Major Strides For Organic Sector But Opportunity For Greater Gains
The organic sector in Aotearoa New Zealand continues to grow rapidly to meet growing demand from consumers seeking positive health and environmental benefits both in New Zealand and around the world, says Organics Aotearoa New Zealand (OANZ) chief executive Viv Williams.
Releasing the Organic Sector Market Report 2020/21, Ms Williams said while the growth from 2017 was heartening, the research also identified challenges facing the sector, as well as the fact that even greater gains can be achieved for the New Zealand economy by enabling the sector to grow even faster.
She said the research showed that OANZ’s coordination of an NZ Organic Sector Strategy was timely, as was the Organic Products Bill now before Parliament, to help promote a scaling up of the New Zealand organic sector in the coming years.
The report is publicly available from tomorrow on OANZ’s website, and sector leaders and interested parties are participating in an online seminar to talk about the findings and the opportunities for the sector.
“What is clear is that the work going on in the organic sector fits well with the government’s July 2020 ‘Fit for a Better World’ strategy to accelerate the economic potential of New Zealand primary sector while meeting our social and environmental aspirations,” said Ms Williams. “But the organic sector really needs to scale to have an impact. By developing our industry strategy and by engaging with government, we see an enormous opportunity to play an important part in this value acceleration.”
Key findings in the report include:
The sector is worth around $723 million in 2020 up from $600 million in 2017, an increase of $123 million or 20%, an average growth rate of 6.4% a year
Fifty eight percent (worth $420.4 million) of sector output is exported and 42% (worth $302.5 million) is consumed domestically
Organic dairy products are now the largest part of the sector with exports worth $153.8 million, up 55% on 2017. In 2020 organic dairy farmers received a payout of $10.19 per kilogram of milk solids (vs $7.19 for non-organic) – a market record for NZ
Fruit and vegetables (worth $143 million up 6% from 2017) and organic wine (worth $65 million up 40% from 2017) are the second and third largest sector components respectively
New Zealand’s top five organic export markets are: USA ($86.8 million), China ($81.8 million), Europe ($73.4 million), Australia ($66.4 million) and Japan ($31.5 million)
Consumer demand for organic products continues to grow. In NZ, 81% of consumers surveyed reported buying organic products at least fortnightly
Consumers top three reasons for organic purchases are: 1) organics are more natural (74%); 2) Seen to be free of residues and sprays (70%); and 3) to protect and promote family health (68%)
While total land area under organic certification is 3.41% (3,029 hectares) less than in 2017, there are now 198 more certified organic operations over 2017, up 12%. There is a 54% increase in operations converting to organic in 2020/21 compared to 2017
Supermarkets are the way most Kiwi consumers access organic products (69% of the market worth $209 million), although independent stores (30% of market) also saw strong growth to $91.5 million, an increase on 2017 of 305% (farmers markets make up the remaining one per cent)
Ms Williams said that, as with earlier Market Reports, the 2020/21 report showed the way in which the organic sector reflected Aotearoa New Zealand as a nation. The report contains the first national survey of the Community Garden sector, 91% of which say they use organic practices (and 4.3% biodynamic). The report also includes a Māori Organic Overview reporting on the work of Te Waka Kai Ora (The National Māori Organics Authority of Aotearoa). The report also discusses initial analysis of the impact of COVID-19.
“Ours is a diverse sector ranging from the organic operations of corporate leaders like Fonterra and Zespri to community initiatives to promote local food security as well as mental wellness,” said Ms Williams.
“We are a sector that already creates real economic value – more than $7,250 on a per hectare basis – which ensures sustainable livelihoods. We are confident we can do more as we realise our full potential to expand further.
“Our environmental contribution to biodiversity, water quality and key climate mitigation indices are measurable and scalable. Our social value serves the entire supply chain by giving farmers and producers more satisfaction as well as providing assurances to consumers through an internationally recognised certification system that is more than four decades old,” she said.
The report was not only a tool for OANZ and its members to better-understand the sector and the communities they serve, but would help others gain an understanding of the opportunity and challenges faced by the sector as it sought to extend the role New Zealand played as part of the fastest growing multi food sector in the world.
“The future is positive for the organic market in terms of demand. However, the NZ organic sector requires significant development, in areas of research, technology, policy, skills, and marketing, to capture demand opportunities and reach new customers in NZ and abroad. The sector is Fit for a Better World, but to be really effective for New Zealand, the sector needs to scale. To that end the sector wants to further partner with consumers, government and industry bodies to grow the sector,” said Ms Williams.
For further information: Viv Williams, OANZ CEO | Tel: 021 840 422 | Email: viv@oanz.org
About OANZ
Organics Aotearoa New Zealand (OANZ) is the national organisation representing the New Zealand organic sector with a vision to make the world more sustainable through organics. The mission of OANZ is to achieve excellence and endurance in organic agriculture and commerce and grow the organic sector in New Zealand.
About the Organic Sector Market Report
Since 2008, OANZ has commissioned an organic sector market report every two years to understand the growth and dynamics of the sector as well as challenges to expansion and issues faced by organic producers. The Organic Sector Market Report evolved from the annual exporters’ report which began in 1996. The Organic Market Report 2020/21 incorporates quantitative and qualitative research as well as drawing on data from the Ministry for Primary Industries and other agencies. The support and co-operation of OANZ members, as well as industry leaders in many sectors who share data to better-inform this industry survey is acknowledged and appreciated.