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US organics financier Robyn O'Brien says there is huge unmet demand for organic food.
Costco's planned opening in New Zealand is an opportunity for Kiwi organic food producers to break into the United States market using the giant retailer's distribution network, the industry has been told.
Robyn O'Brien heads rePlant Capital, a US company that funds cash-strapped US farmers to convert to organic production.
The US has the largest market for organic produce globally, and it's growing rapidly. But with just one per cent of US farmland dedicated to organic production there is a gap between demand and supply, O'Brien said.
New Zealand's organic producers have an opportunity to step in and supply the US market, and Costco's recent announcement that it would open a store in Auckland could be one way in, she said.
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"I understand that there would be mixed feelings about a large US retailer coming into New Zealand. But it's the largest organic distributor in the US and I think it does present an enormous opportunity. Whether we like it or not we are now part of this global pact," O'Brien said.
There is money to be made in organic exports she told MPs last week, on the way to speaking to organic wine producers in Blenheim.
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Robyn O'Brien says New Zealand should look to supply the huge market for organics market in the United States.
In particular, she urged New Zealand to adopt organic standards, especially for export, and said organic farmers need to wake up to the huge market for their produce in the US.
"Eighty per cent of US consumers are trying something organic every single day. Seventy-five per cent of our categories in the grocery stores are providing organic choice," she said.
But without certification, the risk for importers was too high, O'Brien said.
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Leveraging Costco's supply chains could be a foot in the door to the US market for organic producers.
National standards for organic produce are on the horizon.
Food Safety Minister Damien O'Connor said that following consultation, a bill was being developed. It was likely to be introduced in the second half of the year, before going to a select committee.
O'Connor told Stuff in May that the development of an export standard was paramount to provide certainty to trading partners, and he wanted to see the country positioned as a premium organic producer in the international market place.
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Bostock already exports organic apples to the US, where they're sold at Costco.
The standards would plug a hole in the country's organics reputation as New Zealand was one of only two countries in the top 25 organic markets that did not have national standards.
New Zealand already exports around 60 per cent of its organic produce, according to Organics Aotearoa New Zealand.
According to the Organic Exporters Association New Zealand exports $140 million worth of fruit and vegetables, and $100m worth of dairy, meat and wool. Organic wine exports bring in $47m, and processed organic foods $28m.
SUPPLIED
Food Safety Minister Damien O'Connor visits organic retailer Common Sense Organics in Wellington for Organics Week.
O'Brien said that as more US retailers, like Clif Bar, came to New Zealand the opportunity to leverage the supply chains of any existing relationships should not be overlooked.
O'Brien was also working to increase US organic production.
"What we realised is that farmers are completely cash strapped, especially in the United States, but globally. Farmers that are wanting to convert their farmland don't have the capital to convert it," she said.
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Organic produce at the Opawa Farmers Market.
The firm taps philanthropic money and marries it with technical expertise from other farmers and their experience and brings in a guaranteed buyer.
"Right now there are a massive amount of lawsuits, 13,000 on deck in the United States, against the manufacturer of glyphosate. So it's creating an incredible opportunity and farmers are waking up and saying 'our soil is not healthy, how can I build healthier soil, and most importantly if I make these changes, who will buy it'."
Green Party organics spokesman Gareth Hughes said he was glad to see that significant funding for sustainable land use in the 2019 Welfare Budget had been allocated, of which organics would be a component.
"The latest market report saw a 42 per cent increase in organic exports over a two year period and many farmers will be looking at this valuable, fast-growing niche," he said.
O'Brien said the market was only going to get bigger as food giants like General Mills, Hormel, Nestle, Danone and Mondalez make acquisitions in the organic sector.
"If we continue to make the case [for organics] at the global level, the consumer level and the farm level, it's amazing what change can happen. At every level of this amazing country, the opportunity is in front of us today," she said.
Stuff
