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Otago Research Reveals NZ Organic Sales Skyrocket

28 June 2002

Otago Research Reveals NZ Organic Sales Skyrocketing
Supermarkets big winners while traditional retailers miss out

Sales of Organic food in New Zealand appear to have doubled over the past two years and are likely to do so again in the next few years, with supermarkets enjoying the lion's share of the growth, according to University of Otago research being presented at tomorrow's Bio-Gro Annual conference in Palmerston North.

Extrapolation of a survey of organic retailers in Dunedin suggests that the national retail market is now on a par with the export market, with sales up from $32.5 million per annum in 2000, to $71 million in March 2002, says Dr Hugh Campbell, Director of the University's Centre for the Study of Agriculture, Food and Environment.

"Comparative per capita consumption data also indicates that New Zealand is likely to head towards a domestic organic market of NZ$150 million in the next few years," says Dr Campbell.

The news is not so good for specialist retailers, however, as the survey shows a "significant shift in the balance between supermarket and specialist retailing of organic produce", with supermarkets soaring from 27 per cent to 57 per cent of market share between 2000 and 2002, says Dr Campbell.

"At the same time as the market was growing massively, traditional organic retailers experienced little growth in their volume of organic products and declined drastically in relative market share, falling from 57 per cent to 22 per cent," he says. This dramatic shift in the balance of retailing between specialist shops and supermarkets reflects broad trends in many EU countries, he added.

Despite these findings, there are a "range of reasons why this trend towards supermarkets is unlikely to completely overwhelm specialist retailers", he says.

"While specialist organic shops are clearly in for a challenging few years, they still enjoy certain advantages over supermarkets, which are concentrating on a selected range of large-volume, often processed and often imported foods. By contrast, specialist retailers provide information and much of the fiddly, small-scale, or perishable produce that supermarkets aren't interested in," he says. "Also, many committed organic shoppers prefer supporting local, authentically 'green' retailers over buying from supermarkets", he added.

The survey results give a "series of strong insights into the potential growth, and possible problems emerging in the organic foods sector", says Dr Campbell. Identical surveys were conducted by the Centre in 1997 and 2000.

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