In 2020, organic packaged food has seen a rebound from the declines seen in the previous couple of years to see solid growth in retail volume terms. Meanwhile, double-digit growth has been seen in retail current value terms, as in addition to volume growth, prices have seen a significant increase.
Organic baby food has remained the largest category within organic packaged food in 2020, with organic milk formula achieving the highest sales and also seeing exceptional growth, maintaining the trend seen in the review period. Ever since the melamine milk formula scandal back in 2008, Chinese parents have been careful with the products they give their children, and are happy to spend more if necessary, aiming to give them the best products, leading to growing demand for organic options.
Unlike organic baby food, which was already seeing strong growth rates prior to COVID-19, organic dairy has turned from current value decline to growth in 2020, due to the better performance seen by organic milk. Increased attention to safety and high quality standards in light of the spread of COVID-19 has increased sales of organic milk, as has falling unit prices – the only organic packaged food category to see price declines.
Although in 2021 organic packaged food is set to see static retail volume sales, solid increases are expected for the rest of the forecast period, along with higher rates of current value growth due to constant price rises. The safety and quality of packaged food has become even more important due to COVID-19, and this is likely to endure in the forecast period, with organic packaged food therefore continuing to attract more consumers.
Organic milk formula is expected to maintain high growth due to the increasing number of players. With leading local and international brands investing due to the potential of organic milk formula, the category is expected to see further dynamic growth over the forecast period.
Although organic dairy is forecast to see a retail volume decline in 2021, offsetting the growth seen in 2020, the category is expected to return to strong growth over the following years. This is a better performance than seen in the review period, and therefore the category still offers potential for development.
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