Organic Market Report's Success Story

Australian Organic Market Report's Roaring Success Story

Australian Organic Limited’s (AOL) Australian Organic Market Report 2021 has revealed an opportunity laden and growth-filled future for organic producers, with the industry predicted to develop into an AUD $3.9 billion sector in the next five years.

AOL Chief Executive Officer, Niki Ford, said this year’s report, which has adopted a more robust research methodology in collaboration with the University of Melbourne and research partners Euromonitor International, Mobium Group and NielsenIQ, showcased not only the industry’s resilience during the global pandemic, but its potential to secure increasing market share.

“The Australian organic industry already contributes more than $2 billion to the national economy annually, and has continued to thrive during the past two years despite unprecedented natural disasters and COVID-19,” Ms Ford said.

“As an industry, we are prospering and making a growing contribution to the value of farm gate production, which the broader agricultural sector is working towards being $100 billion by 2030.”

Ms Ford said off-shore organic markets were continuing to build momentum and the global value of sales had leapt by more than 13%.

“For exporters, the future is looking bright as high growth rates for organic were seen in key markets such as North America (16%) and Western Europe (9%), and even in developing regions such as Asia Pacific (12%),” she said.

“If you look at just the US market alone, which remained our biggest trading nation in 2020, forecasts predict the value of organic retail sales will reach AUD $31.6 billion by 2025.”

But Australian organic producers are not the only ones stepping up to meet rising global demand. The Australian Organic Market Report 2021 showed there were 3.1 million recorded organic producers throughout the world – a significant increase from 200,000 in 1999.

Export Connect Founding Director, Najib Lawand, who has more than two decades of experience helping producers and industry establish export partnerships, also noted Australian produce had a significant point of difference when compared to the offering of global competitors.

“Australia is in a unique position as we have an established reputation for producing clean, reliable and trusted products across the sectors which are seeing the most demand,” he said.

“Globally, baby food, condiments and spreads, snack foods, fruit and vegetables and meat are the organic categories generating the most growth and these are all commodities Australia produces well.”

Domestic drivers

Mobium Group Research Director, Nick Bez, who led the consumer research element of this year’s Market Report, noted it was the dual drivers of health and environmental concerns motivating new consumers to opt for organics.

“Our results indicated 62% of shoppers cited personal health as a motivation for their first purchase of organic produce, while 45% referred to environmental considerations,” Mr Bez.

Mr Bez said although the COVID-19 pandemic had created huge economic impacts, it had also motivated Australian consumers to think about their health and food choices.

“It’s interesting to see more than half (56%) of the nation’s consumers have purchased organic produce within the past year, which further proves shoppers are prioritising personal and environmental health,” he said.

The Market Report’s research insights broke organic shoppers down into three key categories: the ‘Devoted’, shoppers who always try to seek out organic options and buy consistently across multiple product types; the ‘Committed’, people who buy some organics regularly as part of their total food shopping; and the ‘Dabblers’, who buy sporadically and are at the start of their organic journey.

Mr Bez said there had been remarkable growth in the devoted and committed categories.

“For regular buyers, 37% of shoppers increased the amount of organic produce they purchased in the past year, with the average household spend on organic increasing 12.8% since 2019,” he said.

Ms Ford is part of the Organics Industry Advisory Group convened in December 2020 by Federal Minister for Agriculture, David Littleproud, to investigate the issue.

“It’s abundantly clear, Australia is lagging behind the rest of the world as we are one of the only developed nations without a mandatory standard established. It is crucial consumers have peace of mind the product they are purchasing has been certified,” she said.

“The findings from the Market Report have added even more impetus to this issue, as results indicate consumers are demanding trust in the products they buy.”

Confident the industry would heed the advice of its consumers and a mandatory standard for use of the word organic would be established, Ms Ford predicted a prosperous future for organic producers.

“Our industry has proved its resilience during very turbulent and challenging times and we have become a powerful player within the export industry. Couple this with solid domestic growth and I cannot wait to see what’s install for the organic industry in years to come,” she said.

Visit the AOL website to purchase the Australian Organic Market Report 2021.