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Funded by Saskatchewan Dept. of Agriculture and Food.
To investigate the market potential for organic foods in Canada; survey conducted between May and December 1990
- mail survey of producers (110), and 32 retailers (9 supermarkets),
- 23 food processors interviewed by phone
Of the retailers and processors, only some were actually involved in the organic market; results are not meant to be statistically valid, but do provide some indication of attitudes in the Canadian food industry
Retailers and processors expect slow growth until 2000 when the market will be about 10%, followed by faster growth taking the market to 25% by 2010.
Producers were more optimistic, expecting the market to expand to 20% by the end of century.
General agreement among respondants that by the turn of the century, government regulations and consumer pressure may put limitations on the use of fertilizers and other farm chemicals.
Many supermarkets tested organic and found the result dissappointing.
Expected that demand by small regional processors will create the intital stimulus for organic however, several of the national food manufactureres were actively exploring the addition of organic products to their product line.
Consumers see little rationale for purchasing organic products that may be three times the price of conventional; the term natural is confusing and misleading.
Supply and distribution channels are a major problem; continuity of supply a restraining factor.
Unlike surveys of consumers, the respondants did not believe that the consumer is overly concerned with chemicals and additives.
Retailers tended to believe that the appearance of organic foods needs to be improved, but this was not shared by processors.
Some disagreement among retailers versus processors on whether price or supply was limiting expansion of the market
Asked producers why farmers were adopting organic practices; general concern with the use of chemicals 33% concern regarding their own health and safety 29% concern for the environment 29% organic would be profitable 9%
consumers requested organic produce 29% their purpose is to promote health foods 29% had identified demand for organic produce 19% means to expand customer base 13% read about consumer demand for chemical free food 10% higher profit margins associated with organic 0%
Of these, 80% of supermarkets indicated that they were responding to consumer demand. Some expressed disappointment with the results of their introduction of organic products
From the 1989 COG directry of organic producers, and contacts in Saskatchewan:
The COG directory listed 255 producers, not all certified.
About 50% of respondants who produced wheat did so on 100 acres or more.
Of 18 vegetable producers, they produced on average under 5 acres.
A variety of livestock were reported: dairy, beef, pork, lamb, and poultry.
Average herd sizes of certified producers:
dairy 25 however, sample sizes are extremely small beef 38 so these are not representative in any sense pork 215 lamb 57 poultry 130
Grain producers tend to sell to elevators in Saskatchewan, while others tended to report that they were feeding grains to their own livestock.
Vegetable producers - most important outlets in declining importance:
direct through roadside, wholesalers, health food stores, independents, supermarkets.
Meat primarily sold direct to consumer.
Cost: asked to estimate their cost savings compared to conventional;
18% costs savings; yields were reported to be 6% below conventional.
About 40% reported either higher or equivalent yields compared to conventional, while 26% reported yields that were lower by 10% or more.
Majority reported increased sales.
Growth rates 11-20% for raw and primary processed products; 21-50% for processed products.
Supermarkets reported growth rates of less than 10%.
Processors - (13)
5 reported that they are processing organic products.
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