Investment fund Tanarra Capital has secured its slice of the burgeoning Australian organic sector through the purchases of Barambah Organics and five:am, and Barambah Organics Chief Executive Officer, Matthew Stanton, has been quick to back calls for the introduction of a mandatory standard for use of the word “organic”.
Mr Stanton, who oversees both companies, has worked in leadership positions in the media, beverages and retail sectors, and said the organic industry would fall short of its potential if mandatory regulation was not swiftly established.
“People who are making the claim their product is organic without being accredited are taking genuine organic buyers away from companies doing the right thing,” Mr Stanton said.
“Not only are they letting the customer down, the retailers are also being duped as the product may not be what it is labelled to be.”
At a national level, the issue is being assessed by the Organics Industry Advisory Group, which was established in December 2020 by the Department of Agriculture, Water and the Environment, as requested by the Federal Minister for Agriculture, David Littleproud.
Australian Organic Limited (AOL) Chief Executive Officer, Niki Ford, who is a member of the group, said the lack of a national standard meant Australia was lagging behind the rest of the world.
“Australia is one of the only developed nations without a mandatory standard for use of the word organic,” Ms Ford said.
“Not only does this make it difficult for our exporters to reach emerging markets, as they are being forced to pay separate in-country fees, the customer could be misled at the supermarket till.
“It is essential that anyone paying for a product has peace of mind it is exactly what it claims to be on the label.”
The Australian organic sector currently contributes more than $2 billion to the national economy and was poised for an annual growth of 14.6 per cent.
Mr Stanton said this potential attracted Tanarra Capital, and himself, to the organic dairy sector with the purchase of Barambah Organics.
The Australian-owned integrated dairy business was founded in 2002 by the Campbell family, which retained 20pc equity at the time of Tanarra Capital’s acquisition in October last year.
The operation practices low-stress stock management across its three farms at Goondiwindi in Queensland and Raleigh in NSW, and boasts a carbon-offset forest within the property portfolio.
“There is a macro trend working for the industry of consumers being drawn to organic products as they are free from chemicals and pesticides, and there is also a trend of people wanting to purchase from companies with environmentally-focussed sustainable business models,” Mr Stanton said.
“Organic production perfectly marries these two mega and this will drive overall growth.”
Last week, the company increased its investment in the organic market further with the acquisition of organic yogurt company five:am in a strategic move to compliment Barambah’s geographies, channels and brand differentiation.
“Barambah and five:am don’t use chemicals, or pesticides, so the consistency of the end product is better as its naturally sweeter making the taste remarkable,” Mr Stanton said.
Baramabah Organics and five:am use The Bud trademark logo on all of their products, which has been obtained through organic certification by ACO Certification Limited.
Ms Ford said The Bud was well positioned in the Australian and international markets as it already had widespread consumer recognition.
“Our research indicates consumers already see The Bud as a symbol of authentic organic goods, it’s a well-known logo for certified products here and around the world.”