The future of organics

The global appetite for organics is growing in double figures year on year, making organics the fastest multi-food growing sector in the world.

In New Zealand alone, organic grocery sales through supermarkets increased by 127 per cent between 2012 and 2015.

Be advised, say those in the industry, organics is a boat you don’t want to miss.

‘‘It’s serious business; everyone wants in,’’ says Buy Pure New Zealand’s managing director and Organics Aotearoa New Zealand’s chief executive Brendan Hoare, citing the recent acquisition of natural and organic food giant Whole Foods, by Amazon.

‘‘Amazon doesn’t make decisions based on emotion,’’ he says.

‘‘They make them by crunching numbers.’’ He says the organic proposition fits with the market’s demands for greater transparency and authentication.

‘‘Resistance to the change to organic has been from a traditional conventional base who do not want to know about organics. That’s fine,’’ says Hoare.

‘‘But anyone who has got their finger on the pulse will see there is a shift towards organics and it’s only going to grow.’’

This growth is being driven largely by Millennials/Generation Y, defined by Goldman Sachs as those born between 1980 and 2000. ‘‘Millennials are poised to reshape the economy,’’ the multinational investment bank writes in its report, Millennials: Coming of Age. ‘‘Their unique experiences will change the ways we buy and sell, forcing companies to examine how they do business for decades to come.’’

According to the Organic Trade Association, 52 per cent of organic consumers are millennials.

The generation credited with being out to change the world, millennials have a strong interest in health and wellbeing, a high social consciousness and a drive to protect the environment. Organic dairy farmer Ged Goode.

‘‘The tide has turned,’’ says Hoare. ‘‘Globally, people are reconnecting with their health and the environment and they’re saying ‘enough’; enough plastics in the ocean, enough poisons, enough antibiotics. ‘‘That age is over.’’

Jon Manhire, managing director of the AgriBusiness Group, and chair of the Lincoln University Biological Husbandry Unit Organics Trust agrees the key driver for the increased demand for organic products is the alignment of the values that inspire organic farming with those of an increasing number of consumers, such as the protection of the environment and minimising negative social impacts.

On the supply side, Manhire identifies three drivers for farmers converting to organics.

Some, particularly those who have been farming organically for a long time, are driven by personal motivation to be sustainable; some are driven by financial gain; and a third driver Manhire is observing is a regulatory one.

‘‘As more and more of a regulatory framework comes into play, around intensive dairy farming systems, for instance, farmers are starting to ask, what are the alternatives?’’

Manhire says most sectors in New Zealand now have ‘‘pretty good’’ supply chains in place for organic products and across all sectors bar one, production is increasing.

‘‘The only sector I’ve seen with a drop in production over the past 15 to 20 years is the organic honey sector, and that is largely due to the Varoa mite.’’

He says farming organically presents an opportunity to move away from the fluctuations of the commodities market and get into higher-value supply chains.

While it’s true organic products generally garner a higher premium, research undertaken by the Agricultural Research Group on Sustainability didn’t find a significant difference in financial performance between organic farmers and conventional farmers.

‘‘Good organic farmers are making good returns and good conventional farmers are making good returns,’’ he says.

‘‘You have a similar mix of financial performance of farmers in both systems – which meant that we did not find a statistical difference in financial performance.’’

‘‘Financially, you’re no worse off, if you do it properly,’’ says organic dairy farmer Ged Goode.

‘‘But it’s not just the financial side; the personal transition is amazing.

‘‘Farming has become very enjoyable again, and less stressful,’’ says the 68-yearold.