New Zealand Organic Report 2010

The New Zealand Organic Report 2010 – commissioned by OANZ and prepared by the University of Otago – shows the total value of New Zealand’s domestic market for organic products has increased to 315 million NZ$, (175 million euros) with an additional 170 million NZ $ (94 million euros) contributed by organic exports.  New Zealand now has 1,145 certified organic farmers, producing on more than 124,000 hectares of land. The report also highlights areas of growing interest around organic fibre and textiles.

(Picture: Organic kiwis are important products for export)

Certified organic food and beverage products contributed 485 million NZ$ (270 million euros) to the New Zealand economy in 2009, according to new research launched by Tim Groser, the Minister of Trade, and Organics Aotearoa New Zealand (OANZ). Organics Aotearoa New Zealand Inc. (Picture: Logo of OANZ) is the umbrella organisation for the organic sector in New Zealand. Its roles include the development and promotion in New Zealand as well as acting as the primary source for information on the sector.

Until 2006, the Organic Product Exporters of New Zealand undertook a regular survey to gain an understanding of the character of organic exports, while a separate review was carried out by Otago University into the character of the domestic market. In 2007, OANZ commissioned research which combined the two markets and included a household survey to establish the level of interest of consumers in relation to the purchase of organic food. In 2009, OANZ commissioned CSAFE (The Centre for the Study of Agriculture, Food and Environment) to prepare the New Zealand Organic Sector Report. (Picture: Cover of the NZ Organic Report 2010)
 

After the promulgation of the first organic production standards in 1987, larger commercial entities became interested in organics, culminating in the experimental production of organic produce for export by large corporate exporters in 1991 (peas and kiwis). Initial companies were Watties Frozen Foods Ltd. and the NZ Kiwifruit Marketing Board. These early corporate participants were later joined by ENZA, Fonterra and other principally fresh vegetable exporters as major corporate investors in organic export growth. Organic revenues were almost entirely driven by the export initiatives of large companies seeking to satisfy new consumer demand in Europe, Japan and the USA. During this growth, certifiers have emerged. The first was BioGro NZ that was joined by Demeter, AsureQuality and Organic Farm NZ. (Picture: Organic apples from NZ are in high demand)
 
In 2007, OANZ commissioned the first full census of the state of the organic sector in New Zealand. The findings form an important benchmark for the ongoing evaluation of the growth of the sector. Overall, the 2007 OANZ report indicated strong growth in the organic market since the early 2000s, particularly in some parts of the industry.

The number of organic licensees has risen dramatically in recent years. While in 1997 there were only 335 licensees, in 2009 there were 1,145 (2007: 860). The number of certificates for organic conversion rose by 61 % from 2007. In 2009, 8,175 hectares were dedicated to organic horticulture and cropping (2007: 5,045; 1997: 4,945), 108,586 hectares to livestock (2007: 52,070, 1997: 6,210) and 7,702 to mixed farming and other uses (2007: 6,768, 1997: 805). (Graphic by OANZ: Land Area under Organic Certification)
 

Product category	2002	2007	2009
Fresh fruit and vegetables	78 %	73 %	50 %
Frozen and canned vegetables	8 %
Processed foods		5 %	12 %
Meat and wool	7 %	8 %	6 %
Dairy		6 %	16 %
Beverages incl. wine and beer	2 %	3 %	10 %
Honey		3 %	5 %
Other	5 %	2 %	1 %
Total	100 %	100 %	100 %

Organic exports have been a key component in the development of New Zealand’s organic sector. A census of organic producers and exporters was conducted with multiple follow-up contacts. While in 1997 the organic export market was worth 32 million NZ$ (18 million euros) it rose to between120 to 130 million NZ$ (72 million euros) in 2007, and to 170 to 180 million NZ$ (94 million euros to 100 euros)  in 2009. The export market has been dominated by fresh fruit exports, with secondary contributions from meat and wool, dairy, processed foods, beverages and honey. 

Frozen and canned vegetables are included in processed foods for 2007 and 2009, and dairy and honey were included in the category „Other“ in 2002. Fresh fruit and vegetables remain the largest category of organic exports and this is made up of 48 % apples, 48 % kiwifruit, other types of fruit, and minimal exports of fresh vegetables. Main export destinations in 2009 were Europe (37 %), North America (22 %), Australia (19 %), Japan (9 %), Korea (8 %) and China (1 %). In relation to the largest category – fresh fruit – approximately 60 % of apple exports are to the EU, and 40 % to North America. Over 50 % of organic kiwi exports are to Europe, 30 % to Japan and the balance mainly to North America. (Table: Value of Organic Exports by Product Category)
 

In addition to their exports, organic processors and input and service providers were asked as part of the 2009 census to provide data on their sales within New Zealand and this came to a total of 61,206,000 NZ$ (34 million euros). This figure is an indicator of domestic production value rather than final retail sales value and does not include direct-to-consumer sales, organic food imports and small market operators such as farmers' markets. (Graphic: Category of Organic Domestic Production by Value 2009)

The relative importance of product categories for the New Zealand domestic market differs substantially from the export market. Processed foods, beverages and dairy are the major product categories, while fresh fruit and vegetables comprise a small proportion of their sales to the domestic organic market. Trends show, however, that people are starting to buy more local and domestic products at specialist organic stores and they are increasing their purchase of fresh products. It is not possible, based on existing data sources, to comment on the proportion of total organic sales that are conducted within specialist retailers. (Picture: Organic kiwifruit being packaged)
 

There are more than 70 specialised stores in New Zealand. A few of the main stores are Commonsense Organics (with four stores around the capital city, Wellington), Huckleberry Farms (located in Auckland) and Piko Wholefoods (in Christchurch). The value of organic sales at specialist shops for 2009 was approximately 150 % of the value for 2007. The value of organic sales based on census respondents – organic sales at retail specialist shops – amounted to 12,903,480 NZ$ (7 million euros) in 2009. This was the first year that data on the product categories of organic sales at specialist shops were collected. Sales of organic products at specialist shops are dominated by processed foods (38 %) and fresh fruit (26 %) and vegetables, followed by meat (12 %), dairy products (9 %), cosmetics (5 %) and beverages (4 %). Other products account for 6 %.
(Picture: Organic sheep in NZ)
Compared with data from 2007, a greater proportion of organics sold in specialist shops comes from the region (17 %) and domestic sources (65 %). The remaining items are imported (18 %). In 2007, only 8 % of goods were sourced locally, 50 % came from domestic production and 42 % were imported. In the 2007 OANZ report, one of the major findings was the degree to which growth in domestic organic sales was being driven by imports of organic food. Findings in 2009 show this is increasingly not the case for organic specialist shops. The proportion of fresh and of domestically sourced products has increased relative to processed and imported organic products. This finding relates specifically to specialist retailers rather than supermarkets. (Picture: Richmond Plains Winery)
 

New categories of organic products – particularly non-food products - have emerged recently. Organic production standards and certification systems have responded to include the certification of the products of organic fibre raw materials as well as their processing and handling. Until recently in New Zealand, a significant proportion of wool produced by organic farmers was sold into conventional markets, with only limited amounts being sold and marketed as organic. This has now changed, driven by the demand for the production of organic fabrics as well as other textile products in New Zealand and overseas. This demand is reflected in one New Zealand company – Wool Partners International. The company reports significant unsatisfied demand. This and other demands for organic wool provide a positive signal for sheep producers in a relatively depressed New Zealand wool industry. (Picture: Organic wool - not only for end customers to enjoy)