The demand for organic foods

Generating an accurate picture of the international organic sector accurately is hampered 

Before concluding, however, that retail price premiums alone will ensure that organics never grows beyond its status as a lucrative niche market, additional points need to be considered. 

it is impossible to predict the impact that future events and technological developments will have on consumer trust, or distrust, in conventional food production and regulatory systems. Another mad cow crisis may well see perceptions regarding the acceptability of different price premiums revised upwards. Conversely, serious organic food scares may challenge perceptions that organic foods offer a safe alternative. 

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Is there room to expand the demand for organic food since potential demand still seems large even though aetual demand does not grow accordingly ... 

Two major trends in the industrialised world are the demand for convenience food and awareness of the need for healthy eating patterns. The trend is away from generic foods towards processed products, for example, as we have seen, there is a growing demand for organic frozen desserts and items such as frozen pizzas. Many supermarkets see a potential for surplus products in freezing and canning surplus produce (FAO, 2002). The popularity of functional or healthy foods is also a potentially lucrative area for organic produce, especially dairy products. 

Wier M and Smed S (2000) Reported in Wier and Calverley, Modeling demand for organic foods , paper presented at The 13th International Scientific IFOAM Conference, Basel, Switzerland. 

Only where all of these approaches are used is there likely to be the chance of convincing consumers that they are protected against unsafe levels of pesticides in food. Many consumers have now been influenced by the media to think that all residues of pesticides in food are unsafe. This has contributed to the growth in demand for organic food. 

Evidence supports the hypothesis that potential demand for organic food is much higher than the currently realised demand. The obstacles to realising higher demand have been identified clearly. Obviously, this claim neglects the fact that consumers are not forced to buy organic products but are free to choose organic or conventional products. 

Demand for organic food is prohahly the single most important variahle for the future of organic farming. In the current situation, actual demand for organic food does not fully realise its potential for a number of reasons. The crucial obstacle to the full realisation of potential demand is lack of transparency in the market from the viewpoint of the consumer. In most countries, consumers encounter a variety of labels. This is very confusing and also impedes free trade between the countries of the EU. 

In order to avoid this sector crisis, an unexplored product differentiation strategy for Italian sea-fish farmers could be certified organic marine fish, taking into account the increasing demand for organic food. 

On the price issue, it seems that the actual price is less important than the relative price level in respect with the conventionally grown product, and income elasticity of demand for organic foods is generally small. 

Tregear, A., Dent, J.B., McGregor, M.J. (1994) The demand for organically-grown produce. British Food Journal % (4), 21-25. 

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