Are South African growers missing out?

By Anna Mouton

Global sales of organic food increased to nearly 110 billion euros in 2019. The positive impact of COVID-19 on the demand for organic food is expected to translate into even better figures for 2020. But what exactly is organic farming? And should growers see it as a marketing opportunity?

What is organic?

Most people think of organic farming as food production without synthetic agrochemicals — but there’s more to it than giving up pesticides.

Organic farming is a holistic management system that focusses on the health of the entire agro-ecosystem, including aspects such as biodiversity and soil health. In practical terms, organic growers may only use approved, natural products in their orchards, and must therefore employ other methods to maintain fruit yields and quality.

Organic agriculture has been around for nearly a century, but consumer demand for organic food is a more recent phenomenon. Organic — like non-GMO and eco-friendly — has become a buzzword.

But South Africa lags behind our competitors in producing organic fruit, says Hein Coetzee, chief operating officer at TopFruit. While still involved with fruit exports, Coetzee was so intrigued by the lack of local organic produce that he made it the topic of his MBA research project, conducted under the guidance of Dr Lize Barclay of the University of Stellenbosch Business School.

“From a marketing perspective, I had more and more people seeking to buy organic fruit, but we as South Africa had a very limited offering,” recalls Coetzee. “And now, in this day and age of COVID-19, you can be sure that people will definitely buy organic if it’s available.”

Who buys organic food?

Global consumption of all fresh fruit is set to increase. The march of urbanisation continues, and studies have found that city-dwellers eat more fresh meat, fruit, and vegetables than people in rural areas. In addition, data from the United States and Japan show that older people eat at home more often than younger people, and consequently eat more fruit and vegetables. Aging populations in developed countries, therefore, bode well for fruit sales. When it comes to organic food, the typical buyer is female — but so is the typical buyer of non-organic food. At least one study reports a tendency for new parents to start shopping organic when they first buy organic baby food.

Research has found that younger people tend to view organic food more positively than do older people, but older people may be more likely to actually buy organic, possibly because older people have more money, or because they are more concerned about health issues. Consumers of organic food tend to associate health with diet — not surprisingly — and state this as an important reason for purchasing organic food. These consumers are also likely to be interested in environmentalism, animal welfare, vegetarianism, and alternative medicine.

In brick-and-mortar shops, limited shelf space can lead to organic products competing with novel certifications such as non-GMO or Fairtrade, according to Coetzee. A supermarket will allocate shelf space to, for example, apples, and most of that space will be taken up by conventional apples. “There’s not much space left for everything else,” comments Coetzee. “And, at the end of the day, organic is competing with all the other noble causes, like for instance Fairtrade.”

Global market trends

The global market for organic food grew by 55% from 2013 to 2019. Europe and North America account for about 90% of all sales — down from 97% in 2000. Countries such as Brazil, China, India, and Indonesia are becoming increasingly important markets.

We don’t yet have figures for 2020, but we do know that organic food sales in the United States increased by 25% up to July last year, while in the United Kingdom, sales increased by 18% up to June last year. Organic food shops in France reported that their sales have gone up by more than 30% since the start of the pandemic. Perhaps the most convincing evidence for the rise of organic food is the purchase of Whole Foods Market by Amazon in 2017 for USD 13.7 billion. Whole Foods Market is an organic chain store with around 500 outlets in the United States, as well as shops in Canada and the United Kingdom.

Of course, shoppers can now also order organic online through Amazon. Online shopping has boomed during the pandemic, and other online organic retailers have also benefitted, not only in the United States and Europe but also in countries such as India.

How does South Africa compare?

“The demand for organic food in South Africa will naturally be lower because we don’t have as many people in the higher income brackets,” says Coetzee. “But there would also be a greater demand if there were a greater supply.”

According to Coetzee, the major retailers in South Africa are reluctant to stock organic products, due to the lack of consistency in supply. Retailers want a product that is available in all their outlets, for twelve months of the year. However, there is no question about the demand from our markets abroad.

In 2019, organic agricultural imports to the European Union totalled 3.24 million tonnes. Organic temperate fruit accounted for a mere 4% of the imports. Apple and pear imports equalled 38 000 tonnes, or roughly a third of organic temperate fruit imports. By comparison, the volume of organic citrus was 30 000 tonnes, and South Africa supplied 46% of this citrus.

The area of organic agricultural land in Africa has increased from 20 000 hectares in 1999, to more than 2 million hectares in 2019, but only about 30 000 of these hectares are in South Africa. According to Coetzee, most of this land is used for organic livestock production. Of the 154 South African organic producers in 2019 very few are growing fruit.

Does this mean that the South African fruit industry is missing a golden opportunity? Coetzee has some cautionary words. “The motivation for farming organically should be a belief that it’s the right thing to do, and that it can assist in protecting the environment. Organic farming won’t be sustainable if it’s only done for financial gain.”

Having said that, organic practices are becoming increasingly common in conventional farming. “The chemicals that we can use are becoming fewer and fewer,” notes Coetzee. “Whether we like it or not, we’ll have to start taking notice of organic methods.”

Most of the figures quoted in this article were taken from The World of Organic Agriculture: Statistics and Emerging Trends 2021. The report is available as a free download at www.fibl.org/fileadmin/documents/shop/1150-organic-world-2021.pdf.

• To learn more about Coetzee’s research on how South African deciduous fruit producers perceive organic farming, look out for the next issue of Fresh Quarterly, the Hortgro Science technical magazine, available at www.hortgro-science.co.za/fresh-quarterly/.