An overview of the organic industry in New Zealand

Abstract

“The organic industry is on the tip of the biggest iceberg ever to come our way”. These are the recent words of New Zealand’s Trade Commissioner in Japan for the last 15 years, Eugene Bowen. He was referring to the rapidly growing trend towards organically grown food in all markets, and particularly in the affluent markets in the Northern Hemisphere. I have been a kiwifruit grower for twenty years in Te Puke, Bay of Plenty. Five years ago, I began the transition to organic production and now all my fruit is fully certified organic under the “Biogro” label. I am the representative for organic growers to New Zealand Kiwifruit Growers Incorporated and I represent organic producers on the Organic Produce Exporters Group, run by Tradenz. Last year I travelled as part of a trade mission to all of our major markets. The key driver of demand for organic produce was different in each market. In Europe, the trend to organic food is driven by consumer concerns for the environment. In Belgium, lettuce production will cease in two years on large areas of land which have been judged too polluted for food production. Consumers are aware that their surroundings are heavily laden with toxic residues and are seeking food which has been produced in a non polluting management system. In the USA, the growth in the organic markets is driven by consumer desire to be healthy and to stay young and fit. Most of the retail stores selling organic produce also have much larger sections devoted to vitamin and mineral supplements. The largest player in the natural foods industry in the USA is a company called “Wholefoods Markets”. They now have 78 supermarkets nationwide and one of their primary sales strategies is to provide organic food as part of their natural food product range. In Japan, the industry is driven largely by concerns for food safety. Increasing cancer rates in Japan have coincided with more ‘western’ type food. This, combined with a major health scare after an E. coli. outbreak in 1995 has rekindled the Japanese interest in safer food. Japanese have always been fanatical about food quality, especially freshness. This, combined with these new concerns, has driven demand up such that supermarkets are left with insufficient supplies of organic food. In these three major markets the motivations are slightly different but the trend is the same. Consumption in USA is rising at the rate of 20 percent per year and has done so for the last five years. It is now at US$3 billion per annum. Germany has the highest consumption of organic products, at 3.5 % of total food consumption. In Europe, USA and Japan, a 20% price premium over conventional product is now a well-accepted standard. The largest supermarket chain in France, Carrefour, has announced that it plans to increase shelf space for organics in all its stores. The effect of this will be to make organic food accessible where people normally shop, instead of being limited to specialty stores.