Growing Organic Market Trends across Asia Pacific

Double digit growth is reported in the New Zealand market with marketing manager Monette Tiu from Ceres Enterprises Ltd attributing a portion of the upswing to supermarkets embracing organic products as a direct result of consumer demands.

Across to Malaysia and Wholefoods Business Unit manager Jolene Yeo from SCC Marketing SDN BHD claims that although there is no syndicated data on the organic food industry within the country, she is aware from their own research that there has been significant growth within the organic sector.

“We do believe that the growth of this segment is in its strong twenties,” Ms Yeo said.

“The increasing market demand for organic products is evident with retail outlets having bigger organic sections, the mushrooming of independent organic cafes cum stores. There is also a growing trend where young affluent mothers instill organic living and eating in their homes. The alarming increase in new diseases, global health epidemics and diet related ailments among children are key motivators influencing mothers to opt for organic food and products.” Jolene Yeo, Wholefoods Business Unit Manager

The next 12 months would continue to see positive growth in the organic fresh produce sector according to Ms Yeo, as the demand for the organic produce continues to rise among health conscious and discerning consumers.

Ms Yeo explained that rising demand for organic products will push prices down making them more affordable which will in turn spur regular consumption of these products.  

“Organic products tailored for infants, toddlers and growing children should also see positive uptrend. Parents, especially mothers are now more informed and willing to splurge for what's best for their children."

“Retailers are changing the way they treat organic products with more emphasis on sections dedicated to organic products. Organic sections are not only more organised but also more prominent and larger. Product offerings are also much bigger and complete. While in the past consumers are only exposed to organic fresh produce, consumers are now looking for a holistic organic offering from retailers.”

“Conversion rate among consumers is still relatively low. Nevertheless, we see this as an opportunity to rapidly grow the organic segment.”

These are encouraging market trends indicating that the organic industry worldwide continues to strengthen reflecting consumer demands despite the impact of the recent global financial crisis. 

From the UK

According to the UK Soil Association 2011 Report, Global sales of organic products continue to defy the economic downturn, growing by 8.8% in 2010 with growth continuing into 2011. The reports also states that “Sales of organic products in China have quadrupled in the last five years, and Brazil is reporting an annual growth rate of 40%. Market analysts predict that organic sales in Asia will grow by 20% a year over the next three years.”

From Australia

In Australia, the recent release of the Organic Market Report 2012, has seen documented growth continue within that country.  The report, commissioned by Biological Farmers of Australia (BFA), highlights consumer demand increasing within mainstream retail customers.

Dr Andrew Monk, Chairman of Australian Certified Organic, a division of BFA, says the most significant trend change over the past two years has been the expansion of purchase activities (infrequent) by "laggards" or those consumers who have not traditionally purchased organic.

 “Almost one in four of these people having claimed a purchase of an organic product in the past year” says Dr Monk.

 “This is reflective of the ongoing ‘mainstreaming’ of organics going on.”

“Facilitating this growth is in part the reported greater availability of products in major retailers, and even such things as soft drinks in cafes and food service”, remarked Dr Monk. 

While not a favorite of some in the Organic industry, the ongoing drive and expansion of private label appears an inevitability, and certainly on the upside for consumers who do purchase such products.

Indications are that private label will continue to add to further generic sales in organic products in Australia.

Dr Monk comments that “Such lines as dairy, horticultural produce, meats as well as competitively priced processed goods such as baby foods and ready to eat products appear to offer potential for further growth.”

However are there any barriers to this growth continuing?  Dr Monk replies that the “constraints on supply of “to specification” products and produce remain the choke points for further growth.”

“Across the major retailer sector there have been reports of considerable growth in some categories, ranging from 10 to 30% and more per annum over the past two years.” Dr Monk reports that retailers are generally asking for more organic products “and generally cannot get what they are wanting, in the quantities, consistency and specification they want.”