Organic Beverages - US - October 2006

SCOPE AND THEMES
What you need to know
Definition
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Organic food and beverage sales double in 2001-06
National standards codify industry
Natural vs. organic
Concern about the safety of the food supply
Growth of organic herds and farmland
Organic market comprises two segments
International trade
Supply structure
FDM holds significant lead on home turf of natural channel
Price is a major issue for purchasers of organic foods
Organic shopping habits
Orange juice is top organic drink
Organic beverage market will continue to grow, with caveats
Still a niche market
Some strong growth drivers
Caveats
MARKET DRIVERS
Healthful living serves as market cornerstone
Figure 1: Opinions about organic food and drink: cost, health, and taste, July 2006
Figure 2: Attitudes regarding healthy eating, 2002-05
Demand for organic food and drink changes the face of the industry
Figure 3: Total organic acreage and animal herds, 2000-03
Evidence of organic dairy farming profitability trickles in
Organic beverages have stiff competition, remain a very small niche
Sales pale in comparison to conventional products
Usage penetration among consumers very low
Some players concede market as niche…
…while others enter the market
Discerning between organic and natural products a difficult proposition
Figure 4: Criteria for purchasing organic beverages, July 2006
Issues specific to milk
Food fear, historically a positive driver, shows its fangs
E. coli
Mad-cow disease
Avian flu
MARKET SIZE AND TRENDS
 MARKET SIZE
Figure 5: Total U.S. retail sales of organic beverages, at current and constant prices, 2001-06
Total food and beverage sales through all channels (OTA)
Figure 6: Total U.S. retail sales of organic food, at current and constant prices, 2000-05
Wal-Mart sales
 MARKET TRENDS AND NEW PRODUCT DEVELOPMENT
New product launches
Figure 7: New organic beverage product launches, 2001-06
Organic and natural positioning in retail and foodservice channels
Figure 8: Natural and organic positioning: GNPD and Menu Insights trends, 2004-06 (January-August)
MARKET SEGMENTATION
Overview
Figure 9: Sales of organic beverage market, by type, 2004 and 2006
Organic non-dairy beverages
Figure 10: Sales of organic non-dairy beverages, at current and constant prices, 2001-06
Organic dairy beverages
Figure 11: Sales of organic dairy beverages, at current and constant prices, 2001-06
SUPPLY STRUCTURE
 FOREIGN TRADE
Exports
Imports
Balance of trade
 COMPANIES AND BRANDS
Organic non-dairy beverages
Figure 12: Leading brands of organic non-dairy beverages, 2004 and 2006
Organic dairy beverages
Figure 13: Leading brands of organic dairy beverages, 2004 and 2006
Private label
 PROFILES OF MAJOR MANUFACTURERS
The Dannon Company, Inc. (Stonyfield Farm)
Dean Foods (Silk, Horizon)
Hain Celestial Group (Imagine Foods, Westbrae)
Organic Valley
RETAIL DISTRIBUTION
Introduction
Figure 14: U.S. retail sales of organic beverages, by channel, 2004 and 2006
FDM
Figure 15: FDM sales of organic beverages, at current and constant prices, 2003-06
Natural food stores
Figure 16: Natural food store sales of organic beverages, at current and constant prices, 2003-06
THE CONSUMER
Introduction
Summary
Purchase of organic products
Figure 17: Purchase of organic food and beverage products, by gender, age, household income, race/Hispanic origin and region, July 2006
Opinions about food safety
Figure 18: Level of concern about food safety, July 2006
Figure 19: Concern about genetic modification of food, by gender and race/Hispanic origin, July 2006
Opinions about organic food and drink
Figure 20: Opinions about organic food and drink, by gender, July 2006
Figure 21: Opinions about organic food and drink, by age, July 2006
What “organic” means to respondents who buy such products
Figure 22: Definition of “organic,” July 2006
Where organic products are purchased
Figure 23: Purchase venues for organic foods and beverages, July 2006
Frequency of purchasing organics
Figure 24: Frequency of purchase of organic food and drink, July 2006
Opinions concerning price and availability of organic products
Figure 25: Opinions about price and availablity of organic food and drink, July 2006
Types of organic drinks purchased in past year
Figure 26: Types of organic beverages purchased in past year, July 2006
Figure 27: Types of organic beverages purchased in past year, by gender, July 2006
Figure 28: Types of organic beverages purchased in past year, by income, July 2006
Branded vs. store-brand organic beverages
Figure 29: Branded and store-branded organic beverages purchased, July 2006
What respondents look for when purchasing organic beverages
Figure 30: Criteria for purchasing organic beverages, July 2006
Motivations for trying new beverages
Figure 31: Motivations for trying new organic beverages, July 2006
Reasons for using organic milk
Figure 32: Reasons for buying organic milk, July 2006
FUTURE AND FORECAST
 FUTURE TRENDS
The growing market for organic products
Reducing prices could propel market past the tipping point
Hispanics an important growth demographic
Figure 33: Population, by race and Hispanic origin, 2006 and 2011
Increased retail distribution & advertising and promotion a key to growth
Retail distribution
Advertising and promotion
Concern for the safety of the food supply
 MARKET FORECAST
Organic beverages
Figure 34: Forecast of total U.S. sales of organic beverages, at current and constant prices, 2006-11
Organic non-dairy beverages
Figure 35: Forecast of U.S. sales of organic non-dairy beverages, at current and constant prices, 2006-11
Organic dairy beverages
Figure 36: Forecast of U.S. sales of organic dairy beverages, at current and constant prices, 2006-11
Forecast factors
APPENDIX: TRADE ASSOCIATIONS
APPENDIX: NEW PRODUCT BRIEFS