An Overview of the Organic Food Products Market in Australia

Abstract

Worldwide, the demand for organic food products appears to have expanded quickly in recent years, stimulated by consumer perceptions that organic products are safe, clean and ethical. The growth rate was estimated to be around 10-20 per cent per annum in the next few years, with sales reaching $US 29-31 billion in 2005. The biggest growth in consumption has occurred in developed countries, such as the United States, Western Europe, and Japan that are also major importers of organic foods. It is clear that Australia, traditionally a major exporter of agricultural products, stands to benefit from the expansion in demand for organic products. The objective of this paper is to provide an overview of the Australian organic food products industry, including production, marketing and certification of organic foods, with the aim of assessing whether the opportunity presented in the world market will be able to be taken. Major issues facing the Australian organic industry are discussed and areas for future research are identified. Production issues include the small production base and conversion to organic farming, while marketing issues focus on prices and product integrity. When applicable, market situations for organics in Europe and the United States are also reviewed to serve as a reference point for comparison.