Food and Beverages Industry Overview

The organic food market consists of sales of organic food and beverages and related services. The production of organic food involves practices that promote ecological balance and aim to conserve biodiversity. These food products do not use any food additive or industrial solvent. The global organic food market is expected to grow from $193.6 billion in 2019 to $232.2 billion in 2020 at a compound annual growth rate (CAGR) of 20%. The growth of this market is mainly because as of now no immunization is available against COVID 19 and therefore people are getting attracted towards organic foods to improve their immunity. The market is then expected to recover and grow at a CAGR of 16.5% from 2021 and reach $366.5 billion in 2023. North America was the largest region in the organic food market in 2018. The organic food market in Asia Pacific is forecasted to register the highest CAGR during 2018-2023. Increasing health concerns due to growing number of chemical poisoning cases globally is acting as a driver in the organic food market. Consumers are becoming more health conscious owing to the harmful effects caused by the presence of chemical pesticides in food products. The toxicity of chemical pesticides in food products can cause cancer, hormone disruption and birth defects. According to an UN report published in the year 2017, around 200,000 people die every year due to toxic effects of pesticides in food products. This is causing consumers to shift their focus towards organic food products. Low shelf life of organic food and beverages compared to conventional foods and beverage products is restraining the organic food market. For instance, in a research conducted by MSNBC in 2018, it was reported that the shelf life of organic food product tends to be shorter than conventional produce. Similarly, some researchers found that many organic foods had higher levels of bacteria than conventional products that cause food to spoil. As organic food is not exposed to the similar amount of preservatives that of conventional food, organic food tends to be prone to bacteria attacks and has a shorter shelf life. For example, organic food products like turnip greens, mustard greens, and endive have a very short shelf life with shrinkage percentage of 50%. Thus, high packaging, logistics and distribution costs to increase shelf life is limiting the growth of the organic food market. Companies in the organic food market are focusing on introduction of new product categories and varieties. Organic food manufacturers are coming up with new and innovative organic food products in the form of ready-to-eat snacks, cookies, organic tea, pulses, spices, edible flowers, frozen waffles, medical plants, herbs and organic juices. For example, Lidl, an organic grocery chain is coming up with 28 new and innovative organic food products to choose from. Similarly, Nestle plans to launch new and innovative organic milk products in India. The organic food market is regulated by authorities such as the US Food and Drug Administration (FDA) and the European Food Safety Authority (EFSA) to ensure high quality standard of food product is maintained. For instance, EFSA oversees whether labelling is used to mislead consumer on the nutritive proportions of a product in the EU. EFSA performs occasional checks on the nutritional value to check whether correct labelling has been used or not. In order to maintain transparency and effectiveness, regulatory authorities have come up with strict food labelling regulations for the organic food market.

The milk substitutes (non-dairy milk) market consists of sales of milk substitutes. This industry includes establishments that produce milk substitutes such as soy milk, almond milk and rice milk. The global milk substitutes (non dairy milk) market is expected to grow from $19.8 billion in 2019 to $20.4 billion in 2020 at a compound annual growth rate (CAGR) of 3.5%. The low growth is mainly due to economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is then expected to recover and grow at a CAGR of 11% from 2021 and reach $27.9 billion in 2023. Asia Pacific was the largest region in the milk substitutes (non-dairy milk) market in 2018. This region is expected to remain the largest during the next five years and is forecasted to register the highest CAGR during 2018-2023. The increasing consumers’ preference for vegan food is driving the milk substitutes market. Consumers are increasingly becoming aware about animal abuse at dairy farms and are avoiding animal based products. Vegan milk is cholesterol-free, rich in vitamin D and proteins and provides more calcium than animal milk. According to a report by Mintel in 2017, sales of non-dairy milk in the USA grew 61% over the last five years. The rising shift towards veganism and health consciousness is driving the milk substitutes market. Presence of highly toxic arsenic compounds in rice milk is acting as a restraint on the milk substitutes market. Rice milk is made from rice that carries huge levels of arsenic, a highly toxic chemical which is dangerous for human health and may cause cancer. According to a journal on food additives & contaminants published in 2018, arsenic proportion in rice milk has a mean value of 63%, which is dangerous for human health. Non-dairy milk producing companies are increasingly focusing on improving the shelf life of their products. Companies are trying to decrease the rate of bacterial formation in non-dairy milk through bacterial clarification using separators intended to remove bacterial spores. Ultra-pasteurization involves heating milk to a temperature of more than 280°F for at least 2 seconds that will kill harmful bacteria and increases shelf life to up to 120 days. For instance, soymilk produced by SunOpta is processed using ultra-pasteurization and has an extended shelf life of 12 months. Also, ultra-pasteurized almond milk by Pacific Foods has a shelf life of about a year. Non-dairy milk producers are governed by various regulations related to product quality, labelling and others. For instance, in the EU, the Regulation (EU) No 1169/2011 was introduced to provide nutritional information about food products to consumers. According to the regulation, non-dairy milk producing companies have to adhere to different protocols pertaining to nutritional labelling, presentation, advertising of foodstuffs and the printed information must be of a minimum font size. The allergens (e.g. soy, nuts, gluten, and lactose) for prepacked foods should be clearly mentioned. For non-dairy products like milk substitutes, an indication of substitute ingredient should be clearly mentioned.

The coffee capsules market consists of sales of coffee capsules product and related services used to prepare instant and convenient coffee at restaurants, bar, homes and offices. Coffee capsule is a small cylindrical shaped container that contains coffee sealed with an aluminum foil. Coffee capsules contain fine ground coffee in a measured amount. Coffee capsules comes in different flavors and can be used with or without a coffee machine.

The dairy alternatives market consists of sales of dairy alternative products and related services. Dairy alternatives are food & beverages that are used as a substitute for dairy products. These products are extracted from plants including cereals (rice, oats), legumes (soy), seeds (hemp, flax), nuts (peanuts, almond), and other grains (teff, quinoa). The dairy milk alternatives include soy milk, rice milk, oat milk, coconut milk, and flaxseed milk, cheese substitutes comprise soft cheese and hard cheese, butter alternatives such as nut butter, coconut butter, vegetable oil blends, and cultured vegan butter.

The diabetic foods market consists of sales of diabetic foods and related services that are used in supermarkets and hypermarkets, stores or pharmacies, grocery stores, and online stores. Diabetic Food products are dietary products which include reduced carbohydrate content and sugar content that help regulate blood glucose increase. Diabetic Food also contains low calorie sweeteners, diet beverages, etc.

The gluten free food market consists of sales of gluten free food items and related services. Gluten is a group of proteins found in various grains including barley, wheat, and rye. The gluten free food items are consumed mostly by people with celiac disease or are allergic to gluten. Gluten free food comprises fruit & vegetable, meat, fish, potatoes, rice, lentils, and others. The benefits associated with the consumption of gluten free food includes weight loss, increased energy, and improved health.

The lactose-free food market consists of sales of lactose-free food and related services. Lactose is a sugar found in milk and food with ingredients including milk and whey. Lactose-free food is used as an alternative for dairy-free food items. Lactose-free dairy products contain an enzyme called lactase that helps in breaking down milk sugar galactose to avoid stomach problems such as abdominal cramping, gas, diarrhea, and bloating in people with lactose intolerance. Lactose-free food items include soya yogurts and cheeses, oat milk, rice milk, coconut-based yogurts and cheeses, carob bars, and food with “dairy-free” and “suitable for vegan” sings.

The organic bakery products manufacturing market consists of sales of organic bakery and related products. Organic bakery products are made using organic ingredients such as wheat gluten, milk, butter, honey, eggs, oils, starch, sugar, spices, raisins, cereals, grain flours and meat-based ingredients. To meet the requirements of organic certification the manufacturers produce organic bakery products as per the set guidelines of the food safety organizations of their respective countries.