Hungry for Organics

 

Theresa Sjoquist explores what’s behind the supply and price of the organic food we buy, and how we might improve the range and reliability at a reasonable cost.

If organic food lovers  make any complaints, they are most often that organic food is expensive, and, it is hard to find, especially a consistent supply. Consumers could have a significant effect on both of these generally accurate complaints if they understand how organic food supply works and what producers face in getting their product to your plate.

Supply and Demand

If demand exists, supply follows, although demand needs to be substantial and consistent, to allow suppliers to factor in production costs, wastage, and the difficulties of introducing new products.

Suppliers typically complain of sourcing difficulties, inconsistent supply, lack of demand, or quality issues.

Gladfield’s malt producers recently announced their intention to deregister organic certification. Demand was insufficient, despite the low production required to justify certification.  Unless local brewers import organic malt, this lack of demand could mean no more organic New Zealand beer.

 

Mike Murphy from Kokako, says. “We are seeing more organics in mainstream supermarkets, but they’re often segregated to their own fridge or section. It’s good to see recent ‘mainstreaming’ of organic dairy options such as Green Valley, Lewis Road and Puhoi.  While the exponential growth of organics in the consumer sector is currently catered for by more organic-only supermarkets, we need to increase the availability of organic produce through conventional retailers. Some mainstream supermarkets have championed this well and this might eventually influence other retailers, in order to compete.”

Pricing and Value

Addressing the cost to the consumer, John Stokes from The Produce Company says, “Suppliers have tried various pricing options over the years. “If you match a similar price to conventional produce you’ll sell more, but the costs to grow and supply generally mean this isn’t an option.”

Simon Berry of Whitestone Cheese which in the past produced organic cheeses alongside conventional ones, agrees. “When processing both natural and organic raw milk, effectively you’re running two plants under one roof, which is double the compliance procedures and costs.”

Not all growers understand the intricacies of the supply chain – the cost of adding a line of organic produce next to non-organic means most suppliers need to add extra margin. The knottiest problem organic growers deal with is the route to market. For suppliers, running an organic range alongside a conventional one means more ordering, separate packing locations, more sales rep involvement, more marketing, and separate pricing.

However, some people will pay more for better quality. The Produce Company runs a conventional line of milk, alongside an organic line, both under the Moo Moo brand. “The organic is dearer but has a better coffee story”, says Stokes. “Organic milk holds and stretches more, therefore produces a superior cup of coffee.”

Organic Food Superior but Seasonal

Most chefs find the organic story compelling, so take-up by the hospitality trade sees diners given the opportunity to appreciate the superior quality (taste, colour, satiety) of organic food. Ultimately more people will expect high quality, genuine nutrition when they eat out.

John Stokes says, “Most chefs want to advertise organic produce but if potential supply issues exist, they often shy away.  For wholesalers, coordinating an inconsistent supply is more work, so many choose the easy option. The best way to manage fluctuating or seasonal organic supply, is the way fruit markets used to operate. ‘I have this today. Who wants it?’”

Farmer’s markets and vege box schemes still do operate in this manner, but other commercial suppliers under lean management processes,  can find it difficult to communicate to the market that an organic product will only be available for three days. It may mean a lot of communication, plus extra deliveries, increasing  costs and eventual prices in the market.

Cafes often deal with smaller growers who can’t always supply produce regularly making it difficult to plan menus. Larger organic produce distributors often insist on minimum orders (one crate of each vegetable or fruit). While this works for shelf-stable items such as root vegetables, it can be challenging for chefs when it comes to leafy greens.

Mike Murphy says, “We now work with a conventional produce supplier who has added an organic option to their portfolio of products. They have a sourcing agreement with Purefresh Organics so we can order smaller quantities more regularly.”

Working Together for Variety and Steady Supply

“People buy meat and produce,” says Dave Porter of Harmony Meats, “but they consume meals. Producers joining co-operatives could create economies of scale and allow consumers to buy high nutritional-value meals, so they can eat organic food as a lifestyle, not just sporadically purchase items when they can find them. If organics cannot be kept consistently on the shelf, supermarkets replace it with conventional. Co-operatives offer more stable supply chains and growers can be relieved of marketing and transport issues to concentrate on growing while the co-operative ensures a viable route to market.”

More supermarkets demanding organic product, in combination with greater export demand, such as is occurring with Hong Kong, would mean more product coming through wholesalers, he says, making organic supply economically viable and bringing prices to consumers down.”

Consumer Sea change Needed

“Unless a huge consumer shift in attitude and spending occurs,” says David Alexander of Chantal Organics, “we won’t get the economies of scale necessary to moderate prices, and the existing situation won’t change – at least not quickly.”

Some bigger businesses are able to source large quantities of organic produce for juice manufacture, a fact demonstrating that demand does create supply. Continued demand means availability will improve. Variations in fresh produce available from season to season is a dynamic for which consumers, food manufacturers, cafes and restaurants have to plan, and perhaps might make a virtue thereof.

Having been fed for almost 60 years largely on conventional, industrially-produced food, Western society is addicted to a system which offers produce year-round.  Compromised health is a feature of factory-fed populations, but demand for organic produce will bring costs to the consumer down, and improve health.

Chris Morrison, Co-Founder of All Good Organics, believes it’s important to connect consumers with the people who grow their food. “Transparency of supply chain is crucial. Taking organic food beyond labelling to show how the food is produced and who the people producing it are, helps to demonstrate the real value of organic production methods for producers, the environment, and consumers.”

What Can You Do?

 

Growers and Producers: Consider joining or creating a co-operative for ease of route to market.  The OrganicFarmNZ pod scheme can offer opportunities for small-scale growers to share freight costs.

Suppliers: Organics are making food waves. Get on the train and accommodate the unsteady supply until it stabilises.  It needs your help.

Consumers: Create demand.  If your local doesn’t carry organic, ask for it. Go to where you can get it and your local will have to seriously consider adding organic to its offerings.

 

Published in Organic NZ magazine – May/June 2016 – Vol. 75  No.3