North American organic coffee posts surprise growth in 2008

NEW YORK Tue Jul 21, 2009 3:03pm EDT

NEW YORK (Reuters) - Organic coffee imports to the United States and Canada posted a surprise 12 percent volume increase in 2008 year-on-year because of health consciousness and customer habit, the North American Organic Coffee Industry Survey said on Tuesday.

Despite one of the worst economic crises since the Great Depression, North America last year imported 89 million lbs of organic coffee, or $1.3 billion, said Daniele Giovannucci, the Philadelphia-based industry consultant who conducted the survey.

"We were looking for a potential disaster. These certified coffees, like organic and fair trade and such are higher-priced typically," Giovannucci said at a presentation in New York. "So, in a recession, what would you think would happen?"

"Much to our surprise, quite the opposite happens," said Giovannucci, a former senior World Bank consultant.

Organic coffee ranked the highest in dollar value among all organic products shipped to North America last year, and it accounted for one-third of all U.S. organic beverage sales, the survey said.

Consumers favor organic coffee, which is grown with minimal damage to the environment while avoiding toxic chemicals, for various reasons, including their cause to support sustainable farming and personal health choices.

Giovannucci said that organic coffee sales were resilient to economic head wind last year because the industry was able to thrive on the idea of food safety.

"People relate to organics and certified foods as being more safe," he said.

In addition, organic coffee drinkers tended to have a more steady buying pattern regardless of economic factors.

"People will give up other things, or may trade down from best quality to medium quality, but there is certainly a strong loyalty to certification," Giovannucci said.

Also, the premiums paid to organic coffee producers held steady last year despite lower green coffee prices. Other certification labels such as "fair trade," which typically refers to paying farmers at a reasonable minimum price, also posted growth in 2008, Giovannucci said.

Peru, Ethiopia, Brazil and Mexico are among the top suppliers of organic coffee, the survey showed.

Yet, Giovannucci forecast that organic coffee growth for next year to widely range from 4.5 percent to 15 percent. He said that the estimates from the importers tended to be conservative and they often underestimated growth.

(Reporting by Frank Tang; Editing by Lisa Shumaker)

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