Sector report: Strong trends support growth of the natural products sector
The demand for natural products is expected to grow globally. Natural raw materials are expected to generate significant business activities because their economic potential has not yet been fully realised.
The turnover of companies in the natural products sector and companies utilising natural products in their business decreased slightly in 2020 compared to the previous year. These are the conclusions of the sector report on the natural products sector published by the Ministry of Economic Affairs and Employment on 8 December 2021.
“The growth of the natural products sector both in Finland and internationally is based on growing trends, such as organic origin, responsibility, safety, ecology, health promotion, and the Nordic and Arctic origin. The coronavirus pandemic has strengthened trends related to the growth of the natural products sector. The interest in the nature’s effect on health and wellbeing makes natural products and nature tourism destinations more attractive,” says Sirkku Wacklin, Sector Manager at Ostrobothnia’s ELY Centre.
There are approximately 770 companies operating in the natural products sector with a total turnover of EUR 780 million in 2020. More than 70 per cent of the companies in the sector are micro-sized companies that mostly employ between one and five people. The combined turnover of companies in the natural products sector and those utilising natural products in their business increased until 2019, but it fell slightly in 2020 amid the coronavirus epidemic. The decline was caused in particular by a lower turnover of tourism companies and providers of wellbeing services and products.
Approximately 2,700 people work in natural product companies. Foreign pickers of natural products also constitute a significant part of the sector’s workforce. In recent years, the number of foreign pickers has varied between 2,500 and 4,300. Companies in the berry sector are highly dependent on foreign labour, because foreign pickers pick 80–90 per cent of the berries for companies engaged in wild berry trade. The new Act on the legal status of foreigners picking natural products reduces the risk of exploitation and creates a more equal competitive environment for companies.
Growth in the natural products sector is restricted by availability and consistent quality of raw materials. Finland’s strengths as a producer of natural products lie in extensive picking areas, excellent nutritional value of raw materials and the reliability of origin and supply. Digitalisation and the platform economy enable new types of networking and business. Being organic is a way to create added value for natural products.
The natural products sector refers to activities related to wild berries, mushrooms, herbs and other natural products, such as the recovery of raw materials from nature and their further processing and trade. Entrepreneurship in the natural products sector can be carried out, for example, in raw material production and the food sector. Other important sectors for companies include the use of natural valuable substances, i.e. chemical compounds in the wellness, cosmetics, pharmaceutical and chemical industries and the tourism sector. The natural products sector also includes training, advisory services, development work and research.
Business Sector Services are expert services provided by the Ministry of Economic Affairs and Employment that collate, analyse and distribute information about the operating environment for companies and the development of sectors.
Sirkku Wacklin, Sector Manager, ELY Centre for Ostrobothnia, tel. +358 295 028 642 and email: [email protected]
Petri Koskela, Senior Specialist, Ministry of Agriculture and Forestry, tel. +358 295 162 382 and email: [email protected]
Katri Lehtonen, Development Director, Ministry of Economic Affairs and Employment, tel. +358 295 064 926 and email: firstname.lastnam[email protected]