Making organic food and beverage for everyone
Now worth over €40billion in Europe, the organic market has doubled in size over the last 10 years, with one in seven product launches now organic (source: Innova Organic Europe). This presents a huge opportunity for the food industry.
This growing trend has mainstream appeal in all applications, whether it’s baby food, bakery, dairy or ready meals. The organic food market in EMEA has experienced continuous growth in all categories, achieving a CAGR of over 5%.
So why has this once niche market segment that is now rapidly diversifying into new applications, experienced such growth and interest?
Traceability you can trust
In recent years and increasingly throughout the first half of 2020, concerns over food safety have heightened across the media and consumer mindsets. For manufacturers, this makes communicating and building trust with customers a top priority. As one of the most heavily regulated and consumer-driven food markets in Europe, organic food presents an opportunity to build consumer confidence.
An organic label is more than a claim, it offers meaningful value for consumers. The organic label represents ethical, closer to nature farming. Reassured by its regulatory standards and rules, its restricted use of pesticides and control of the use of non-organic ingredients, organic has a positive impact on changing buying habits and is now in the top three consumer claims. In fact, 51% of consumers would switch brands for an organic claim (source: Ingredion ATLAS consumer research 2019).
As consumers become increasingly savvier, they want to understand exactly what goes into their food, how it’s made and where it come from. Organic food delivers on transparency of sourcing, supply and formulation, which increases appeal to those consumers who are now spending more time in the kitchen, cooking and preparing homemade food.
In addition, organic food must go through rigorous regulatory compliance, which in turn brings peace of mind to consumers. When labelled as ‘organic’, this serves as assurance that products have been produced and stored in accordance with a strict set of standards. As such, they are perceived to be fresh and healthy and of the highest quality.
Consumers are now looking to food and beverage manufacturers to help them stay well. Nearly half of them claim to be eating healthier (46%), and 33% specifically, are eating and drinking natural or organic products (source: Innova Covid-19 Consumer Survey 2020).
Organic: a scalable option
Despite the demand for organic as a clear consumer trend, some manufacturers have been hesitant to explore and formulate products. Sourcing and surety of supply have been raised as concerns – as low volumes and inconsistent deliveries prevent future growth and planning. 48% of food manufacturers cited reliability and ingredient availability as their top supply chain priority in Ingredion’s ‘Mind the Innovation Gap’ report (source: Ingredion Mind the Innovation Gap, 2018).
We know that food manufacturers want a consistent volume of quality certified ingredients with uninterrupted delivery, and the supply chain has adapted rapidly to meet demand. In 2018, organic land increased by 1.25 million hectares – a growth of 8.7% – and now 15.6 million hectares of farmland are organic in Europe, making this a scalable solution. Organic farming and produce demonstrates sustainability and transparency across the whole supply chain, strengthening manufacturer messaging to consumers. Maintaining strong dialogue across the whole supply chain can help to strengthen understanding and maintain ability to manage supply in the long term.
New product development
Another factor prohibiting the mass growth of product development in this area regards formulation – and the need to balance functional ingredient placement when making an organic label claim across applications. In particular, maintaining taste and texture is a key (re)formulation challenge for 48% of manufacturers.
With one in two global consumers10 basing their buying decisions on taste and texture, developing organic food products with a great eating experience is essential. Manufacturers should seek our experts that can combine formulation know-how with process tolerant ingredients to offer texture and stability over shelf-life for successful organic recipe development.
For example, manufacturers can use organic functional starches to capture the increasing demand in the organic market. Derived from organic cereal and tuber bases, like waxy maize and tapioca, organic functional starches can withstand challenging processing conditions without compromising the eating experience that customers love.
Regulatory changes present fresh opportunities
But when it comes to ingredient selection, manufacturers looking to attract consumers who desire organic labels they can trust, will need to comply with the new EU regulations.
Under the new organic regulation11, now proposed to enter into force on the 1st January 2022, processed foods can still be labelled as organic provided that 95% of the agricultural ingredients are of organic origin/produced organically. The remaining ingredients will need to be on approved lists of process aids, food additives, and non-organic agricultural ingredients.
New lists on permitted food additives and process aids were published in Implementing Regulation (EU) 2019/2164 in December 2019, and these changes will be carried through to the new regulation. In addition, there is a proposal for a regulation restricting non-organic agricultural ingredients authorised for use in the production of processed organic food. Under this proposal, non-organic starch from rice and waxy maize will be removed from use in organic foods. Transition measures will apply to enable a phased approach to the changes. For non-organic agricultural ingredients, the new list comes into effect on 1st January 2023.
If manufacturers currently use waxy maize or rice-based starches in their organic products, they will need to reformulate to meet new regulations in order to continue labelling products as organic.
Manufacturers looking at new product development of reformulation of organic foods, should do so under the new regulations as a minimum. This will help to prevent any delays or needs to reformulate in the future, and ensure they are appealing to the most discerning consumers.
Download our new practical guide which details how the new regulations impact starch ingredients and provides examples to help you minimise the impact of the regulations go.ingredion.com/organic-regulations.
An opportunity ripe for development
With more and more consumers turning to vegan, plant-based or flexitarian diets, helping to fuel the growth of the organic sector, this represents a huge market and brand opportunity for the food industry. The organic market presents an opportunity there for the taking, but having the right ingredient solutions and technical expertise is crucial in order to capitalise on this.
Now is the time for the industry to make a real step-change in formulations, delivering truly organic products that tell a good food story. Speed-to-market will be essential, because with or without your products on the supermarket shelves, consumers will find a way to satisfy their needs. So now is the time to invest in this burgeoning market to get organic on every table.
Making organic food available to everyone