Article used by permission by Warren Beaumont, publisher of Fresh Natural and Organic News
New research released by the Biological Farmers Association of Australia (BFA) showed farm-gate organic sales in Australia grew by 80 per cent since 2004, with the industry breaking through a $0.5Bn retail value mark for the first time.
The research was published in the Australian Organic Market Report 2008, and found that the organics sector is showing strong patterns of sustained growth. Total retail value in Australia has reached approximately $623 million, and unprecedented mark, the report said.
“Despite the fact that the organic industry at this point commands a relatively small percentage of total market value (less than 1%), it represents significant opportunity as an expanding niche market for operators committed to consistent delivery of high quality product.”
According to the Report, with the entry of major supermarkets including Coles, Woolworths, Aldi and IGA into the organic market, demand for organic products has reached a new level of acceleration, with over 500 organic lines now ranged in some larger stores.
The ability of the developing domestic production to meet this demand continues to be a key challenge for the future of the Australian organic industry with recent growth underwritten by a significant rise in important organic grocery lines and processing ingredients, the report said.Organic farm gate value has grown over 80 per cent in four years, with some sectors contracting (mostly drought driven, particularly in the organic grains and meat sector) while others have developed considerably. The organic industry is consolidating and the average size of organic farms has increased, highlighting a trend towards professional farming at a larger scale (albeit still well under non-organic farm enterprise levels for most sectors). Challenges continue to be observed in co-ordinating organic production and supply chains. Production of beef cattle has been a significant success story for the organic sector representing one-seventh of total industry farm gate value. Despite this, one-third of organic beef was delivered into the non-organic conventional markets and has not been included in current (value) organic market estimates. At the same time, processors continue to claim lack of access to consistent quality product in demand, including beef and lamb.
The report said that poultry meat and egg operators have experienced steady growth and almost all products are sold as certified organic. Production has been slightly sensitive to rising feed costs with the organic monogastric sector reliant on certified organic feeds. Horticulture remains a major part of the industry. Some two-thirds of organic farmers form part of this sector which represents over one third and possibly up to half of the total organic farm gate value in Australia, the report said. Fresh produce remains the first entry point for the majority of first time organic consumers and is a major component of the organic shopping basket. Organic dairy products show significant future promise within the Australian market place as well as for export, while organic honey is a growing sector, with Australia’s natural competitive production advantages.
Looking at organic consumers, the report said organic consumption continues to increase as acceptance grows amongst traditionally conventional produce buyers. Forty per cent of consumers surveyed purchase organic food at least occasionally, and women are the primary purchasers, the report said.
Organic fruits and vegetables are the most commonly purchased organic products. They are most likely to be trialed by new or experiential organic consumers and 70 per cent of organic consumers buy from these categories at least once a week.
Health, concern for the environment and a belief that organic food tastes better remain the three most common reasons for consumers to buy organic. Major barriers to purchasing organic products remain price and availability. Poor appearance of organic food is significantly less of a barrier than has been reported in the past as more professional supply chains ensure only highest quality items reach final markets.