The European organic meat products market is highly concentrated with about 15 companies having a significant presence. Conventional meat companies are dominating most country markets and they have entered the organic sector either via directly supplying organic meat products or via acquiring dedicated organic meat companies.
One reason for this is that organic meat supplies have been falling short of demand, and this encouraged many meat producers in Europe to convert to organic production methods, says the report. This means that large organic meat volumes have come into a market that is showing slowing growth rates.
European sales of organic meat products market were increasing at over 20 per cent per annum since 1998 - however market growth is projected to slow to 9.5 per cent this year.
Organic meat suppliers in countries like Denmark and Austria are attempting to alleviate excess capacity to export markets, though opportunities are drying up as more countries become self-sufficient in terms of organic meat supplies. The German and British markets were the traditional targets of organic meat exporters and both countries have started to experience oversupplies.
In spite of revenues falling by almost a quarter in 2002, the Research and Markets report finds that the German market remains the largest in Europe. Organic meat sales fell sharply in the middle of last year due to a food scandal involving organic grains. Consumer confidence in organic meat products is returning and positive growth is being observed again this year.
The Italian and British markets reported the highest growth in recent years. There has been a large rise in organic meat production in the UK and this is causing retailers to substitute imports with domestic products. The Italian market remains undersupplied and organic meat imports continue from a number of countries.
The most important sales channel for organic meat products are the supermarkets, which had a 51 per cent market share in 2002. Although most sales are from the supermarkets, the specialist retailers remain important sales channels in many countries. Organic food shops and butchers account for most organic meat sales in the German and Italian markets.
The organic beef segment accounts for most revenues in the European organic meat products market. The BSE crisis and the relatively low price premium are factors behind the high popularity of organic beef with consumers. The high cost of organic grains is responsible for organic pork and organic poultry to have the highest price premium and this hinders consumer demand in some countries.
The study follows another recent Research and Markets report that links high market growth for the organic meat sector in North America with consumer fears over food safety. Organic products are perceived to be healthier than non-organic meats.
According to this survey, the Canadian organic meat market expanded by 35 per cent in 2003 because of the BSE scare, and the US market is expected to show similarly high growth in 2004.
The report was carried out against the context of growing concern among Americans over where their food comes from. FoodProductionDaily.com reported yesterday that a Californian consumer group has been calling for beef sold in the state to carry country-of-origin labels, claiming that supermarket giant Safeway has been selling unlabelled beef from Canada.
A feeding practice linked to mad cow disease has not been banned in Canada, which has helped to heighten fears over the safety of the food supply chain. If the legislation becomes law, California would join three other states in requiring country of origin labels for beef.
However, another likely factor in the popularity of organic meat is the North American obsession with diet. The popularity of low-carb regimes has resulted in strong meat sales in general.
"The Atkins diet has had a huge effect on meat demand in North America," Jim Long, meat analyst and CEO of genetics company Genesus told FoodProductionDaily.com. "Meat is a good source of protein, and this has been identified as a good thing. And in North America, meat protein is also relatively cheap compared to the rest of the world."
As a result, there has been no decrease in consumption. "Avian flu has not affected sales," said Long. "Chicken prices in the US are higher than ever before. In July 2003 - after the BSE outbreak - beef consumption in Canada was 60 per cent higher per capita than the year before."