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 Organics surge drives Woolworths buy 

Organics surge drives Woolworths buy

15 May, 2009 02:44 PM
Biological Farmers of Australia (BFA) says the acquisition of the independent organic retail outlet Macro Wholefoods by major supermarket chain Woolworths is a sign the organic industry is gathering momentum.

Woolworths announced the purchase this week of the eight-store Macro chain.

It will now be rebranded as Thomas Dux Grocer, an incorporated into the fresh grocer/deli launched by Woolworths last year, which currently operates two stores in Sydney's Lane Cove and Paddington.

“Increasing interest in organic foods from major and mainstream retailers confirms recognition that this industry holds a promising future,” says Dr Andrew Monk, BFA director and Standards Committee convenor.

“This recent sale clearly shows leading retailers are acknowledging the benefits in integrating organic into their broader market offering.”

He says organic is becoming harder for major operators to ignore, with the retail value of the organic market reported at approximately $600 million last year.

“Organic is growing on both fronts. Small operators remain an integral part of the industry, as consumers seek to re-connect with food at farmers and local markets in economically tighter times.

“In addition, organic is now also proving it has the capacity to embrace the mainstream food market.

“Major brands are now offering certified organic lines and major retailers are looking for organic products to place on shelf.”

Dr Monk says resources and skills of professional retailers in the organic market will be valuable and should “allow medium and larger sized organic producers more volume and certainty in demand".

He says an increasing uptake of certified organic by retailers is also allowing more consumers to access organic items than ever before.

“It is all about expanding the range and availability of organic products for consumers.

"Certified organic is proving it is here for the long term.”

Macro Wholefoods was originally founded by “Billboard King” Pierce Cody.

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Hate to disagree with Dr Monk, but the Macro purchase was not about organic food but about real estate: Woolworths is re-badging the Macro stores Thomas Dux. And how on earth can a giant supermarket chain with anonymous food trucking around the country possible be organic except in the loosest sense of the word? Will organic farmers be treated to the same bullying tactics Woolies uses on all of its suppliers? Will Thomas Dux source locally grown produce? Thomas Dux, with its supermarket buying power is a real threat to small local businesses. In two instances in Sydney, the opening of a Dux store has resulted in the closing of locally owned delis.
Posted by John Newton, 18/05/2009 10:09:23 AM
I tend to agree with John Newton's comment. There was an article published last week about Woolworth rejecting the supplies from the IPM (Integrated Pest Management) practicing farmers because their produce may occasionaly incorporate an odd Lady Bird or other insect. Woolworth spokesman said their customers "don't tolerate any insects" on the produce hence they prefer routine spray by broad spectrum insecticide as close to the date of harvest as legally permitted. The logic behind it is that customers can see the bugs but can't see the spray. And suddenly they jump into organic movement? I find it hard to believe it's a genuine move.
Posted by Andrew, 18/05/2009 11:05:54 AM
Mr Monk is right, but for the wrong reasons: Woolies has purchased for no other reason than start to harvest some of the upstream margin generated by the premiums that organics offer. While not personally subscribing to the organics option, it is a very real market that the generally more affluent spend their cash in. Good luck to them. Certain organic crops can be grown relatively competitively against conventionally produced crops, and attract a larger nett margin. Others are much more expensive due to loss of production (or quality) and have a small margin. Woolies are not silly: they realise the market size and upstream margins are good and have purchased accordingly.
Posted by Steven, 18/05/2009 2:14:59 PM
Buying into organics while not aware of the shocking condition of factory farmed pigs supplied to Woollies in Tasmania. Shrieks of hypocrisy to me.
Posted by kristin, 18/05/2009 6:43:39 PM

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