Organic Milk Market Growth Expected to Dominate Worldwide by 2026
Market Dynamics of Organic Milk Market
Similar to all organic foods, the demand for organic milk is closely tied to the increasing consumer preference for naturally and organically grown products. This positive view of organics is due to several factors such as the perception of anything organic as healthy and pure, increasing care for environment and concern for farm animals. All these factors are crucial for the acceptance of organic milk products, thereby leading to the popularity of labels such as ‘grass-fed’ and ‘pasture-raised’.
Price is an important constraining factor for organic milk market as organic milk is almost thrice as costly as regular milk. This high difference limits the scope of the market only to urban and high-aware consumers.
The consumer shift towards organic dairy products is also influenced by the large scale food adulteration scandals that have occurred recently. For instance, the 2008 Chinese milk scandal wherein a large number of children were hospitalized due to an excessive amount of melamine in the milk and infant formulas, has led to a great number of regulations, import restrictions and price fluctuations in the market. Events such as these have increased consumer interest in what the animal is fed, how it is raised and processing methods.
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The regulatory aspects of the organic milk market are mostly centered on the use of the ‘organic’ label. The U.S. Department of Agriculture (USDA) requires that apart from the use of organic feed, cows should have access to fresh grass and spend at least four months a year grazing in pastures. The crucial aspect of organic milk market is a lack of use of synthetic hormones such as rBGH, a growth hormone given to almost 30% of the dairy cows in the US. These ingredients are considered very negatively by most consumers.
Market Segmentation of Organic Milk Market
The organic milk market is segmented on the basis of application, packaging type, distribution channel, and geography.
On the basis of application, the organic milk market is segmented as milk, dairy products and milk-based beverages and others. The majority of organic milk is consumed directly in the form of boiled milk, coffee, tea, and in cooking certain dishes at home. The use of organic milk is particularly increasing in households with kids due to extra concerns about food safety and health. The dairy products segment is further segmented into butter, cheese, desserts, and others. The dairy products segment is expected to gain market share with the growing consumer interest in healthy indulgent foods. Further these products are used in some bakery and confectionery good like milk toffies, bars and cakes and cookies.
On the basis of packaging type, the market can be segmented into pouches, cartons, bottles, and cans. The use of any specific packaging type depends on the end-purpose and use. For instance, pouches offer a relatively cheap way and easy way to pack milk and are therefore very popular in emerging nations such as India. Cartons are an important packaging type in terms of the longer shelf life and convenience. Bottles can be of both glass and plastic and are heavily used for packing milk and beverages. Cans are mainly used to transport heavy loads of organic milk and in the case of many dairy products.
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On the basis of distribution channels, the market is segmented into hypermarkets/supermarkets, convenience and grocery stores, specialty stores, the internet and direct selling. The use of internet limited in the case of organic milk market as the products are easily perishable. Hypermarkets and supermarkets occupy the dominant market share mainly because a significant number of organic products are concentrated in large stores. Direct selling in the form of home deliveries is also an important and growing distribution channel because such delivery systems usually source the organic milk from local sources thereby ensuring freshness and quality.
Regional Outlook of Organic Milk Market
The United States occupies the dominant market share in the organic milk market. The increasing consumer awareness about natural consumer goods and increase in the incidence of lifestyle conditions such as obesity. Europe is another very important region in the organic milk market due to the high-income levels, easy product accessibility and strict regulations against synthetic food ingredients. U.K is a major consumer of organic milk and also houses many producers and suppliers. Despite occupying small market share at the current time period, the organic milk market is expected to grow at a significant level in emerging nations such as India and Brazil. This is due to the increasing awareness levels and fears of food adulteration among consumers.
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Key Market Players in Organic Milk Market
Some of the key players in the organic milk market include Danone (WhiteWave Foods Company), Fonterra Co-operative Group Limited, Organic Valley, OMSCo (Organic Milk Suppliers Cooperative), Dairy Farmers of America Inc., Agropur Dairy Cooperative, Arla Foods Amba, Donegal Investment Group plc. , etc. among the others.
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