Sales of organic food doubles in two years

Organic food sales in New Zealand have doubled over the past two years and are likely to do so again in the next few years, University of Otago research shows.

However, supermarkets rather than specialist retailers are enjoying the lion's share of the growth, according to the research which is to be presented at today's Bio-Gro annual conference in Palmerston North.

Hugh Campbell, of Otago University's Centre for the Study of Agriculture, Food and Environment, said yesterday that extrapolation of a survey of organic retailers in Dunedin suggested sales of organic food on the national retail market rose from $32.5 million a year two years ago, to $71 million in the year to March this year.

Dr Campbell said the research indicated New Zealand was "likely to head towards a domestic organic market of $150 million in the next few years".

The survey showed 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 since 2000.

"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," Dr Campbell said.

This dramatic shift in the balance of retailing between specialist shops and supermarkets reflected broad trends in many European Union countries, he added.

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

"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."

The survey results gave a series of strong insights into the potential growth, and possible problems emerging in the organic foods sector, Dr Campbell said.

The centre conducted identical surveys in 1997 and 2000.

- NZPA