Economics and Competitiveness
The purpose of this project was to get a better picture of the organic industry in Alberta and Canada - from farm to fork. To accomplish this we looked at three areas: the Alberta producers and processors, the Canadian organic consumer, and a Canadian retail grocery snapshot.
All 240 certified organic producers and 41 processors in Alberta received a written survey.
A 65 percent response rate for producers and 78 percent for processors provided interesting insights, including:
Our look at the organic consumer consisted of unique Canadian polling. We found a growth rate of 5 percent for both heavy (23 percent) and light (27 percent) buyers of organic food over a five-year period. The presence of children in the household is an important element. Both heavy and light buyers are more likely to have children. Both categories of buyers are more likely to be female, but males 34-54 are also driving some of the growth behind the increase in heavy buyers. The Canadian organic consumer is basically secure, settled, and in the prime of life, probably with children – but really not that different from the mainstream. Health reasons continue to be a major driver and are seen as more important than environmental reasons. When asked where they purchased most of their organic food, the results showed that it was either a big (grocery 47 percent) or small (farmer direct 30 percent) venue with very little in between.
- Estimated total 2004 cash receipts for organic producers were $15.2 million. Estimated growth for 2005 was 14 percent.
- In Alberta, the main products are field crops and livestock. Alberta is home to the largest organic beef herd in Canada at 10,288 head. http://www.cog.ca/documents/certified_organic_production_2004_report.pdf
- While only 14 percent of the producers sold value added products, these products contributed 30 percent to the total cash receipts.
- 26 percent of the cash receipts were sold directly to a processor (most likely field crops), 23 percent sold directly to the consumer (most likely meat and vegetables).
- 40 percent of Alberta grown/raised product is sold in Alberta.
- Processing in the province consists mainly of meat processing and seed/grain cleaning.
The retail grocery snapshot is the first time quantifying the Canadian organic market using Canadian data. Using ACNielsen data, we learned that the value of organic food going through grocery alone in Canada for 2006 was about $412 million, which represents a 28 percent growth rate over 2005. Organic represents less than 1 percent of total food at grocery but has very impressive growth rates. Rate of growth for total grocery is usually between 2-4 percent. Alberta alone accounted for $48 million and had the highest growth rate in the country at 44 percent. The domestic market for organic food through all channels is estimated to be about $1 billion.
There are two streams reflective of where the consumer does the majority of their organic purchasing – big (grocery) or small (farm direct or regional). While each stream requires different approaches and degrees of coordination, both offer solid and viable avenues for sound Canadian organic businesses (producers and processors) to market their products. In order to meet the volume and consistency of grocery demand, however, a fairly high degree of coordination between many operators will be needed quickly. The growth potential exists; the challenge is how to capture it.
Click "Farm to Fork: Organics in Alberta" to view the report.