Ultra International B.V.
All Eyes On Australia April 7, 2020
Six Reasons Why Australian Naturals Are On The Rise
The soft cultural power of Australian natural essential oils is set to deliver on the most challenging consumer demands of our time. This article reviews why there is no better time to invest in Australian naturals for your next product launch.
Australia is poised to occupy the foremost pedestal of trust and dependability in the global natural essential oils market and cement the meaning of “brand Australia” in the F&F industry with its ever natural-conscious consumers. The country has been a long-time exporter of essential oils; currently, around 90 per cent of its naturals are shipped overseas. The key differential today is our shifting emotional and cultural climate centred around environmentalism, sustainability, personal health, land usage, education, transparency, diplomacy and a renewed call-to-action from the young activist generation for rehabilitated investment into long-term prosperity.
Australia has the potential to deliver against all of our most pressing contemporary geo-political issues, holding a massive opportunity for agricultural innovation through earnest sustainability programmes bedrocked on a stable economy, bountiful tech sector, world-class agricultural schooling, strong social ethics, a fair and honest supply chain and the richest of natural landscapes. The result: a full stock of consistently high-quality, responsibly sourced, cutting-edge natural products to fill (almost) the entire natural palette for buyers.
The recent bushfires were a tragedy, and the world is thinking of Australia right now. For that reason, there is no better time to invest in Australian essential oils to support the regeneration of a landscape that holds such promise for ecological conservation, phytochemistry R&D as well as flourishing future business. This article puts forward the top six reasons why you should keep your eye on Australian naturals and includes a dedicated mini interview with Aaron Pollack, CEO of Golden Grove Naturals based in New South Wales.
Soil
It is well known that Australia’s soils are some of the most nutrient poor in the world due to “the country’s geological stability … and a lack of significant seismic activity”, as confirmed by the Australian Government Agriculture Office who expand that “only six per cent of the Australian landmass is arable. Large volumes of water are required from both surface and groundwater supplies. Australian soils are highly dependent upon vegetation cover to generate nutrients and for stability”.
What the soil lacks is made up for in farmer knowledge and responsible upkeep of essential nutrients over time, speaking to a wider culture of historically conscientious ground management that contrasts significantly with farming neighbours like Indonesia, for example, where malpractice is still a challenge. Despite the ecosystemic handicaps, “Australian farmers have historically achieved strong productivity growth, increasing the volume of output produced from a given set of inputs. Agricultural productivity growth has been comparable to competing farmers in other high-income countries and faster than other sectors of the Australian economy … driven by improvements in technology and structural change”, as per the Department of Agriculture (see figure below).
Biodiversity
Even in the face of climate change, Australia remains one of the most biodiverse countries in the world, with the Ecological Society of Australia detailing estimates that count “up to 10 per cent of all species on earth” to occur in Australia as “one of the world’s “megadiverse” countries … [with] 1,350 terrestrial vertebrate animals found nowhere else, and more than 90 per cent of the 17,580 species of flowering plants endemic”.
Managing Director of the Ultra Group Ravi Sanganeria believes that “the breadth and depth of what can be grown as well as the vast size of Australia is a huge market strength …Australia can provide 70-80% of the world’s essential oil catalogue”, evidenced in Golden Groves’ growing portfolio and recent introduction of lavender oil following continuing rounds of research and development.
Even in the face of climate change, Australia remains one of the most biodiverse countries in the world, with the Ecological Society of Australia detailing estimates that count “up to 10 per cent of all species on earth” to occur in Australia…
Economy
Australian farming is known for its self-sufficiency, contributing +2 per cent over America to the GDP at the level of the farm, allowing funds to be more tightly resourced and allocated and giving independence and power to the farming industry. In 2017, 85 per cent of farmers’ incomes came from production sales, 11 per cent from off-farm business activities and only 0.6 per cent from grants and relief funding.
The National Farmers’ Federation of Australia notes in a 2017 report that “the agricultural sector, at farm-gate, contributes 3 per cent to Australia’s total GDP. The gross value of Australian farm production in 2016-17 was $60 billion … Australia’s farm exports earned the country $44.8 billion in 2016-17, up from $32.5 billion in 2010-11”.
Politics
Compared to many of the world’s top competing farming economies, Australian politics is relatively stable and remains committed to sustainability that is being rightly recognised as an absolute requirement and not a marketing choice anymore. In the same report, the NFF details how they view “Australian farmers [as] frontline “environmentals”, owning, managing and caring for 48 per cent of Australia’s land mass. Australian primary industries have led the nation in reducing greenhouse gas emissions intensity — a massive 63% reduction between 1996–2016”.
Also noted was the decrease in water consumption “in 2014–15 by 7% from 2013–14. The largest decrease in water consumption was in the agriculture industry. Since 2011, areas managed for conservation have continued to expand, to about 18% of Australia’s land area”.
Education
In our interview, Mr. Sanganeria acknowledged that “the biggest obstacle in doing business in Australia is the high labour and production costs … To be successful in Australia you have to be mechanised with a large initial investment and shrewd labour management that targets business areas most in need”, yet countered the challenge with its positive shadow – “that said, Australia’s field managers are very well-educated and therefore productivity and efficiency are much, much higher than markets with comparable crops; there is greater traceability and accountability in operations, too”.
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n evidence, Southern Cross University just launched what they describe as “the world’s first degree in regenerative agriculture, aimed to equip land managers in tackling the impacts of climate change … It will develop specialist knowledge in a whole-of-system approach to farming … distribution and production, examining human ecology, agro-ecology, regenerative agronomy, soil management and planning rural landscapes”, starting in February 2020. Cutting-edge education programmes such as these that integrate applied science with new technology have “enabled Australian agriculture to stay a step ahead of our international competitors — returning average productivity growth of 2.7 per cent a year over a 30-year period”, as reported by the NFF.
Branding
Mr. Sanganeria presents a compelling case for what Australia’s brand stands for today: “your investment really pays off in Australia … the agricultural economy is stable and backed up from multiple touch points – scholarship, government, natural resources and regulation. Their quality assurance an
d trade rules are world-class, holding a premium brand in the industry that stands for ethical trade and the highest quality … Australia is one of those countries that ticks all the boxes for merchants, preserving stringent standards for paperwork and authentication. From an investment standpoint, as well as a consumer branding standpoint, it is secure and profitable”.
The F&F industry is arguably currently underutilising Australia’s brand potential. Shrewd brands will spot the soft cultural value that Australian essential oils offer to today’s health-conscious, sustainability-demanding consumer and use the R&D platforms that the country is able to fulfil to pave innovation and set an example for best-in-class practice in natural sourcing that other farming nations can aspire to in the future.
Eddie Bulliqi