Business Capstone Project For Sewage Discharge Materials: Organic Market And Customers’ Trends

Introduction to Literature Review

Discuss about the Business Capstone Project for Sewage Discharge Materials.

Organic products are the products grown without the utilization of pesticides, synthetically made chemical agents, sewage discharge materials, radiations, organisms with modified genes. The organic products from animal origin are devoid of any harmful chemicals, or other substances as the animals are not treated with growth enhancing hormones or antibiotics. Thus, organic farming is the technique that involves producing food and substances naturally (www.marketwired.com 2016).

The world population is increasing day-by-day and provision of food and related requirements may get difficult subsequently. Moreover, the use of chemicals, pesticides, radiations and other means that are applied for production of food in modern industry is adding to the cause of environmental degradation (www.unctad.org 2016). The harmful agents are disrupting the flora and fauna balance, human health is getting affected largely. Now, sustainable methods for cultivation of crops and other food products is a necessity to save the world and its habitants from further damage. The organic farming for food production is a major step towards green revolution and sustainable development.

There are few considerations for cultivation of organic food products. The market for organic product globally as well as individual lands , market size, the consumers and their present trends towards the organic food consumption, demand and supply of the food products grown naturally and production of the organic food staff are given in the below mentioned literature review. 

According to Alexandratos and Bruinsma 2012, the total land available globally is about 13.4 billion hectare. The agricultural land constitutes of about 1.5 billion hectares. The land available currently for organic agriculture is approximately, 37.2 million hectares.

According to Willer, Lernoud and Schlatter 2014, Oceania constitutes of about 12.2 million hectares of land, which is the world’s most organic agricultural area. The developing countries account for about one third of this agricultural area. Despite the reductions in world economical condition, the sales of organic products increase consistently. Australia comes under Oceania region. Though Oceania region accounts for the world’s largest area for organic agriculture, yet its significance is reducing. The organic market is comparatively small in Australia. It contributes about less than 2 percent of the global market for organic products.

According to Australian organic market report 2014, the consumption of organic products in Australia is reaching heights.  Beef and dairy are held as the fastest growing organic product in this sector. Among others, dairy products have shown highest growth ($113m), second highest growing product is beef with worth of $198m. Overall export of the organic food substances has shown a significance increase in growth from 2012 to 2014.

Organic Market

According to the United Nations Conference on Trade and development report 2014, 80 percent of the total organic farmers are in developing countries. The organic food product sales contribute about 60 billion dollars to the global economy each year (www.unctad.org 2016).

Strength: The organic market in Australia is growing consistently and the demand of the organic products is increasing day-by-day. Hence, it will be beneficial to the Capstone Project.

Weakness: Oceania region accounts for the world’s largest area for organic agriculture, yet its significance is reducing.

Hypothesis: The organic market is developing and it will prove to be beneficial from the perspective of the business as the organic market growth rate is increasing rapidly in Australian market.

Conclusion: Australia comprises of the largest organic cultural land, the market growth is also reaching heights, hence by considering the importance of the land, it is concluded that the business will do well in the market.

According to a research by Marketwired 2016, the global market for organic products is analyzed and expected the by the end of 2020, it will reach 2111.44 billion in US dollar. It has been studied that there is an increase in consumer awareness about the harmful effects of the food staffs prepared from toxic substances. The market size of the organic products increases subsequently. Statistics say that in 2013, about 35 percent of the shares in revenue was accounted by the organic fruit and vegetables market in 2013. It is expected that in the near future the market size of the poultry, meat and fish will be higher than 13 percent with the increasing trends in the organic products consumption. Non-beverage food articles like rice, soybeans, oats comprises of 43 percent of the global organic market and it is forecasted to have a growth of more than 23 percent. The world market for the beverages like coffee and tea is anticipated to grow over 20 percent. The market size of the organic processed and frozen food products will likely to have a growth of 11 percent in the future (www.marketwired.com 2016).

As per the Nutrition Business Journal, the sales of the organic products were expected to witness a growth of US$11 billion in 2004 to US$27 billion in 2012. This forecast was made in lieu of the increasing rate of agriculture and consumption of the organic products in the world market (Dias et al. 2015).

According to International federation of organic Agriculture Movements (IFOAM), it had  been estimated that there would be a market growth of US$20 billion( 2001) to US$62.9 billion (2011) globally. Australia was ranked as the highest state containing agricultural land. Moreover, it was estimated as one of the potential market of the world in organic products (Willer and Lernoud 2013).

Market Size

The data on Australian organic industry statistics provides mix information supplied by Australian Quarantine and Inspection service. According to the analysis by IBISWORLD, since the last five years, organic farming practices have been held as economically the highest sector contributing the world economy. The revenue from the organic sector is estimated to grow in the coming years (Mitchell 2012).

Strength: The market size and the sales rate are likely to grow further.

Weakness: Presently, the market size is small in Australia.

Hypothesis: The Capstone Business project will be benefitted with the up gradation of the industrial scale as the present status of the organic industry in Australia is small scale in nature. Therefore, by up gradation, the business will grow.

Conclusion: Though currently Australia has small scale industrial developments in organic sector, it is evident from the reports that the organic products sales rates have increased and hence there are higher predictions of the growth in organic market size. In this way the project also gets benefitted.

According to the Australian organic market report, a huge transformation had been observed in non-organic product consumers and an increase in purchases of organic products has been reported. It increased from 24 percent to 40 percent in 2014. The organic food having authentic certification is consumed by one third of the customers in Australia (Ferguson, Pinnuck and Skinner 2014).

According to Shafie and Rennie 2012, there is an increase in the interest towards organic product irrespective of the age, income and education of the consumer segment. The price of the organic product is a major factor that is predominantly holding back the consumption of the organic substances. The shift towards the organic sector is due to the global concerns about the harmful and toxic substances found in the conventional food products that lead to major health issues and becomes a point of agony among the customers.

According to a survey report, about one third of the customers have shown interest in paying for the organic food products as they have a better safety profile. It has been reported that a majority of the United States population have shifted towards the organic product consumption and hence an increase in the sales of the organic articles is evident (Lee and Yun 2015).

A recent study revealed that a number of strategies required to be adopted to ensure safe consumption of the organic food products. Appropriate labeling of the food product, public awareness program regarding the organic food product and benefits of the use of the articles are important elements need to be recognized by the consumers of the organic product and non-organic consumers as well (Teng and Wang 2015).

Customers

Strength: There is an increase in the interest towards organic product irrespective of the age, income and education of the consumer segment. They are socially more aware about the environmental degradation and hence choosing the organic food products for enhancing their longevity

Weakness: The prices of the organic products are comparatively high and a major barrier to consumption of the products.

Hypothesis: Reasonable prices of the organic products will attract more consumers towards consumption of organic foods that will be beneficial to the project as well.

Conclusion: The consumers are well aware of the sustainability issues and are shifting towards the organic product consumption. However, the prices are high and are sometimes unaffordable to all the societal classes. It is concluded that with price reduction the consumption rate will be higher, so the business will increase in terms of sales rate. 

Urbanization has a great impact in the forthcoming demand and supply of food products worldwide. In case of an abrupt increase in urbanization, the availability of the dietary components will be limited, if the state has reached to its maximum in terms of economic stability. The countries contributing greatly to the processing sector also face greater need for organic food product demand. The factors playing vital parts in influencing the demand are price, quality of products, origin of the product and the food labeling and social objectives. There is an increasing demand for fruits, meat, oils, herbs and various spices (Carolan 2016).

Hines 2014, states that an appropriate approach is required for establishing proper supply chains of the organic products. It should be based on customer-oriented supplies and in accordance with the overall market scenario. The major challenge is the expenses of the products. It needs to be ensured that the customer demands are met adequately.

Security for food is a worldwide issue at present, followed by a decrease in stocks of food articles and the prices increased sharply. The crisis period has passed apparently but there is a lack in the initiative required for the raising the awareness towards the relevant issues. This might be due to the prevailing pressure of increasing population, rapid increase in demand. The unfavorable climatic conditions are a constant threat to the supply and production of food substances to fulfill the needs of the growing population. Thus, Australia being an exporter in food substances has greater impact of the food scarcity and escalation in the prices of the products. Food security was considered as a major issue and a problem that needs public attention in Australia (Dibden, Gibbs and Cocklin 2013).

Phosphorus has a great importance in production of food. It cannot be replaced by some other elements. It has a greater role in meeting up the feeding demands of the population worldwide. However, if this continues, it will lead to huge demand of the phosphorus, cropland, dairy products, food and beverages. It is estimated that by the end of 2040, the phosphorus resources will be depleted and hence, supply will be decreased. The demands for food cannot be met eventually. Therefore, this situation necessitates the emergence of a measure for optimal and balance use of phosphorus in food industry to maintain the demand and supply chains (Cordell and White 2013).

Strength: Demands in the markets for organic products are increasing constantly.

Weakness: It is analyzed that if the current demand and supply of the organic food products are not met adequately, there will be decrease in growth of the organic sector globally.

Hypothesis: The supply rates should be high in situations of high demands and low when the demands of the products are decreased.

Conclusion: The organic products are in high demand, the supply chain must meet up the demands and this will bring an overall growth of the organic market. The business project will eventually have higher demands of organic products. 

Agriculture is highly sensitive to changes in climatic conditions. The changes are due to natural calamities or sometimes they are manmade. Thus, climate has a major impact on crop production. This affects the livestock and health. It also creates an alteration in the pattern and balance of the food and food products trade. It also affects the supply of food products and their prices. Therefore, more information and data are required for forecasting the climatic changes (Wheeler and Von 2013).

It is necessary to adopt such an agricultural system that is highly productive as well as reduces the anticipated risks to the environment and human lives. The sustainable methodologies have emphasized more on minimization of the costs and contamination of the environment (Ponisio et al. 2015).

Seufert, Ramankutty and Foley 2012, states that it is important to consider sustainable technique as an important tool for production of crops. The benefits of organic farming must be understood from the perspective of social, economic and environmental backdrop. The organic yield rates are a part of the social, ecological and economical benefits, yet it is accepted universally if it has some sustainable developmental basis.

In spite of the advances in the production and research in the agricultural field., approximately, 1 billion population are in acute need of food, insecurity of food is global cause for agony. (Girard et al.  2012).

Strength: More information and data are required for forecasting the climatic changes. This would be beneficial to the food industry and help them cope with the difficulties that are likely to be encountered under unfavorable conditions.

Weakness: Agriculture creates a great stress on soil, water, atmosphere and biodiversity. If the current scenario persists then this would lead to more exaggeration on the natural sources. The limitations are the yield rate of the products.

Hypothesis: Strategic approach towards improving the production rate and accessibility of the food universally to all classes of the society is necessary for further development.

Conclusion: Climate changes play an important role in agriculture, by adopting proper measures the production and yield can be increased to fulfill the requirements of the consumers and food insecurity can be eliminated. The business will grow financially with increase in production and yield of the organic products and will be able to meet the market demands. 

Conclusion

Australia was ranked as the highest state containing agricultural land. Moreover, it was estimated as one of the potential market of the world in organic products (Willer and Lernoud 2013).

There has been a huge transformation in non-organic product consumers and an increase in purchase rates of organic products has been reported (Ferguson, Pinnuck and Skinner 2014).

Agriculture is highly sensitive to changes in climatic conditions. Climate has a major impact on crop production. This affects the livestock and health. It also creates an alteration in the pattern and balance of the food and food products trade.

It is important to consider sustainable technique as an important tool for production of crops. The benefits of organic farming must be understood from the perspective of social, economic and environmental backdrop.

An accurate step towards increasing the production of the organic food products will help framing proper supply channels of the products and also ensure that the prices are kept reasonable. Eventually, there will be high demand that could be met adequately. It is highly crucial to create awareness and enlightenment among the people regarding the organic product consumption and ill effects of the food items containing artificial harmful chemicals and adulterants. This would help in maintaining the ecosystem and safeguard our planet from further depletion.

Hence, the Business Capstone project will be able to meet the market demand.

Reference: 

Alexandratos, N. and Bruinsma, J., 2012. World agriculture towards 2030/2050: the 2012 revision (No. 12-03, p. 4). Rome, FAO: ESA Working paper.

Carolan, M., 2016. The sociology of food and agriculture. Routledge.

Cordell, D. and White, S., 2013. Sustainable phosphorus measures: strategies and technologies for achieving phosphorus security. Agronomy,3(1).

Dias, V.D.V., Schultz, G., Schuster, M.D.S., Talamini, E. and Révillion, J.P., 2015. The organic food market: a quantitative and qualitative overview of international publications. Ambiente & Sociedade, 18(1).

Dibden, J., Gibbs, D. and Cocklin, C., 2013. Framing GM crops as a food security solution. Journal of Rural Studies, 29.

Ferguson, C., Pinnuck, M. and Skinner, D.J., 2014. The evolution of audit market structure and the emergence of the Big 4: Evidence from Australia.Chicago Booth Research Paper.

Girard, A.W., Self, J.L., McAuliffe, C. and Olude, O., 2012. The effects of household food production strategies on the health and nutrition outcomes of women and young children: a systematic review. Paediatric and Perinatal Epidemiology, 26(s1).

Hines, T., 2014. Supply chain strategies: demand driven and customer focused. Routledge.

Lee, H.J. and Yun, Z.S., 2015. Consumers’ perceptions of organic food attributes and cognitive and affective attitudes as determinants of their purchase intentions toward organic food. Food quality and preference, 39.

Mitchell, E.W.A., 2012. Organic Farming in Australia1. the world of organic agriculture.

Ponisio, L.C., M’Gonigle, L.K., Mace, K.C., Palomino, J., de Valpine, P. and Kremen, C., 2015, January. Diversification practices reduce organic to conventional yield gap. In Proc. R. Soc. B (Vol. 282, No. 1799, p. 20141396). The Royal Society.

Seufert, V., Ramankutty, N. and Foley, J.A., 2012. Comparing the yields of organic and conventional agriculture. Nature, 485(7397).

Shafie, F.A. and Rennie, D., 2012. Consumer perceptions towards organic food. Procedia-Social and Behavioral Sciences, 49.

Teng, C.C. and Wang, Y.M., 2015. Decisional factors driving organic food consumption: generation of consumer purchase intentions. British Food Journal, 117(3), pp.1066-1081.

Wheeler, T. and Von Braun, J., 2013. Climate change impacts on global food security. Science, 341(6145).

Willer, H. and Lernoud, J., 2013. Organic Agriculture Worldwide: Key results from the FiBL-IFOAM survey on organic agriculture worldwide 2013. Slide collection.

Willer, H., Lernoud, J. and Schlatter, B., 2014. Current statistics on organic agriculture worldwide: Organic area, producers and market. The World of organic agriculture. Statistics and emerging trends.

www.austorganic.com, 2016. Available at: https://austorganic.com/ao-market-report/…..Australian organic market report [Accessed 21 Sep. 2016].

www.marketwired.com, 2016. Available at:  https://www.marketwired.com/press-release/organic-food-beverage-market-size-projected-reach-21144-billion-2020-grand-view-research-2127306.htm [Accessed 21 Sep. 2016].

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