If you’ve suspected that the organic industry is smashing it … you're banging on the money. According to figures from the Australian Organic Market Report 2018, it is now valued at $2.4 billion – a massive 88 percent growth since 2012.
A session at this year’s Naturally Good Expo highlighted some key findings from the report, and how businesses can tap into Australia’s ever-increasing appetite for organic food and drinks.
Key Factors Driving Organic Growth
The report – which included input from five research organisations – found three main factors that are driving organic growth.
The first is increasing numbers of new organic consumers. Concern about well-being is the major reason people purchase organic food and drinks. “Australians [are] becoming more embracive of health, wellness, and sustainability,” says Nick Bez – the director of research company Mobium Group – who spoke about the report. “Organics fits right into that sweet spot.”
He explains that the industry has grown from being “fairly niche” to “mainstream”. In just two years, the grocery component of the organic industry has grown by 13 percent to around 1.1 billion dollars, he says, compared to around $200 million 10 years ago.
Andrew Monk from Australian Organic explains that people are also concerned about the environment and animal welfare, with live export being one example. He says consumers are “asking questions and want integrity in the food that they buy.” With its high level of transparency, the organic industry caters to this desire.
Second is improved industry quality. With 35 million hectares, Australia has “well over half of certified organic land on planet Earth”, Monk says, and the industry is maturing.
The third is improved recognition of organic certification logos. While the term “organic” isn’t regulated in Australia, certification is legally required by export markets. Many supermarkets – and even some farmers markets – are now requiring certification to make the organic claim.
Wine is another example of successful organic entrepreneurship. “There are some winemakers specifically targeting and finding niches in the most peculiar of places."
Organic Opportunities Blooming
The industry has had a growth spurt, but has by no means reached its full potential, Monk says. “We’re still around the one percent mark on a crude average basis [compared to five to ten percent in some European countries],” he says. “Our industry still has so much blue sky above it.”
Sitting on our doorstep, Asian markets will continue to be a source of demand, thanks to their growing middle-class demographic and appetite for health and wellness products, Monk says. “Organic is positioned right in that niche.”
Australia’s epidemic of lifestyle diseases will also likely drive more people towards organic food and drink purchases.
Monk says diversification is crucial to success in the sector. “You thereby strengthen your business proposition and in turn bring more money into the farm gate or in the front door of your business.”
Bez notes the significant short-term opportunity in encouraging existing organic shoppers to become more regular buyers. “You’ve got a group of people who are already across the line but it’s about how you continue to evolve their purchasing behavior,” he says. “The Industry’s got a big job to continue to drive that but … the opportunity of getting it right is a very large upside very quickly.”