Organic expansion: New Zealand sales rise now double that of non-organic products

27-Aug-2018 - Last updated on 27-Aug-2018 at 05:00 GMT

New Zealand’s total organic products market is valued around USD 402 million (NZD 600 million), and has grown by 30% or USD 93.1 million (NZD 139 million) since 2015. ©Getty Images

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New Zealand's domestic organic product sector is growing twice as fast as its non-organic sector, up 8.1% per year in retail sales versus the latter's 4.8%.

Rising consumer awareness of health and wellbeing were cited as the main reason for this.

New Zealand’s total organic products market is valued around USD 402 million (NZD 600 million), and has grown by 30% or USD 93.1 million (NZD 139 million) since 2015, according to statistics from the 2018 Organic Aotearoa New Zealand (OANZ) Market Report.

Some 80% of local consumers make organic purchases at least twice a month. Fresh food items make up over half (51%) of all purchases, followed by packaged/frozen foods (35%).

‘Organic is not a trend or fashion. It is a sophisticated and dedicated market segment that can sniff out a whim or off brand moment a mile away. Organic offers a choice to society to make changes for the long-term good,’ said OANZ CEO Brendan Hoare.

Rising expectations

An increase in general consumer expectations looks set to accompany the rise of the organic sector. Over 75% of New Zealanders expect products labelled as organic to be 'natural/chemical free' and 'pesticide/spray free', and 50% expect these to be ‘sustainably produced’.

Organic products are also expected to be clearly labelled with a certification mark, as consumer awareness rises. 75% said they rely on this to make organic purchases.

48% of consumers also expect their organic purchases to address environmental and sustainability issues.

Growth also seen in New Zealand organic export market

In addition to the local market, organic food exports are also on the rise. The export market rose 42% from roughly USD 167.2 million (NZD 250 million) in 2015 to reach USD 240.8 million (NZD 360 million).

Of this, fresh fruit and vegetables topped the list at USD 91 million (NZD 136 million), followed by dairy, meat and wool at USD 66.7 million (NZD 99.5 million) and wine exports at USD 31.1 million (NZD 46.5 million).

‘New Zealand has the reputation, production and export capabilities to meet demand in markets hungry for organic food and other products, including emerging powerhouse markets in Asia and China,’ said OANZ Chair Doug Voss.

Organic in the region

New Zealand’s main organic trade partners include Australia (16%) and various countries in Asia (25%)., making the Asia Pacific region a particularly important region for its export growth.

Australia’s domestic market for organic products is also huge, at over USD 1.5 billion (AUD 2 billion). The availability of space is a likely factor here.

‘Australia has the most certified organic land in the world, at over 35 million hectares,’ said Australian Organic CEO Andrew Monk.

Over in Asia, the organic market shows immense potential for growth, given its large land mass and consumer base. However, a lack of consumer understanding appears to be hindering this development.

Food safety and quality concerns are big factors in the region, with increasing efforts being made to improve the regulation and legislation of organic products.