Fad that won’t fade
Negative publicity on food production makes organic a viable proposition
THE AVERAGE SOUTH AFRICAN is cutting back on many luxuries. A two-week trip to Hawaii becomes a weekend getaway to the Drakensberg. A new sports car morphs into a second-hand Citi Golf. A smoker might even be forced to cut down on his cigarette consumption.
It’s not unreasonable to expect organic food to count as a luxury item. For every R1 spent on non-organic food, consumers spend R1,70 on the organic variety. Prices taken from Woolworths on 4 February this year show that a trolley of organic and free-range options would set you back R200 extra.
But you’d be wrong to think consumers are cutting back on organic shopping. Both Pick n Pay and Woolworths report positive growth in their sales. Pick n Pay’s Tamra Veley says: “Pick n Pay’s organic range of products has shown steady growth since its launch in September 2007. Our expectation is this category will continue to show steady growth as more of our consumers are starting to demand a wider range of organics. We expect it to grow even further as we continue to add more products.”
Pick n Pay is currently increasing its offering of organically certified products to include organic dairy, organic groceries and organic commodity items, such as sugar, oils and flour.
Woolworths’ latest annual report shows its organic food sales exceeded targets by 9,81% in 2008, although a spokesman is more hesitant about the year ahead. “Woolworths’ customers have been most adversely affected by the current economic climate. Our customers generally service higher levels of debt. Inflationary pressures have spurred all customers to spend more cautiously.”
All Woolworths’ organic farming is strictly regulated, audited and certified by independent organisations. Its certifiers are required to be accredited to ISO 65 and are generally certified according to EU standards, because SA’s legislative requirements haven’t yet been published.
Its spokesman says: “Organic foods are produced according to specific production standards. The use of synthetic pesticides and artificial fertilisers is prohib- ited, genetically modified crops aren’t used and if livestock is involved, the animals are reared free range, without the routine use of antibiotics and without the use of growth hormones.”
However, some grey areas are causing consumers to hesitate in reaching for an organic alternative. “There’s no law defining the use of the word organic in SA. Anybody can use it for anything without any legal repercussions,” says Diana Callear, MD of organic certifying body Afrisco.
Callear says most retailers will ask for organic certificates supplied by certifying bodies. Since Afrisco is a major certifier it “keeps an eye” on what’s being sold. “I often go into Woolworths to inspect their organic food. Woolworths is good because it has certifier logos on the packets. We haven’t been able to fault them,” Callear says.
In terms of the economic downturn, Callear has noticed changes in the export market. Afrisco certifies a large company in Zambia that produces several high-value vegetables they export to Britain by air. “However, there’s been an outcry in Britain because organic food is good for the earth but the carbon emitted by the aircraft isn’t. Between that and the recession, several companies are no longer exporting,” she says.
Concerning the R200 price difference between the organic and non-organic shopping trolley, Callear says: “Producing organ- ically is very labour-intensive. Producers aren’t allowed to use any chemicals, which means weeds need to be hoed by hand.”
If a farmer is just beginning to produce organic foods, he applies for a conversion certificate. The conversion period is three years, which is how long it takes for chemicals to leave the soil. “The start is a learning process, which means less production for the farmer,” Callear says.
Packaging is an extra cost to the producer, since organic food can’t risk coming into contact with any chemicals in the transport and selling process.
Even though it’s more expensive for a retailer to offer organic foods, Callear says: “I think they often up the price because it’s organic.”
Evan Walker, a retail analyst at RMB Asset Management, says organic food sales remain a small but growing component of most retail businesses. “Retailers cater to a select customer group – those who are aware about their health and social issues.” Walker says organic foods used to be a trend, but the negative publicity surrounding other food production methods – such as genetic modification and widespread pesticide use – has driven people to shop organically. “This isn’t a fad. It will be around for a long time,” he says.