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China's Organic Food Market Grows Even as Consumer Confidence Wanes

Words by Akhila Vijayaraghavan
Energy & Environment

I'm always happy to read about eco-news and especially around the holidays, good news just seems to sound better. You would hardly think to associate China with organic food but that is exactly what is happening, with organic food gaining popularity within the country. According to an article in China Daily, one of the top growers and retailers of organic food in China, Lohao, has said that its sales revenue increased by about 30 percent last year.

This rate is expected to hold steady and they plan to open a directly managed store in Shanghai before March of next year. Organic food in China is three times more expensive than conventionally produced food but with the growing affluence of the middle-class, affordability is on the rise. 

The craze for organically grown food is so widespread that according to previous media reports, some residents in Shanghai are renting land on organic farms to grow their own vegetables and fruit. This, naturally, has started to attract many companies to the organic food sector. In 2010 alone, 345 companies obtained a certification from the China Organic Food Certification Center (COFCC). This was an increase of 18 percent from the previous year.

This growth in the organic food sector is, in part, spurred on by food safety issues. The 2008 milk scandal was perhaps the largest in recent history to draw attention to food safety protocols in the country. In spite of this, people are not convinced by organic labeling of food nor its authenticity. The Walmart organic pork scandal in China's Sichuan province has affected peoples's confidence in organic food.

As there is no over-arching regulation governing organic labeling, it is difficult for consumers to know what they are buying. There, the market is wide open for retailers, especially small retailers, to build credibility for themselves with customers. Online organic food retailer, Yihaodian, released a statement:

"We apply very strict rules in selecting organic food suppliers. They should provide several certifications including certificates issued by an authorized certification center and name the place of origin. We will visit the farm to inspect the complete process from growing to delivery to ensure they are qualified organic food suppliers."

The current scenario in China is very encouraging and conducive to organic farmers. Building customer confidence within the organic food market is now important for farmers, suppliers and retailers if the sector is going to grow at projected rates. With the biggest population in the world, increase in consumption of organic food in China will give a huge boost to worldwide production as well.

Akhila Vijayaraghavan

Akhila is the Founding Director of GreenDen Consultancy which is dedicated to offering business analysis, reporting and marketing solutions powered by sustainability and social responsibility. Based in the US, Europe, and India, the GreenDen's consultants share the best practices and innovation from around the globe to achieve real results. She has previously written about CSR and ethical consumption for Justmeans and hopes to put a fresh spin on things for this column. As an IEMA certified CSR practitioner, she hopes to highlight a new way of doing business. She believes that consumers have the immense power to change 'business as usual' through their choices. She is a Graduate in Molecular Biology from the University of Glasgow, UK and in Environmental Management and Law. In her free-time she is a voracious reader and enjoys photography, yoga, travelling and the great outdoors. She can be contacted via Twitter @aksvi and also http://www.thegreenden.net

Read more stories by Akhila Vijayaraghavan