COLES Supermarkets began its trial of organic foodstuffs in two stores in March 1998 in hope the small niche market would
follow overseas trends and grow significantly in Australia.oday, organic produce is a $200m-plus market with an annual growth of 20% (year 2000 figures the latest available).
Savvy marketers have responded to this escalating consumer demand for organic food.
Coles this year launched its own range of organic groceries under the Coles Organics brand.
Coles corporate affairs manager Caroline Lawrey says the chain now stocks more than 150 organic items.
“The range has grown from 12 lines two years ago and will continue to grow as Coles sources additional ranges and ensures a regular supply of stock as the popularity of the products increases.
“Demand for organic food has grown in the past five years. Customers from many different demographics are purchasing organic products for a range of reasons including health and environment,” Lawrey says.
University of New England marketing and management lecturer David Pearson has conducted research into the marketing of organic food. He says while organic foods’ market share is less than 1%, about 70% of all food buyers purchase from the category—with one regular organic food buyer to every two occasional organic food buyers. Fruit and vegetables account for the most commonly purchased organic food products.
Pearson writes in his paper “Marketing Organic Food” that consumers buy these foods due to a focus on health (minimal chemical residues in the food), environment (preference for food that has been produced and processed in an environmentally friendly way) and taste, though other reasons include animal welfare, low processing and novelty.
Nearly every food product now has an organic equivalent, with Lawrey citing popular organic lines as cereals, wheat biscuits, yoghurt, ice cream, juice, spreads, muesli, pasta, honey and tea. Coles’ most popular fresh organic products are carrots, pumpkins, onions and oranges.
Australian Vegetable & Potato Growers Federation (AUSVEG) CEO Euan Laird says today’s consumers see organic food as a healthy, natural choice.
“I think a certain sector of the market has chosen a lifestyle they believe will benefit them in terms of longevity and overall health. The additional merits of organic are an individual’s choice—they’re clean and green and good for you,” he says.
But experts from Australia’s meat and vegetable markets say the growth of our organic foods will not mirror growth occuring in Europe.
Meat & Livestock Australia general manager of marketing David Thomason says food safety crises such as Bovine Spongiform Encephalopathy (BSE) or mad cow disease in the UK, created consumer interest in organic foods.
In Australia’s meat industry the organic segment accounts for less than 5% of the market.
“Food safety incidents seem to have driven desire for more naturally produced products and over there [in the UK] organics have peaked at 15% of the market and now appear to be declining because of expense. There are also some questions about how good organic is versus non-organic, and whether the benefits are really there,” he says.
“I think the organic sector will grow but it probably won’t be as significant in Australia because most of what we produce in Australia—not just meat—is so close to organic that the organic promise is not going to be a significant advantage over the current product.”
Thomason adds Australia’s greatest opportunity in organic food is the international market.
“In some export markets the need for organics is really high because of food safety incidents that have occurred in their countries,” he says.
Laird agrees that Australia’s “clean and green” image will stymie the growth of the organic sector at home.
“Britain has grown significantly and there are some trends towards that here. But in Australia we have good quality, clean and green normal vegetables so there’s less of a need for it. Our vegetables are grown using good quality water, good soil, not a lot of pesticides, so we have very healthy fruit and vegetables.”
Both also agree the introduction of GM food will not create a further consumer demand for organic produce, with the GM industry not affecting either the meat or vegetable industry for at least another decade. But given the public’s sensitivity to the production process of food that remains to be seen.
