Issues and Research Needs of the Australian Organic Food Products Market

Worldwide, the demand for organic food products has expanded rapidly in the past decade, stimulated by consumer perceptions that organic products are safer, cleaner and more ethical than conventional products. The demand for organic products is estimated to be growing at a rate of 15-20 per cent per annum, with sales reaching $US23 billion in 2002. The biggest growth in consumption has occurred in developed countries such as the United States and Europe, which are major importers of organic foods. Australia, as a major exporter of agricultural products, stands to benefit from this expansion in demand. However, little is known about the organic industry by other agribusinesses and little research on organics has been conducted in Australia, especially compared to the United States and Europe. The objective of this paper is to provide a contemporary overview of the Australian organic food products industry, including production, marketing and certification of organic foods. Major supply issues such as the small production base and the low rate of conversion to organic farming and major demand issues such as availability, prices and product integrity are discussed. Areas identified for further research include data collection and reporting of production, consumption and trade of organic products, consumer and producer attitudes towards, and expectations of, organic farming, product integrity and labelling regulation, competition from other sustainable farming systems, and future industry structure of the organic sector. Outputs from the research will provide market information to the organic industry that helps identify marketing opportunities and develop strategies for meeting market requirements and sustaining industry growth.