Last month, the Executive Officer of Amazon, Jeff Bezos, purchased the Whole Foods Market brand for $13.7 billion. The announcement naturally generated concerns about the future of grocery shopping, e-commerce, and methods of proper food delivery. However the latest concern surrounds Bezos’ challenge to maintain the organic food industry—a business that’s growing at a considerably high rate.
According to the Organic Trade Association, 5 per cent of food sales in the US are organic, which estimates to $47 billion in revenue. As the industry continues to grow, the future of organic food sales is estimated to double in the next few years—especially if Amazon offers lower prices than in-store grocery markets. As a result, Bezos is trying to acquire as much of the US farming market as possible to keep up with the predicted demand, a strategy that hasn’t been expanded despite the popularity of the industry.
While the demand for organic food is high, farms have relatively kept their size due to the government’s regulations concerning organic farming. For farmers who wish to run and produce fruits and vegetables on organic soil, the government requests a three-year farming plan to ensure that soil levels meet nutrient standards, crops are properly rotated, pest management and erosion are stable, and sanitation compliance is in effect. A quick transition to organic farming may cause financial setbacks during its early stages as it differs from non-organic farming management. Despite rigorous standards and many years of planning, Maggie Monast, a sustainable sourcing expert at the Environmental Defense fund, suggests that farmers might be willing to transition to organic farming with the escalating demand.
Generally the US imports their organic fruits and vegetables from overseas, however questions of fraudulent organic claims are a regular concern that could be reduced with homegrown farming. Although the focus is on American farmers and their soils, Canadian support might offer create an opportunity to produce more organic foods that meet Amazon’s demand while expanding the Canadian job market. According to an Agriculture report released by Statistics Canada in May 2012, the number of farms in Canada decreased but the number of organic farms increased across the country.
Bezos might face challenges in growing the organic landscape, but the industry looks promising across borders.
