Organically speaking – the demand side gives its views

The organic food market has become the fastest growing segment in the local food sector after baby food. Despite the fact that South African lacks legislation governing organic food production, the country’s organic market grew by 300% from 2004 to 2005 and is expected to grow over 30% a year over the next five years, according to retail website Farmer’s Weekly takes a look at some reviews from retailers.
Issue date : 26 September 2008

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With the launch of over 100 new organic grocery lines including jam, pasta sauces, rice, oils, biscuits, nuts and chocolate in February this year, Woolworths is focused on achieving organic food sales of R1 billion a year by 2012. Woolworths launched its organics initiative, in line with strict international standards, in 1999, and today 4% of its fresh produce is organic.

 During Pick ‘n Pay’s recent relaunch it added more than 50 organic products to its existing range, which in the last financial year grew some 60%. Shoprite, which is still new to organics, believes organic produce sales could represent 10% of total fresh produce sales by 2015. I nternationally, a new Nielsen survey has indicated that over the past two years German consumers have doubled the amount of organic food they buy, while retail brands have gained a larger share of the organic market than brand names. In 2006/07, the turnover of organic products in Germany increased by over 40% and doubled compared to 2005. Almost 25% of the increase is attributed to a single retailer, Aldi.

The company added several products to its dairy range last year and industry-wide sales increased by nearly 50%. A recent US survey found that 70% of adults are continuing to buy the same amount of natural and organic foods as they always have, despite the rising cost of living. The Organic Association says sales of organic food and beverages has grown from US billion (R8 billion) in 1990 to an estimated 20 billion (R162 billion) in 2007, and is projected to reach nearly 23,6 billion (R194 billion) this year. O rganic products represented about 2,8% of total US food and beverage sales in 2006.

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The association says organic food turnover has grown between 17% and 21% annually since 1997, well ahead of the 2% to 4% growth in total food turnover during the same period. T he Hartman Group, a US consumer insight specialist, says reports are starting to surface of a slowdown in certain categories in the organic market and a levelling of overall organic sales. However, while consumer purchase activity is levelling off, Hartman’s research shows the organic market is far from reaching an expiry date or even a saturation point. n South Africa Seanne Kube, Wesgro’s trade promotion manager for the Americas, told that there was a real opportunity for South African food producers to capture a slice of the organic market.

 “Americans are hungry for something new and we have the support of Department of Trade and Industry offices, such as at the South Consulate General in New York, encouraging South African promotional drives. This will create opportunity for different value-added food products,” Kube said. “is seen as a clear product differentiator and organic food can be sold at a premium if the merchandising is done correctly and the product quality is beyond question in the consumer’s mind.” Kube says indigenous products are key to differentiating South African products from the rest of the world. “importers and retailers are looking for products with a difference and rooibos jams and aloe pickles are the difference that they’re looking for.” – Robyn Joubert Sources:;; and