Organic Market and Certification in Hong Kong

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Organic Market and Certificationin Hong Kong

• Hong Kong Organic Resource Centre
• Prof. Jonathan Wong

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Outline of Presentation

• Introduction
• Organic Market in Hong Kong
• Consumer Behavior in Hong Kong
• Why Consumers Not Purchase Organic Food?
• Conclusions
• Suggestions and Recommendations

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Hong Kong - the Metropolis in Asia

• A total of 1042 sq. km.
• Nearly 7 million population
• GDP of 1234.9 billion
• GDP by different sector service 87, industry
  12, agriculture 0.1

4
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Toxic Vegetable Incidents
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• 53 residents care about pesticides in
  vegetables HK Standard
• Poisonous Vegetables increased the publics
  awareness on the benefits of organic vegetables

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WHY Go Organic?

• Increasing health concern of customers
• Over-application of pesticides and fertilizers in
  agriculture
• Increasing pollution in agricultural soils
• Environmental conservation
• Average annual market growth rate of the World is
  high

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In Hong Kong

• The Organic Sector
• is growing

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Number of Organic Farms

• 29 growth from 2002 to 2006
• About 63 farms now

(Source Produce Green Foundation Organic
Directory 2002 2006 Agriculture, Fisheries and
Conservation Department (AFCD) Of HKSAR and
Website of Tai Po Organic Farmers Market)
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Organic Farmland Area

• Average size of organic farms NOT under AFCD
  Conversion Scheme
• ? 10,125 sq m
• Average size of organic farms under AFCD
  Conversion Scheme
• ? 4,396 sq m
• A total of about 33 ha

(Source Agriculture, Fisheries and Conservation
Department)
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Sales of Organic Vegetable is Moving Up
Change in Farm Sales Figure From 2001 to 2003
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Number of Organic Processors

• Including manufacturers, handlers, wholesalers,
  retailers
• 22 growth from 2002 to 2006
• About 61 processors now (excluding the farms who
  engaged in processing and retailing)

(Source Produce Green Foundation Organic
Directory 2002 2006)
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Consumer Behaviour in Hong Kong
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Market Survey 2004

• Aims To understand the consumers purchasing
  behavior, and perception of organic food and
  organic certification in Hong Kong
• Interviewed 495 consumers in HK

(jointly conducted by HKORC and Agriculture,
Fisheries and Conservation Department (AFCD) of
HKSAR Government in Dec. 2004)
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Which Group Higher Tendency to Buy Organic Food?

• Higher education

• Higher family income

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Who are They?

• Managerial and administrative or professional

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Which Types of Organic Food Most Commonly
Purchased?
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Attitudes Towards Organic Food Products

• Majority respondents with positive attitude
• More healthy (77),
• Not using chemical pesticides and
  fertilizers(60)

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HOWEVER Only 30 respondents had the
experience of purchasing organic food in the past
12 months!!!
WHY???
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Consumers Considerations During Food Purchase
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Why Not Purchased Organic Food?

• High Price (Major consideration)
• 65 felt high retail price was the major reason
  for not purchasing organic food
• 60 would switch to organic if the price
  decreases

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Most acceptable price range a higher price, up
by below ¼ of the price of non-organic products
Non Organic Buyers
Organic Buyers
Highly probably NOT purchase
Highly probably purchase
Highly probably NOT purchase
Highly probably purchase
The effect of price difference between organic
and conventional food on the willingness in
purchasing organic for respondents
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Where to Purchase?
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Why Not Purchased Organic Food?

• Limited Retailing Outlets for Organic Food
• 33 of those not purchasing organic food
  indicated very difficult to find retailing
  outlets for organic products
• This information important in setting up the
  marketing network for organic products
• Insufficient choice of certified organic food in
  the market ( 50 respondents)

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Why Not Purchased Organic Food?

• Confused by doubtful claims/labels
• 40 of respondents felt confused by the doubtful
  organic claims!!!

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Labeling Surveys in 2005
(a) 295 vegetables samples
(b) 296 dried fruits and nuts samples
(c) 43 fruits samples
(d) 566 cereals samples
There are various kinds of promotional
claims/statements/labels related to organic
farming or production in the packing of those
samples without organic certification
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Where to find Certified Organic Food?
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Promotional Claims Distribution
The claims on the packages of non-certified dried
fruit nuts samples.
The claims on the packages of the non-certified
organic vegetable samples.
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Promotional Claims Distribution
The claims on the packages of non-certified
organic cereal samples.
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Imported Certified Organic Food
Vegetables
Dried fruit nuts

• 85 certified by overseas certification agents
• 17 certified by China certification agents

• 100 certified by overseas
  certification agents

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Why Not Purchased Organic Food?
Various kinds of promotional claims somehow make
people related these products to organic
production
GMO Free
Organic
Without Pesticides
Natural
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The Need of Organic Certification
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How Organic Labels Affect Consumers Desire to
Buy?
Organic certification helps consumers identify
the genuine organic products. This helps raise
consumers confidence in organic food and
facilitates the healthy development of organic
food market.
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40 of the HK consumers doubt about the organic
claims shown on the product package

• A mere suspicion of the organic claims is good
  enough to turn consumers away.

Question If only an organic claim but no
other explanation on organic is printed on an
organic product, do you believe this product is
organic?
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The Need of Organic Certification

• Protect the consumers rights in buying local
  imported organic food.
• Increase consumers confidence on organic food

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• Established in Dec 2002
• Funded by Agricultural Development Fund of The
  Marketing Advisory Board, Vegetable Marketing
  Organization (VMO)
• Managing the first independent third party
  organic certifier in Hong Kong (HKORC
  Certification Ltd.)

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The Work of HKORC - Certification

• Develop the organic standard and certification
  system
• Established Hong Kong Organic Resource Centre
  Certification Limited (ORC-Cert) to provide
  certification service for farmers and processors

HKORC certification system has been launched in
Jan 05!
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The Work of HKORC - Certification

• Currently, a total of 24 organic farms receives
  our certification
• One organic processor is certified

Organic Produce or Products with not less than
95 of organic ingredients
Products with 70-95 of organic ingredients
Products produced from farmland that applied for
conversion
Organic Seals of HKORC
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The Work of HKORC - Education

• Initiate an extension research and development
  network gathering the key stakeholders to
  exchange information and initiate programs for
  the sectors development

• Educate the farming community and the organic
  sector by organizing seminars, workshops and
  symposiums

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The Work of HKORC - Education

• Enhance information exchange of the organic
  sector by organizing briefings and farm tours
• Educate the public through exhibitions,
  educational talks, community programs

• Record and share important resources related to
  Organic through HKORC website and library

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How To Contact Us?

• Hong Kong Organic Resource Centre
• Tel[phone]
• Fax [phone]
• Emailhkorc_at_hkbu.edu.hk
• Websitehttp// www.hkbu.edu.hk/hkorc/

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The Way Forward

• Demand for organic products in Hong Kong is
  increasing
• Increasing awareness and understanding of
  consumers is important for further expansion of
  organic market
• Price and limited outlets are major
  considerations for consumers
• Confusion claims deter consumers confidence in
  buying organic

• Organic certification can rebuild consumers
  confidence

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The Way Forward

• Better marketing network for organic
• Increase supply through better organic production
• A better product pricing strategy
• Promotion of organic certification

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• Thanks and Questions Please!

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Enquiry

• Hong Kong Organic Resource Centre
• Contact3411-2384(Tel) 3411-2373 (Fax)
• Emailhkorc_at_hkbu.edu.hk
• Websitehttp// www.hkbu.edu.hk/hkorc/

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Where to Buy Organic Food?