A rise in ethical consumerism is spiking demand for organic and fair trade fresh produce in Europe. New research by Organic Monitor (www.organicmonitor.com) shows that sales of ethical fruit & vegetables surpassed the EUR 5 billion mark for the first time in 2007.
Fairtrade fruit & vegetables are reporting the highest growth, with sales expanding by 92% last year. High growth is occurring as a number of European supermarkets make fairtrade commitments. Most developments have been in the UK where Sainsbury’s and Waitrose converted their entire banana supply to fairtrade in 2007. A quarter of all bananas are now certified fairtrade in the UK, the highest market share for any EU country.
The new report on the European Market for Ethical Fruit & Vegetables finds that organic and fairtrade products have made most inroads in northern European countries. Over 5% of all fresh produce sold in countries like the UK, Germany and Finland is now certified organic and / or fair trade. Switzerland is the frontrunner where the market share has already exceeded 10%.
In spite of fair trade products making great strides, organic products comprise most revenues in the European ethical fresh produce market. Organic vegetables are the largest category, valued at EUR 2.5 billion in 2007. However, organic fruit sales are predicted to eclipse organic vegetable sales as more tropical and exotic varieties are introduced.
The organic fresh produce industry continues to be dogged by supply shortages. The study finds that European retailers are developing global supply chains to ensure continuous supply of organic fruits & vegetables. European organic food production is not keeping pace with demand. Indeed, several European countries are reporting declining areas of organic farmland. Rising prices of agricultural products are discouraging farmers to convert to organic practices.
Supply-demand imbalances are expected to continue as consumer demand for ethical & ecological products rises. Fairtrade products are becoming popular as consumers believe product purchases have a direct impact on third world poverty. Motives for organic fruit & vegetables are broader, encompassing health, nutrition and ecological issues. Organic Monitor projects the market for organic and fair trade fresh produce to double in the coming years.
A major challenge the industry faces is low consumer understanding of eco-labels. Although certified fairtrade and organic products have clearly visible symbols and logos, consumers are getting confused as to what the eco-labels mean and the differences between them. The market for fairtrade products is also suffering from a lack of standards; a relatively low number of fruits & vegetables have fairtrade standards. Retailers and traders aim to expand product ranges, however limited product lines prevent them from doing so.