Organic Packaged Food in Canada

PROSPECTS

Organic movement gathers momentum after receiving broad-based support

Organic packaged food recorded another year of solid growth in 2018 following consistent strong expansion for over a decade, with no signs of a slowdown likely. The drivers behind the organic movement are multi-fold.

Accelerated conversion to organic across a number of categories

The enthusiasm among consumers for organic packaged food has been met in kind by manufacturers and retailers. Over 2018, active new product development and widening distribution led to further enhanced accessibility and affordability of organic packaged food.

Organic concept expands into a wider space in packaged food

In other markets, organic products have started to make inroads. For instance, in nuts, seeds and trail mixes, the Prana brand has significantly expanded its product line-up, primarily organic, and retail distribution in 2018, while the Jelly Belly brand launched organic Jelly Beans in the stagnating sugar confectionery category.

COMPETITIVE LANDSCAPE

Agropur retains its lead in an increasingly fragmented category

The organic packaged food category remained largely fragmented over 2018. Along with Agropur, Loblaw continued to lead thanks to its stronghold in organic dairy, which accounts for a substantial share of the total organic packaged food category.

Organic presents growth opportunities for smaller, niche players

While major players in packaged food are gradually embracing the organic movement, organic presents particularly valuable opportunities for smaller, niche players. This is because it is more challenging for leading players to build “organic credentials” among consumers.

Higher unit prices continue to stifle the evolution of organic packaged food

Despite the opportunities organic packaged food presents to industry players as well as retailers and their private label offerings, manufacturers need to invest significant amounts of capital and time to qualify for organic product certification for their organic products. As such, they are likely to continue to appeal to a niche audience comprised of the most avidly health conscious or wealthiest consumers who are willing or able to prioritise organic credentials and product quality over price.

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