Organic Market
Having compared with the World market, organic industry in Australia has a less proportion. In 2010, gross value was US 59 billion but organic market in Australia is still expanding continuously during 2010 – 1012, even the benefit was slow down. Having expected in 1012, organic market in Australia will have gross value about AUD 1.276 billion or 10-15 % of expanding. Australia imported organic products more than AUD 220 billion because major supermarkets imported more organic products to responding the demand of customers. The result of appreciation of Australian currency, it effects to reduce the price of the import products. For export of Australia, it is still less when having compared with export value in 2000. The proportion of organic products export is compared with net export about 10% or AUD 126 billion. The exporting proportion of meat products and dairy products was high when having compared with other organic products. In 2012, circulation of organic products was increasing very much; customers can purchase the products through retail shops about 92% and three-fourth of consumer buys the products through major supermarkets such as Woolworths and Coles.
Graph 1: Percentage of Organic Products
Land of Organic Farming
Australia is arranged as a country of the biggest certified land for organic farming in the World around 11,199,577.4 hectares from total 13,637,541.9 hectares. Queen land state is regarded as the most certified organic farming and the highest value of production of organic products.
Table 1: Land of Certified Organic Farming in Australia from 2001-2011
Table 2: A number of Organic Producers in Australia from 2002 - 2011
Organic Consumer
From the survey, it found that 1 more millions of Australian consumers bought always organic products mainly both food and beverage and 65 % of consumer bought sometimes the products. It increased 60% in 2010 and later 75% in 2011. Consumers bought the products from major retail shops so it can be said that organic products became more mainstream. At first consumers bought mostly fresh fruits & vegetables, raw material for cooking at home and diary product. It is expected that the value of expenditure of consumers for organic products will be increased at AUD 5 billion.
The past important obstacles for organic market were price and products access. Both obstacles have reduced since 2010 because recently there are retail shops expanding their branches so consumers can buy the products easier including major supermarkets such as Woolworths, Coles and Aldi that they have their own private label of organic products and there were more multi organic products for their customers. Therefore it reduced the price of the products years later and there are more multi products. Besides organic products that have got the certification can encourage the growth of circulation of organic products generally because consumers are more confident to buy the products.
The consumers can be divided into two groups namely Traditional Consumer and Mainstream Consumer. The first group gives precedence to environment, animal welfare and they like to buy the product in retail shops and healthy shops etc. The second one gives precedence to environment, animal welfare quite less and they like to buy the products via supermarkets. Thus organic producers should consider the differences of two groups in order to produce the products in accordance with the two mostly. Besides it should think of the price and suitable distribution places approaching to consumers mostly.
Organic Industry Overview in Australia
The demand of certified organic products in Australia is growing highly because a number of organic consumers are increasing continuously. The main cause is the trend of maintain one’s health. Therefore consumers care more to select food and products used for their body including recovering of economic situation in the present, consumers emphasize the value of expenditure to healthy products. Besides, in the past, organic products are not only expensive but also difficult to buy but in in present consumers can buy them easier in general supermarkets and retail shops and moreover they are cheaper than before. Therefore consumers like to buy more organic products. It is expected that the ratio of organic industry‘s growth in Australia will be increasing continuously especially processed organic products are growing up from the past by expansion ratio is 7% in 2010 about AUD 380 million.
Organic diary product is the most ratio of growth in this group (8% in 2010 about AUD 146 million). Besides an Australian market is one of the most open markets in the World for trading of organic products. It is because it is easy for trading while Australian organic exporters are facing the problem of strict regulations and regulation of mark certification and standard of organic products from each import country that has different regulations. Besides some organic producers must close their business because they cannot compete the lower price of imported products and also they have to pay more expenditure to major retail shops if they want to sell their products there.
Table 3: Sales Value of Organic Products from 2004 – 2009 (Unit: AUD Million)
Value of Organic Production
Organic products is US 300,637,412 million, it increased 34.67 % per year from 2010 – 2012 or 16% per year. The bestsellers are fruits, vegetables, and diary product. Consumers like always buy vegetables and fruits.
Beef: Circulation of beef products is increasing step by step from two years ago because of nice products and demand of marketing highly especially demand of domestic customers in supermarkets and foreign customers and moreover appreciation of AUD does not affect to the circulation in foreign markets such as USA, Southeast Asia and United Arab Emirates. The circulation increased 111% or AUD 72.8 million since 2010. Besides fast food shops, Hungry Jack’s started to buy organic beef to sell in its shops since 2011.
Lamb: Circulation of lamb increased very much since 2010 but it did not response enough to domestic demand so the price of lamb became highly. So Australia reduced organic lamb exporting in order to response to the domestic demand firstly. Circulation at farm front gate increased 64% or USD 18.6 million since 2010.
Poultry and Egg: During two years ago, circulation of poultry increased 15.4 %, poultry industry in Australia; there are a few main producers. Although poultry product increased a bit but value of total circulation did not increase as increased products because of pressure from retail shop. Besides organic poultry producers got effect from increased circulation of ‘free range poultry’ (poultry product treated following animal welfare). The obstacle of poultry producers is to explain to consumers how different between organic poultry and free range poultry. Besides the cost of organic poultry production increased because of expenditure of products preserving and feed. Feed for treating organic chicken must use 95% of organic feed - raw material. Organic poultry producers expected that the quantity of poultry production will be increased 5% in 2013 but circulation of organic egg increased 17,549, 148 eggs about USD 4.4 million in 2011 and again increased 37% in 2010.
Milk and Dairy Products: It is because the demand organic dairy products both domestic and foreign counties continuously. It effects to stable organic dairy industry in Australia. Every state in Australia produces organic dairy products. Mostly producers are both family industry and processing factory. The challenging of producers is to add quantity of production to response the demand of products highly. The average price of organic milk is higher than retail price of general milk double or triples.
While other kinds of organic dairy product produced in Australia such as butter and cheese placed in general retail shops are not popular like products placed in supermarkets imported from New Zealand and Europe. Recently major supermarket such as Woolworths, Coles and Aldi sell organic UHT products under their own private label in lower price than other producers to aim the expansion of organic consumers. For circulation of organic dairy products in 2010, it was AUD 29,225 million as the circulation increased very high. While circulation of imported dairy product such as butter in 2010, it was AUD 4.8 million. Mostly all products imported from New Zealand. It is expected that the circulation of New Zealand imported dairy products will be stable in 2012 because Australia could not produce the product to supply the market.
Pork and products: Circulation of organic pork and products cost only AUD 421, 884. The major cause is the amount of organic pork - producer limited in Australia. Organic pork products sell usually in supermarkets and retail shops. While big supermarkets such as Woolworths and Coles sell mainly ham and bacon and more organic pork. The main obstacle of organic pork industry is the high cost of production because of regulation of free range including the cost of organic feed and prohibition of conventional veterinary treatment such as antibiotics.
Honey: Circulation of honey in 2012 cost around AUD 5.2 million that went down from 2010 because the obstacle of competition with lower price of imported products and high AUD appreciation. However Thailand producers can add the quantity of production by giving precedence to export market.
Vegetables and herbs: Circulation of certified organic vegetables, according to industry report of organic vegetables, was AUD 60.61 million. It became lower from the expectation in 2010. The quantity of total products from producers and exporters are quite stable while the price per kilogram is slow down when having compared with two years ago because the major producers added the quantity of distribution to more major retail shops. Kinds of organic vegetable are carrot, potato, broccoli and pumpkin and other vegetables and herbs sold to niche market are herb, bamboo, asparagus, sweet corn and iceberg lettuce. By the time tomato cannot support the demand of market because producers cannot supply the product enough. The major obstacle to make organic industry slowly is the products that cannot support the demand of market caused by producers cannot sell their products to organic markets in suitable price.
Fruits: Sales value of fruits in 2012 was AUD 61.61 million increased more 50% from 2012 and it was expected it will be growing continuously because the major producers send their products to the markets. While amount of some small and medium producers are slow down: 60% of organic consumers buy always vegetables and fruits; bestsellers are apple, orange, and olive. Besides, the trend of grape for wine is increasing.
Nuts: Sales value of nuts has had a ratio growth continuously since 2010. In 2012, it cost AUD 341 million, it increased 300% by almond is the most circulation cost AUD 1,609 million, later macadamia and walnut cost AUD 1,144,000 and 297,111 respectively. The obstacle for organic bean industry is to import a cheaper bean from foreign countries that affects to some of domestic manufacturers. Besides manufacturers can add value of bean products such as baked beans and chocolate covered bean may be an interesting choice to export the products to foreign countries to reduce disadvantage of lower price of imported products and also to promote the progress of bean industry.
Essential oils: Essential oils product is still deficient in domestic because essential oils industry has not been developed yet. It refers to the manufacturers lacking of skills and experiences to produce quality product supplying to the markets. Besides, the markets still need essential oils product to be one of components of raw material to produce organic cosmetic and personal products expanding highly. Thus cosmetic manufacturers may consider the better quality of foreign imported essential oils product. In 2012, value of essential oils product cost AUD 1.39 million.
Graph 2: Value of Organic Products from 2011 – 2012, Having Classified According to Manufacturer, Wholesaler, Retailer and Exporter.
Mostly circulation of organic products is from retail shops cost AUD 591.3 million or 49%. In this regard, Coles and Woolworths are the major supermarket to distribute 500 certified organic products. Both of them expected to add more the products in the future. Other supermarkets such as IGA, Aldi, Footworks and Costco presented their multi organic products to consumers in several choices. Total value of retail circulation of organic product in Australia expected to be AUD 1.15 billion.
Graph 3: Distribution & Export of Organic Products
In Australia, 63% of manufacturers export their organic products to foreign countries such as China, Columbia, East Timor, Ethiopia, Hong Kong, Indonesia, India, Japan, Papua New Guinea, Peru, Singapore, Turkey and United States. While it is 36% of distribution in domestic and another 1% is distribution via internet especially cosmetic products.
Graph 4: Organic Products imported from Foreign Countries
Organic products - manufacturers added value from imported products such as USA, Europe and Asia by the method of processing and distribution such as beverages and cereal from USA and New Zealand, canned food products from Europe, tea from Sri Lanka etc.
Graph 5: Estimation of Circulation of Organic Products from 2012 – 2013
Trend of Organic Products in Australia
Prediction of total progress of organic industry in 2013 is still positive while in 2011, value of progress on average 15%, sales value of some manufactures expanded 20-50%. While minority of manufactures, their circulation is still stable or the benefit per unit was stow down a bit but total benefit is still stable continuously from quantity of more distribution. Total operating result of industry expected that it will be increased to AUD 1.2 billion. There are important channels of distribution namely wholesale, retail, and online-sell growing continuously.