Organics Aotearoa New Zealand’s 2016 organic market report identified the continuing strong growth in consumer demand for organic food types and the increased value it was playing in NZ’s food export trade.
The success story was straddling domestic and overseas consumers.
At home Kiwi tastes for organic grew by 127% since 2012, a massive average growth rate of 42% a year. Organics now accounted for $217 million a year in food sales.
Export income from organics was $250m in 2015, up 11% in a year with just under half that sold as fruit and vegetable produce.
Pastoral products were second in significance, with dairy, meat and wool accounting for 28% of sales value followed by processed foods and wine at 10% each.
The main buyers for NZ organic exports were the United States and Europe, accounting for half, followed by Australia. China was the rapid riser, moving from zero to 10% of export sales in only seven years.
The wine sector’s rapid move up the ranks in organic value had 2000ha or 5% of the country’s vineyard area now under organic certification, with 69 wineries certified organic.
Organics Aotearoa NZ chief executive Brendan Hoare said there was a generational shift occurring among consumers globally that would assure the continuing growth in the sector.
“The Colmar Brunton Better Futures report gives a good insight into this shift.
“It highlights the level of engagement Gen Y or Millennials have with sustainability related issues as they gain momentum as consumers.”
That generation was the most environmentally concerned yet but it was also one sceptical about how strongly businesses were committed to being sustainable. It was a level the next generation, generation Z, was taking up another notch again.
Survey work revealed two thirds of Gen Y were willing to pay more to get the best organic, sustainably produced products available, up from 59% in only a year ago.
“This is a sector that expects a brand’s integrity to be baked into the company and they will check it out.
“This is why the organic sector is performing because it is living up to that expectation right through the supply chain.”
By 2025 Millennials would be 75% of the workforce, bringing their concerns over personal health, environmental protection and social equity into their buying decisions.
However, Hoare said there was concern over the generation’s inability to recognise specific organic brands, despite their desire to buy organic products.
“Seven out of 10 consumers across all ages are not able to name any brand or organisation they consider a leader in sustainability.”
The sector has identified the need to make organic certification more meaningful to consumers, helping them understand it covers multiple aspects of production, including using GE-free, free-range, all-natural ingredients.
But the horsepower to promote product and brand recognition in NZ might be on the rise with the weight of the two main supermarket chains now well behind organic product lines.
Almost half Countdown’s customers had put an organically certified product in their trolleys in the past year, with Fairtrade bananas, organic whole milk and organic almond milk taking the top three spots.
The chain was also ramping up its own house brand organics under the Macro label and had 15% growth in customers buying the products in a year.
Foodstuffs classed the move to organics as “premiumisation” where consumers demanded basic foods with added value, such as well-being factors that meant the food was better for their body and the environment.
“The supermarket businesses are hard-nosed, they would not have gone into organics unless they could see clear value in it.
“In the case of Countdown it has been three years of work to get to launch.
“They see this as a real onward and upward growth that is not limited to any one particular food category alone,” Hoare said.
Overseas the appetite continued to grow, valued at US$80 billion last year, up from US$59b in 2010.
The United States accounted for 44% of that US$80b with Germany and France next but China now also accounting for US$4b a year.
