WINNIPEG Canadas organic industry struggled over the last couple of years, with the volume of sales dropping for the first time in many years.

After a 41-day strike, workers at the Cargill Dunlop beef processing plant in Guelph will return to work Monday. 960

Fresh organic fruit, for instance, saw a 43 per cent decline in sale volumes from 2021 to 2023. Other categories of organic had more success, but COVID-19 and the post-pandemic period of high food prices has been a challenge, says the 2024 Organic Market Report from the Canadian Organic Trade Association (COTA).

Organic sales over all categories have seen a modest increase of one per cent (in value) since 2022. However, there has been a notable decrease in volume by six per cent, indicating the pervasive influence of inflation, says the report, which COTA released in late June.

The sales numbers arent great, but the data shows that Canadians are making different choices around organic food, says Tia Loftsgard, COTA executive director.

What the numbers indicate is that shoppers were finding other ways to purchase organic, swapping out fresh produce purchases for canned, dried or frozen options that have better shelf life, she said in an email.

As examples, sales volumes of frozen organic fruit jumped 78 per cent from 2021 to 2023 in Canada.

Pickled vegetable volumes climbed 22 per cent in the same period.

Certain categories are doing well, such as salty organic snacks, and the numbers show that organics share of the food and beverage market is climbing, although at a much slower pace:

From 2017-20, the organic share of the market (in dollars) went from 2.6 to 3.3 per cent, a gain of 0.7 per cent.

From 2020-23, organics market share climbed only 0.1 per cent, reaching 3.4 per cent in 2023.

In some positive news, organic sales reached $9.01 billion in 2023, which is an 11 per cent gain from 2020.

Unfortunately, most of that growth came from higher prices rather than from increased sales.

Many products exhibited an uptick in sales value from 2022-23, with a decline in volumes. This trend indicates that these products are being sold at higher prices for smaller quantities, COTA said.

Loftsgard pointed to data from SPINS, a U.S. market research firm, indicating that the gap between organic and conventional food prices has narrowed. That change should boost organic sales.

Inflation started coming down for all products in 2023, and the conclusion of the research firm is that organic prices did not experience as much price increases as non-organic, making organic products even more attractive as the price premium has decreased, she said.

The majority of the COTA report was directed at organic demand and market conditions, but it did briefly touch on organic production.

From 2020-22, acreage of certified organic farms declined 5.8 per cent in Canada.

The drop in acreage is nothing to worry about, Loftsgard said.

Market demand will keep organic production motivated to continue to grow organic ingredients for both domestic and international markets.

That may be true, but COTA and others in Canadas organic industry have been lobbying Ottawa for a formal program to support the organic industry. The program would, ideally, help increase organic acreage and provide a strong foundation, strategy and growth potential for the organic sector, COTA said in its report.

The feds have not announced such a program, but on June 27 Agriculture Canada did invest $2 million in the organic industry.

Ag Canada will provide COTA with $1.17 million to bolster Canadian organic exports and resolve market access issues.

As well, the feds are investing nearly $1 million in the Prairie Organic Development Fund

The goal of the project is to increase profitability, improve environmental outcomes and increase public trust in the Canadian organic agri-food industry, said Jim Robbins, president of the Prairie Organic Development Fund.

The funds will (make) an important contribution to growing organic supply and helping farmers adopt agronomic practices, making them more resilient to climate change.

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Demand continues to soften for organic food - The Western Producer