Retail sales for Australia’s organic sector should pass the $1 billion mark for 2010, a milestone for an agricultural niche that is steadily becoming more mainstream.
The sector’s retail value was about $623 million in 2008.
Subsequent year-on-year growth has been underpinned by an expansion in organic producer numbers of four to five per cent a year, according to the Australian Organic Market Report 2010.
One of the report’s authors, Dr Andrew Monk, said the only one of the products tracked by the report that didn’t grow was organic wool.
Production of organic essential oils, increasingly popular for cosmetics, has leapt 155pc in the two years since the last report.
Organic egg production has climbed 75pc, milk and dairy sales have increased 36pc, and fruit and wine production is up 16.5pc.
About 60pc of the households surveyed for the report had bought organic produce in the past 12 months, up from 40pc in 2008.
Dr Monk said while the sector still only accounts for around 1pc of Australian food sector sales, lagging the 2-4pc niche it occupies in Europe and North America, the ongoing expansion of organics still offers opportunities for new players.
However, he advised new entrants to do their research carefully.
“The reason we invest in this market report is to separate the myths from reality,” Dr Monk said.
“There are people who say the whole market is undersupplied, but we would say you definitely need to do your research.”
In general, organic grains continue to be undersupplied from Australian sources, while in fresh horticultural produce, seasonal oversupply can be an issue.
The organic sector is also considering how it can support “biological” farmers, those who have cut down on synthetic inputs in favour of natural approaches to soil fertility and crop and animal management.
“Going biological” is a transition step between fully conventional and organic, but because there is no certification involved, farmers can keep chemicals in the system to deal with emergencies.
“We’re trying to incorporate biological approaches because we think that a lot more farmers will realise that in fact, they can become more productive by taking that course,” Dr Monk said.
But without an industry-wide standard and certification, getting extra retail value out of produce grown under biological methods will be difficult.
“I’d like to think through time there will be more clever approaches to collective marketing,” Dr Monk said.
“That’s a theme out of the latest Organic Market Report: the success stories seem to be those who have realised they can’t supply a market on their own, and have pulled people together to make a name for themselves.”
Organics has also succeeded because of the rigour behind its labelling, he said.
Australian Certified Organic (ACO) recently won the CHOICE Award for Food Endorsement Programs over the Heart Foundation tick, Dolphin Friendly and Low GI labels.
ACO won because it offered an independent process for setting standards that included all stakeholders, “so there is no stranglehold of interests”; and a fully independent third party auditing program to verify that standard.
“I think these have been the success points for organics,” Dr Monk said. “Anyone wanting to develop a new label would have to take notice of these issues.”
* For more information visit www.bfa.com.au
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