Organic Packaged Food in New Zealand

PROSPECTS

Increasing distribution and market penetration to drive growth

Organic packaged food continued to exhibit strong value sales growth in 2018, with SKU counts in the category continuing to grow on the back of continuing NPD activity. More importantly for the category, distribution and market penetration continued to grow, improving accessibility of the category to consumers, with increasing numbers of supermarkets growing the number of SKUs they carry in the category.

Organic milk strongest performer

Owing to high price points and increasing levels of NPD activity, organic milk saw the strongest value sales growth in 2018. Increasing levels of penetration from premium brands such as Lewis Road Creamery and Puhoi Valley, as well as Anchor’s launch of an organic variant meant that the category enjoyed high levels of consumer demand and distribution in 2018, driving value sales growth.

Certification scheme expected to be explored

There remains no legislated mandatory regulatory certification scheme for organic food products in New Zealand. Organics Aotearoa New Zealand was heavily engaged in the development of a certification regime with the Ministry for Primary Industries (MPI) during the review period, due to the belief that the unregulated nature of the market has resulted in widespread use of the term organic in the domestic market.

COMPETITIVE LANDSCAPE

Goodman Fields Leads Category

Goodman Fields maintained and improved its leading value share by a percentage point in 2018 on the strength of the combined value share of its Naturalea, Meadow Fresh and Puhoi Valley brands in organic dairy. Owing to the strength of its performance in organic dairy through its Anchor Organic range of drinking milk products, as well as Mainland Organic cheese, second-ranked Fonterra Brands (New Zealand) improved its value share slightly as well.

Local player Ceres performing well in the organic field

Third ranked local player Ceres Enterprises continued seeing strong performance within organic packaged food in 2018, with increasing distribution through supermarket channels driving growth. The company maintained a strong presence across a wide range of categories, including organic biscuits, organic breakfast cereals, organic canned/preserved food, organic chocolate confectionery, organic olive oil, organic rice, organic vegetable and seed oil, organic sauces, dressings and condiments, organic soup and organic spreads.

Private label penetration continues to grow

Interestingly, private label brands continued to expand their presence in organic packaged food in 2018, owing to the widespread consumer demand for it and a changing approach to private label from supermarket retailers, who are increasingly focussed on providing “value” to consumers, rather than “cheap” products. This was achieved most notably through Progressive Enterprises’s Macro Organics range, which is present in a wide range of organic packaged food categories.

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