MONTEREY, Calif. - There is massive opportunity to expand the global supply and demand of organic produce, panelists said at the Organic Produce Summit on July 11.
In a session moderated by Jose Rossignoli, director of global sourcing, Robinson Fresh, panelists from South America and Europe gave their perspective on growth prospects.
Rossignoli said there are about 170 million acres of global organic farmland, up 21% from about 143 million acres in 2016. Global organic product sales were rated at more than $100 billion in retail sales in 2017, he said.
Global organic acreage has been growing by a double-digit percentage annually, he said. That is well above the 3% annual growth for global fresh food sales projected for the next five years, Rossignoli said.
“We can easily conclude that the trajectory of organics is quite good,” he said.
Currently, Australia accounts for about 51% of global organic farmland, while the U.S. now represents about 43% of global retail sales. However, Rossignoli said only about 0.6% of farm acreage in the U.S. is certified organic.
“When you consider the fact that less than 1% of conventional and organic fresh produce is traded (internationally), then it’s unlikely that the supply will meet the growing demand globally,” he said. “I see this as a massive opportunity for this group, and one that we as a collective organic industry have the ability to contribute to positively,” he said.
Looking ahead, Rossignoli said there are organic supply opportunities developing, with Latin America, Europe and Asia leading the way.
Ignacio Donoso, director of new business development and offshore offices at South American fruit exporter Verfrut, described the company’s venture into organic bananas in Peru.
Donoso said Verfrut is a large exporter of fruit from Chile and Peru and recently has sought to diversify by adding an organic banana program in Peru.
He noted that the company produces about 3,000 containers of grapes from Peru, mainly in the October through December marketing window. After the grape season is over, Verfrut has a large infrastructure and staff to support. The investment in organic bananas allowed some of those resources to be utilized 12 months a year.
Organic only represents about 2% of the company’s total sales now. The company has planted about 370 acres of bananas so far, equating to about 15 containers per week all year.
“We have been producing (bananas) for the last five months, so we are we are learning about the product itself - the banana for us is also very new,” he said. “The possibilities of growing organics in Peru are huge,” he said, noting low humidity, ample land availability and good water supply in growing regions. The company is considering opportunities to grow organic limes, organic blueberries, and organic lemons.
Kiko Claros, CEO of Spain-based Eurofresh, described the company deep history in organic production and its expanding global footprint of avocado production. Claros said both his father and grandfather grew organic avocados and their foundation of principles were instrumental in the creation of Eurofresh in 2001. The company specializes in organic avocados and has expanded beyond Spain to include supply from Morocco, Peru, Colombia, and the Dominican Republic. The company also has a distribution facility in the Netherlands.
Sourcing from various countries allows a better chance of stable supply, he said.
“We are controlling the entire value chain, which is quite important for us,” he said.
Marcos Echenique Walker, marketing director of Chile-based Copefrut, described the company’s consumer-centric approach to increasing organic fruit output.
Rossignoli said Copefrut started an organic project five years ago and today organics represent 10% of their output.
Echenique Walker said the 65-year old Copefrut company mainly grows apples, blueberries, stone fruits, and kiwifruit.
He said it was important to rethink the future of the Chilean fruit business in terms of what the consumer wants, rather than what the grower could produce.
“We are now making the decisions driven by what consumers are asking for, and what are their demands and expectations on our products,” he said. He said consumers want a tasty, high-quality piece of fruit but they also want to know about the practice behind how the fruit was produced.
The organic project at Copefrut was started five years ago as a concrete way of answering those questions,” he said.
And while the company had dabbled in organics in the early 2000s, he said the recent effort focused on selecting the best producing areas for organic fruit.
“We need to be able to bring the organic (fruit) at the same or even above the standard for conventional,” he said.
When evaluating the costs of growing organic fruit, Echenique Walker said the company is looking at the cost per kilo of packed fruit rather than the cost per hectare.
Panelists said the U.S., Europe, and Asia will experience demand growth for organic produce.
“I think (demand) is pretty much tied to the quality and to the consistency of the supply,” Donoso said.