ORGANIC DRINKS: RETAIL'S GREEN OPPORTUNITY

Retail’s green opportunity

Organic alcoholic beverages are no longer a niche, but their expansion into mainstream liquor stores relies on a better understanding of the growing market segment writes Molly Nicholas.

Aligning with health and environmental values, Australian consumers are increasingly gravitating towards cleaner, more sustainable choices across various industries, and liquor is no exception.

While health-conscious consumers are increasingly drawn to brands with fewer calories and lower alcohol content, they are also seeking out organic credentials.

Growth is boosted by a growing awareness of the benefits relating to consumption of organic products, and for liquor retailers, this shift presents an opportunity to capture a growing market segment.

The clean choice

Topher Boehm, Co-Founder of Wildflower Brewing and Blending, which brews its beers with regenerative organic grains, says demand for organic beer has evolved at a gradual pace, with consumers finding nourishment in natural ingredients.

Explaining why consumers choose organic beer over conventional options, he said: “I would suggest that at least in beer, it’s a product known to have been made without ingredients that may carry trace residue of pesticides in them.”

Raw materials grown without synthetic nitrogenbased fertiliser have a far lower carbon footprint, making them safer to consume and easier on the earth. While it is true that beer drinkers are prioritising organic beverages for their perceived health benefits, these behaviours are not restricted to beer.

De Bortoli Wines launched its Organic range in 2022, and while it represents a smaller segment of overall production, the range has experienced steady growth.

A spokesperson for De Bortoli Wines said: “Wines made from organically grown grapes offer more intense and evocative flavours, resonating well with consumers seeking environmentally friendly and health-conscious options.”

The Atmata wine range from Casella Family Brands is 100 per cent Australian Certified Organic from vine to bottle, and a portfolio that continues to grow, with the addition of a sparkling and Chardonnay last year.

Wines made from organically grown grapes offer more intense and evocative flavours, resonating well with consumers seeking environmentally friendly and health-conscious options.

David Lowe, Lowe Wines

Dora Cameron, Atmata Brand Manager, says: “According to IWSR, global sales of organic wine have grown from 29 million cases in 2012 to 71 million cases in 2022.

“Underpinned by consumer health and wellness trends and a rising awareness and interest in sustainable and ethically sourced products – organic wines are no longer a niche choice but a growing consideration for everyday Australians.”

Sip sustainably

While consumers may be interested in reducing their exposure to synthetic chemicals and genetically modified organisms (GMOs), organic drinks are also a primary choice for those concerned about environmental sustainability.

Yalumba’s Organic collection, which first launched in 2005, relaunched as Yalumba GEN in 2022, and according to Louisa Rose, Head of Sustainability and Brand Ambassador, the positive impact of organic practices on biodiversity resonates with eco-conscious consumers.

“[Our sustainable winemaking program] creates a cultivated but naturally balanced vineyard ecosystem that makes efficient use of the natural feature of the land, stems environmental decline, regenerates resources and fosters biodiversity. This approach allows us to pursue a minimal intervention approach to winemaking – in the vineyards and in the winery.”

Organic beverage production might represent a commitment to preserving the natural environment, but it isn’t without its challenges.

Wines made from organically grown grapes offer more intense and evocative flavours, resonating well with consumers seeking environmentally friendly and health-conscious options.

A spokesperson for De Bortoli Wines

Kirra Daley, Co-founder of Beachtree Distilling Co, says: “While organic farming is better for the environment, it can result in lower yields and inconsistent ingredient quality, which makes maintaining a consistent flavour profile difficult.

“Adding to the complexity is the rigorous process of organic certification, which is time-consuming, costly, and requires meticulous documentation.”

David Lowe, Winemaker at Mudgee’s only organic and biodynamic winery, Lowe Wines, strikes a similar tone, reflecting on a journey that has required a lot of trial and error.

“The way I see it is that organics is about what you can’t do; for example, you need to eradicate the use of artificial chemical fertilisers, pesticides, fungicides and herbicides. This doesn’t leave you with much, and our wines were suffering for it,” he explains.

For Lowe, the introduction of biodynamics represents a real turning point. Using biodynamic preparations influences the microbial activity of the soil – therefore mineralising and feeding the vines, while the lunar calendar guides practices.

“Biodynamics is about what you can do. I’ve been using biodynamic principles since 2011, and it’s become an essential element of my winemaking,” he explained.

“We now have an incredible biodynamics specialist on-site full-time. Our winery is 100 per cent organic and biodynamic, and the vines and wines have never looked better.”

Breaking down barriers

Despite the growing interest in organic beverages, suppliers are still concerned about category misconceptions and a general lack of education about what organic truly means.

Underpinned by consumer health and wellness trends and a rising awareness and interest in sustainable and ethically sourced products –organic wines are no longer a niche choice but a growing consideration for everyday Australians.

-Dora Cameron, Atmata

For many, the first hurdle is the dated belief that organic drinks lack the quality and flavour of non-organic alternatives, and this is where retailers play a crucial role.

“Hosting tastings and events that allow consumers to experience the improved quality and flavours of modern organic wines can dispel outdated perceptions and boost sales,” a spokesperson for De Bortoli told National Liquor News.

With demand forecast to keep growing, Matt Redin, Marketing Manager at Angove, which produces Blind Tiger Organic Gin, highlights the importance of consumer awareness.

“Retailers should communicate the health and environmental benefits of organic drinks. Use labelling, signage, and marketing materials to emphasise the absence of synthetic chemicals, GMOs, and the sustainability of the production practices.

“Organic alcohol brands will continue to emphasise their commitment to ethical and sustainable practices, leveraging storytelling to connect with consumers and build brand loyalty.”

The same is true for Lowe, who sees lack of education as a barrier to entry, especially when organic products are typically more expensive than their non-organic counterparts.

“Despite the uptick in interest, a key theme I’m seeing amongst consumers is confusion over what organic means. As organic wine tends to be more expensive, consumers always want to have a justification of the price point and know why they should choose it,” he stated.

Retailers are well positioned to support the growth of organic drinks, utilising point-of-sale materials and highlighting certifications like the Australian Certified Organic Standard.

While the approach looks different for each retailer, creating a dedicated organic section makes it easy for customers to identify these products, paired with effective merchandising strategies to inform shoppers about the benefits of organic wines.

Are consumers being misled?

Nil Desperandum, which scooped Best Rum at the 2024 Australian Distilled Spirits Awards for The Double Ton, uses production processes in accordance with Australia Certified Organic’s standards, assessed by an independent auditor and approved organic.

But according to Nil Desperandum Co-Founder Matt Hobson, being the only OECD country with no domestic standard for organic products means Australian products can be labelled organic with little to no verification.

“This means claims of organic mean very little in the domestic market as there are many pretenders claiming something unsubstantiated that is misleading and in many cases is deliberately so.

“This needs to change and the Federal Government is encouraged to heed the ongoing calls of industry to ensure consumers are able to make informed decisions,” he stated.

Consumer characteristics

Within the organic drinks segment, environmental and health priorities are clearly fuelling demand, but according to Redin, the demographic characteristics of these consumers are also quite distinct.

“Organic products are often more expensive, so consumers who purchase organic drinks are frequently in higher income brackets and have higher levels of education.”

While these consumers are generally better informed about organic products, and more willing to invest, he says Millennials and Gen Z are also likely to seek out brands with better health credentials and ethical practices.