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European organic chicken sales likely to swell through 2028

The organic chicken market is likely to witness a notable shift from traditional selling to chain stores and online selling channels.

4 May 2019, at 12:00am

Manufacturers can leverage the strength of retail chain stores to establish brand visibility in a bid to enhance sales. Moreover, online stores are also expected to gain significant traction as manufactures tap into remote consumers and enhance their sales funnel. A study revealed that the sales of organic chicken via chain stores are likely to grow at a compound annual growth rare (CAGR) of 14.7 percent in terms of value during the forecast period, 2018-2028. However, sales of organic chicken through direct sales are estimated to surpass other channels, said the report.

Demand for organic chicken is likely to spearhead across various countries on the back of increasing demand for organic food products as opposed to traditional products. This study predicted that the sales of organic chicken worldwide is likely to reach over USD$7.5 billion by the end of 2028 with increasing demand from emerging countries.

Sales of organic chicken are expected to remain concentrated in the developed countries of Europe closely followed by the emerging economies of the Asian Pacific excluding Japan (APEJ), physical fitness being a common and key aspect observed in these regions. A strong fitness industry in Europe is likely to present potential opportunities with rising participation in fitness clubs. For instance, according to IHRSA, in 2017 the European health club market served around 56 million members with fitness clubs generating more than USD$29 billion. This has translated into increasing demand for high protein natural food products such as organic chicken, in turn boosting its market’s growth in Europe.

Likewise, APEJ, largely driven by the Fitness 2.0 trend, has witnessed a growing inclination toward pure protein sources, consequently fuelling demand for organic chicken, which is projected to expand at a rate of 10.3 percent, particularly in China, Australia and New Zealand said the report.

Demand for organic chicken from household and residential buyers is expected to swell at a significant rate, making them a lucrative market. Growing household sizes worldwide has played a vital role in pushing sales of organic chicken. For instance, according to the Office of National Statistics in the United Kingdom, 2017 reflected a 15 percent increase in households. Likewise, the number of households in the United States crossed 126 million in 2017, as per the analysis of United States Census Bureau. Moreover, rising purchasing power parity is expected to complement the growing sales of organic chicken in these countries. Furthermore, growth of the organic chicken market is also influenced by significant demand from the hotel, restaurant and cafe (HoReCa) sector, albeit at a relatively lower base.

High prices associated with organic chicken production is likely to remain a confining factor restricting the growth in sales. Organic chicken production is carried out under strict guidelines provided by regulatory bodies including the USDA (US Department of Agriculture). Regulations such as 100 percent organic feed for poultry, the prohibition on the use of antibiotics and other growth enhancers for instance, steroids, have resulted in high prices of organic chicken. For example, according to the USDA, traditional boneless chicken breasts are priced at USD$2.5 per pound whereas their organic counterparts are priced at around USD$7 per pound, which is expected to confine its sales. In addition to high prices, several fraud cases have been registered, which is expected to hinder the growth of the organic chicken market.

The shift from free-range to confined poultry operations has been witnessed in the organic chicken market. Confined poultry operations facilitate a robust bio-security level on the back of zero contact between chickens and other animals. This can significantly reduce the probability of acquired diseases and physical injuries, consequently favoring organic chicken health. The movement toward confined poultry activities is expected to provide potential avenues for producers of organic chicken in the coming years.

These insights are based on the Organic Chicken Market report by Fact.MR