Australia’s appetite for organic foods at record levels
New categories in the organic sector in Australia have driven record growth in the $1.72 billion industry, according to a biennial industry report from organic certifying group Australian Organic.
The Australian Organic Market Report is a biennial publication commissioned by Australian Organic that track trends in the Australian organic marketplace. This year’s Report incorporates independent research by Swinburne University of Technology, the Australian Bureau of Statistics (ABS) and Mobium Group.
The organic industry is now valued at over $1.72 billion, representing a 15.4 per cent compound annual growth rate (CAGR) since 2009. Australian Organic said the growth demonstrated that consumption of certified organic food, cosmetics and household products was at a “record high” in Australia.
The report found that Australia still has the largest area of organic land in the world (22 million hectares). There had been a 53 per cent increase in fully certified organic land area between 2011 and 2014. Australian organic production (farm-gate) value is $508 million, up 18 per cent since 2012.
Availability of organics in major supermarkets and new independent organic retailers was in part responsible for this growth, according to Australian Organic.
However, an “extremely strong” export market was also supporting existing farmers and producers as well as encouraging new entrants into the organic arena. Exports of organic products have more than doubled from 2012 to 2014 with the organic export market now worth $350 million.
The Australian Organic Market Report found that dairy was the fastest growing organic category in 2014, and is now estimated to be worth $113 million.
Among the dramatically growing organic dairy industry, yoghurt was one of the fastest-growing categories. five:am founder, David Prior, says,
“Going organic was something that was aligned with my personal values,” said David Prior, founder of yoghurt brand five:am. “It’s much easier to sell something you truly believe in, even if the raw materials are more expensive,” he said.
With compound growth of 127 per cent 2011–2014, beef was the second fastest growing sector with a total value of $198 million in 2014.
Alister Ferguson, CEO Arcadian Organic & Natural Meat Co., said Arcadian could meet consumer demand for organic beef.
“At the moment we’re trading equal amounts of organic and natural meat products but organic is always our preference,” Mr Ferguson said. “It’s what we market and need a lot more of. There is a solid future in organic meat farming and even if we doubled supply the consumer demand would continue to grow,” he said.
In non-alcoholic beverages, organic coffee saw the most dynamic retail value sales growth of 15 per cent to reach $10m in 2013.
Other growth sectors included:
- Wine grape production increased by 120 per cent between 2011 and 2014 and is worth $117 million.
- Despite suffering during the drought, the organic grain category has grown by 20 per cent with total crop values lifting by 67 per cent in three years
- 18 per cent annual growth of organic cosmetics 2009–14 with skincare (35.4 per cent) and haircare (33.7 per cent) showing the greatest rise
Australian retail market for certified organic expected to continue growth
With demand for organics outstripping supply by 40 per cent, Australian Organic said the Australian retail market for certified organic products was also expected to continue on this growth path with private label products, certified organic processed foods and greater affordability driving this trajectory.
“One of the most significant findings was that 69 per cent of primary food shoppers in Australia claim to have bought at least one certified organic product in the past 12 months,” said Dr. Andrew Monk, Australian Organic Chairman. “This demonstrates that organics are gaining greater penetration beyond the group of consumers who have traditionally purchased them,” he said.
Organic purchases by those who are not categorised as green or sustainable shoppers also increased from 24 per cent in 2012 to 40 per cent in 2014.
Consumers’ reasons for shopping organic
“For the first time, we asked consumers their reasoning behind choosing organics with 49 per cent of respondents claiming that they first purchased certified organics as they became aware of the impact food, fibre and cosmetics may have on their health,” Dr Monk said. “16 per cent began buying organic specifically because of a health crisis,” he said.
Australians are becoming increasingly aware of product labels, reading nutritional panels and seeking information about the ingredients in the products they consume. According to Australian Organic, consumers are also “looking for reassurance” when buying organic with 70 per cent of all shoppers indicating that an organic certification mark increased their level of trust in a product.
The report also revealed the perceived benefits of organic are consistently associated with what organic food does not contain and is not produced with. The top six: chemical free (80 per cent), additive free (77 per cent), environmentally friendly (68 per cent), hormone and antibiotic free (meat) (60 per cent), non-GM and free range (each 57 per cent).
One-third (32 per cent) of shoppers said they would only buy a product labelled as ‘organic’ if it was certified organic.
Try as they might, Australia’s fast food outlets have not been retaining their visitation rates.
The Senate Committee investigating the impact of regulations over Australia’s alcohol industry has r...
Foodbank has launched its largest-ever Shop and Share campaign.
Global stevia producer, PureCircle, is now producing a number of stevia-based flavour enhancers.
Woolworths CEO Brad Banducci says Woolworths is outraged about a financial service provider processi...
An Adelaide café is the first in Australia to install an EpiPen station for diners with allergies.
Consumer desire to physically see and choose groceries remains a major barrier to the uptake of onli...
Maurice Blackburn Lawyers has announced it is collecting interest from Retail Food Group shareholder...