Organic Market
October 23rd, 2006
No wonder I’m such a hippie.
The European organic market is significantly more mature than the US market, with 3.4% of its farmland certified organic. Top country on that list? Austria, with 9.7%. After that it’s Sweden, Greece, and Denmark. In contrast the US has… get this… 0.2% organic farmland. Mind you, it’s growing at 20+% a year, and there’s significant consolidation going on in the sector (actual acerage is three times as much as austria, with half as many actual operators). From trends I see in europe and some analyst reports, it seems like we’re going to see that growth rate in America increase for at least another 5 years, and then eventually settle do a more respectable 7% annual….
…and remember, there’s a finite amount of cropland in the US. 442,120,449 (average) acres, of which we’re looking at a 30% fallow rate.
Anyway- total EU vs. USA is 5M vs. 800K acres, but the market sizes are 13B vs. 10.3B. This is likely because the EU has 17 times the operators(134K vs 8K), leading to strong diseconomies of scale. But it also gives us a good idea of where the rediculously large markup we’re seeing in the US (100%+ per channel point) will move in the not-so-distant future.
More discoveries as I come across them. Or I might just post the paper.
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