Organic & Natural Foods ?Opportunities in Asia

DESPITE being slow to catch on, the Organic Food industry in Asia continues to expand, both in production and consumption. Organic & natural foods sections in supermarkets have seen huge growths in the last couple of years, with international stores like Wal-Mart, Carrefour and Tesco leading the way. Meanwhile, speciality stores selling only organic foods and beverages are also flourishing in large cities such as like Tokyo, Seoul, Shanghai, and Beijing. One of the biggest developments over the last few years has been the move by producer countries (e.g. China, Indonesia, Viet Nam) to encourage domestic consumption of organic foods as well as production. With the exception of Japan, organic food consumption in Asia has been limited to wealthier consumers in cities like Seoul and Shanghai. High prices, usually 10% to 50% above average conventional foods, contribute to this phenomenon. However, recent concerns over food safety have increased consumer interest in organic produce, which is seen as being both safer and healthier. In 2005, the banned food coloring Sudan 1 was discovered in KFC fast food outlets as well as in Heinz chilli sauces across China, initiating large public debate over the use of food additives and preservatives. According to Mintel China, food scares are driving more and more Asian consumers into purchasing all natural and organic foods despite their premium prices. Indeed, new product launches in organic foods and beverages in Asia experienced nearly 175% increase in 2007 (compared to a 90% rise in North America), in particular from Taiwan, China and South Korea. A close look at Mintel's Global New Product Database (GNPD) shows Non-alcoholic Beverages as the most active category, accounting for 22% of all new product introductions with an organic claim. Tea is the most popular application in countries where there is a long history of tea culture. In Japan, organic green tea beverages are fairly common, however, and last year saw Lawson launch Organic Jasmine Tea, an RTD tea drink made entirely with organically grown jasmine tea leaves, infused in natural mineral water. In China, Unif became the first company in 2007 to introduce an organic RTD tea beverage. In the same year, Yili, the dairy giant from Inner Mongolia followed, launching China's first organic milk "Classic" to the market. In South Korea, however, Juice is the most popular segment for organic drinks, with Lotte leading the way. While health remains the main driver for organic food purchase in Asia, concerns over intensive farming and the consequences to the wider environment are fast climbing in priority to consumers in Europe and North America. According to Mintel's GNPD, more and more organic food & beverages launched in Europe and America feature environmental friendly claims, highlighting not only the health aspects of organic formulations, but also their benefits (e.g. reduced carbon emission & pollution) to the environment Just recently, Nature's Path Foods in Canada introduced an organic berry cereal made with organic wheat meals, oats, flaxseeds and raspberries. It is flagged on pack that organic foods contribute to good ecology and result in less soil erosion, less groundwater pollution and improved farm biodiversity. The product also comes in an "EnviroBox" made form 100% recycled paper, and using 10% less packaging than regular cartons.

Thoughts for the Future

Following trends in North America and Europe, the market for Organic and Natural foods will continue to expand in Asia, with more countries focusing on domestic consumption of organic produce as well as production. As more companies enter and the market moves mainstream, prices of organic products are likely to adjust. However, inShop Women's Sneakers by Brand