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Exports crucial to new $4.7bn organics strategy

10th November 2021 By Bridget O'Connell | bridget@foodticker.co.nz | @foodtickernz

Increasing exports of organic food to key markets including China and the US is at the heart of a freshly inked strategy to drive the value of the New Zealand organic market to $4.7bn by 2030.


New Zealand is the fifth largest supplier of organic products into China

The Organics Aotearoa New Zealand-commissioned report, Taking Action for a Better New Zealand, found the sector was valued at $723m in 2020, with an average growth rate of 6.4% per annum, but undertaking a range of measures to support and grow the sector could see it deliver close to $5bn in GDP in a decade’s time.

Organic exports experienced compound annual growth of 5.8% between 2017 and 2020 to hit $420m last year, according to the report, which was supported by funding from the Ministry for Primary Industries via its Sustainable Food and Fibre Futures fund. 

Some 81% of this was sold into five markets – the largest growth market in the last three years was China, with an increase of 129% from 2017 to 2020 to hit $82m. This compared with a 1% increase to Europe and a 4% contraction to New Zealand’s largest organic market of North America at $86.7m.

These changes were dominated by the growth of dairy – the largest organic export sector at $153.8m in total – with further opportunity in China.

“Organic products are expected to record significant growth in China. There is an increasing emphasis on the importance of organic products among the younger generation, a rise in demand for organic baby food due to the growing number of mothers in the workforce, and increasing adoption of the health and wellness trend.”

It added that in contrast with the US, New Zealand’s Free Trade Agreement with China represented “a significant competitive advantage for New Zealand, resulting in significant Chinese investment in domestic products and brands and opportunities for New Zealand producers”.

Despite a contraction in US exports, the strategy also saw opportunity for New Zealand exporters to drive value in North America. It noted that “while import duties remain a barrier for some New Zealand foods and ingredients, US consumers are prepared to pay a premium for higher quality products”.

MPI director of investment programmes Steve Penno said the strategy provided “valuable guidance for the organics sector on how it can tell its story internationally, how to address current challenges and tap into opportunities, and the way forward for growth of the sector”.

A number of of other measures were suggested in the report to support the growth of New Zealand’s organic sector, which comprised around 1200 organic producers, brands and stores.

These included transitioning more farms to organic to boost the current circa 86,000 hectares of certified organic land, as well as partnership building to unlock research and development, innovation and technology activity as well as more support and recognition from central government.

“This strategy focuses on extension services to support more growers to meet organic standards, alongside collaboration with regenerative growers to deliver the best of both worlds,” OANZ chief executive Viv Williams said.

“Active support for indigenous food and growing knowledge, through the Hua Parakore system of Maori organic certification, is also key to New Zealand’s organic food story. Hua Parakore is an authentic New Zealand relationship with food and food production that connects consumers with the land in a way that’s unique to New Zealand.”

 

 


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