May 25, 2006

Organic meat fast gaining popularity in the US

Organic meats are flying off the shelves in the US, where it has registered a 51 percent growth in 2005, becoming the fastest-growing sector in the US organic food industry.

Organic meat sales have expanded more than 150 percent since 2002 and the high growth rates are expected to continue as distribution channels increase.

Organic meats have been gaining popularity since mad cow disease made its debut in the US in 2003. Although the disease did not make a dent on beef sales, they have made consumers more inclined towards buying organic beef, thus leading to higher sales.

However, demand has outpaced supply, thus limiting the growth of the industry and leading to imports making its way into the US market from South America, Canada and Australia. Currently, supplies from these countries make up more than half the US organic meat market.

There has been a dearth of organic meat producers in the US due to high production costs, lack of slaughter facilities and underdeveloped distribution channels. Although growth has been accelerated since 2004, supply is not expected to catch up with demand for a number of years.

Even though organic beef is fast becoming popular, poultry still makes up the bulk of most organic meat sales volume due to its shorter production cycle and cheaper cost.

With high growth rates and profits beckoning, more producers are jumping onto the organic bandwagon.

Conventional meat companies, with their existing distribution channels, are fast gobbling up market share as they have an easier time delivering organic meats to retailers, as opposed to dedicated suppliers with their lack of infrastructure.