade to benefit theenvironment, farmers, the public and the economy.Membersgrowers, shippers, processors, certifiers, farmersassociations, distributors, importers, exporters, consultants, retailersand others.Activitiesall regulatory and policy aspects of the Canadian organic sector, firstresponders in media, raising public and government awareness.
Organic Market ResearchGoal: Support the growth and development of the organic sector bydemonstrating its value and potential.Provide accurate, up-to-date research to inform businessplanning, marketing efforts and sector support strategies.Research supported by:
Phase One: BC analysis BC Steering Committee GuntaVitins – Resilient Solutions Consulting/Vitins Consulting Ian Walker – Left Coast Naturals Rob Horricks – Blush Lane Organics Garth Owen – Organic Grocer Billy Potash – Nature’s First Fruit Results •National highlights • Detailed BC report
Majority of Canadians Choose Organic58% buy organic groceries weekly • 91% agree that eating properly is critical to staying healthy • 64% are willing to pay more food they know is good for themselves & families • Over half believe organic farming is better for a healthy environment • Nearly half believe organic products are more nutritious
BC: Organic Leaders 66% buy organic groceries weekly In BC, more than half: • Believe organic farming is better for a healthy environment • Believe organic products are more nutritious • Are trying to avoid GMOs
Local & Organic Are Top Influence of claim on likelihood to purchase Made in Canada Local Free range / grass fed Canada organic certifiedNon GMO, or non-genetically engineered Natural / All natural BC USDA organic certified Vegetarian National Gluten-free Lactose free Vegan Kosher 0% 20% 40% 60% 80% 100%
More Organic-Friendly Segments Canada BCNatural Believers The Usual Suspects Fitness First Skeptics Sold on the System The Untouchables
BC GrocerySpending Organic vs.Conventional Shoppers
The Where of Organic Buying Regular grocery storesNatural health stores/grocers Direct from farmer Mass retailers BC National Other Pharmacy/drug stores Online retailer 0% 10% 20% 30% 40% 50% 60% 70%
Growth Expected More consumers in BC expect to spend more next year Organic fruits and vegetablesOrganic/free range meat or poultry Organic breads and grains Organic dairy products Organic snack foods BC Other organic food and beverages National Organic packaged foods Functional foods and beverages Regular foods and beverages 0% 5% 10% 15% 20% 25% 30%
Estimated Value of Canadian OrganicSales, 2012 $3.7 B
Strong Growth Continues A tripling of mainstream retail sales in six yearsSTUDY (data year) MAINSTREAM MAINSTREAM TOTAL RETAIL RETAIL GROWTH MARKET ESTIMATEOACC (2006) $586.3 M - $1 BillionACNielsen data and primaryresearch by A. MaceyAAFC (2008) $643.2 M 7% $2 BillionACNielsen data annual growthCOTA (2012) $913.3 M 9% $3 BillionACNielsen data, Vision Critical annual growthdata, and primary research byS. MacKinnon
Imports vs. Domestic Organic pre-packaged grocery sales by country of origin National Grocery + Drug + Mass, 52 weeks ending Oct. 201250%45%40%35%30%25% Value20% Volume15%10%5%0% Canada USA Unknown Other Europe
Canadian Products Top BC sellers labeled as product of Canada ($ millions) National Grocery + Drug + Mass, 52 weeks ending Oct. 2012 COFFEE - ROAST & GROUND MILK YOGURT PRODUCTS BREAD - COMMERCIAL EGGS SOYA DRINKS RTE CEREALSJUICES & DRINKS - REFRIGERATED BABY FOOD BUTTER & DAIRY SPREADS SOUP PURE MAPLE SYRUPS $0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00
Natural Health & Foodservice Natural health maintaining market share • Sales growth remains in the double digits since 2008 • Companies in the sector are optimistic about future growth Importance of the incubators • More direct producer-relationships and lower volumes allows fostering of new, local & unique products • Act as trendsetters shaping wider tastes Organic coffee, shining star in foodservice • Most available organic product in foodservice • Distribution in single-site cafes and mass-market venues
BC Farmer Direct Sales Five-fold growth in six years Direct-to-consumer sales Estimated value Farmers’ market $45.5 M Farm gate (on farm sales) $17.7 M Community Supported $ 0.8 M Agriculture TOTAL $64.0 M
Growing Importance of Farmers’ MarketsBC farmers’ market vendors marketing strategies Number of farms reporting use of each channelFarmers Market Farm gate Restaurant Certified Organic Retail Natural Wholesale Conventional CSA Live Animals 0 20 40 60 80 100
Provincial Comparisons Strong organic share with room to grow • Impressive 40% of farmers’ market sales certified organic • Number of CSAs relatively low compared to ON & QC Organics still small percent • 10% of farmers’ market sales certified organic • 5X the CSAs in BC, but only 28% certified organic Best organic CSA program • 100 CSAs with $5 M total sales • 90% certified organic
Opportunities• Broaden & deepen the consumer market• Strengthening local, organic food systems• Embracing the incubator role• Support for scaling up• A focus on foodservice• Building a viable meat & poultry sector
Q&A Reports available • Canada’s Organic Market: National Highlights • The BC Organic Market: Growth, Trends & Opportunities • Detailed national report available September, 2013 Look for articles in • The Organic Reporter • BC Organic Grocer • Western Grocer • Canadian Grocer • Vancouver Sunwww.ota-canada.ca