R&D Plan For the Culinary Herb Industry 2000 - 2005

After having perused this R&D plan, you may wish to reply through the Questionnaire

1 Purpose of the Plan

2 Vision Statement

3 Industry Profile

4 Key Issues for the Industry

5 Recent and Current R&D

6 The R&D Program for 2000-2005

OBJECTIVE ONE - To understand, strengthen and develop markets

OBJECTIVE TWO - To improve existing products and develop new ones

OBJECTIVE THREE - To provide profitable and sustainable production systems

OBJECTIVE FOUR - To enhance the human capital of the industry

Questionnaire

Contacts

1 Purpose of the Plan [Back to the top]

This R&D plan has three main purposes:

• to present the rationale for the culinary herb R&D program that RIRD/HRDC will support and manage on behalf of the Commonwealth government and the industry;
• to provide clear signals to the industry, to Commonwealth and State governments and to the research community regarding R&D needs and priorities for the period 2000-2005, and
• to encourage discussion that will enable the needs of the industry to be further defined and responded to as the industry progresses.

It is an interim plan in the sense that it is the first one developed for the industry. It is therefore envisaged that it will be revised from time to time as research needs and priorities change.

The plan stems from a workshop held in Canberra in September 1999 at which eight members of the Australian Culinary Herb Growers' Association identified and prioritised what they believed to be the industry's main R&D needs and opportunities. Their ideas are being/ have since been discussed extensively within the industry and, where appropriate, modified and extended. As a result of this consultative process, the plan will embody/now embodies inputs from more than XXX industry participants and researchers.

2 Vision Statement [Back to the top]

A profitable and environmentally sustainable culinary herb industry that is founded on the reliable supply to both domestic and overseas markets of consistently fresh, safe and high quality products. The industry will be united by and served by an effective industry association that fosters communication and addresses issues such as promotion, product quality, education and training, and R&D.

3 Industry profile [Back to the top]

Hard data are lacking but the gross farm gate value of the industry in 1998/99 is estimated to be between $25 and $30 million dollars.

Changes in Australia's ethnic mix and lifestyle have greatly increased demand for fresh culinary herbs and the industry has grown rapidly in both magnitude and diversity to meet this demand.

Victoria and Queensland are the major producers but significant production occurs in Western Australia, South Australia, New South Wales, Tasmania and the Northern Territory. The industry is thought to have about 40 to 50 significant commercial participants but there is an unknown number of cottage industry and backyard growers too.

The industry essentially comprises:

• Market gardeners: who produce vegetables and herbs such as parsley, continental parsley, coriander, mint and dill on an all year round basis. They are typically family owned businesses, cultivating up to 40 ha and having up to 10% of their holding under culinary herbs. They are frequently locatted on urban fringes close to central market precincts. Market gardeners produce 30-40% of Australia's fresh herbs.
• Specialist herb growers: who have holdings of 1 to 10 ha and employ up to 20 staff and may also produce dry herbs. These growers account for 15-20% of production.
• Primary industry participants and horticulturists: who grow herbs in some years and in some seasons to diversify their business mix, provide continuity of employment for staff, or, as in Queensland for example, to capture seasonal price advantages. These growers account for 15-20% of production.
• Cottage industry and lifestyle growers: who have holdings of less than 1 ha, may rely entirely on family labour, and may sell only locally or direct to the public. These smaller growers account for 10-15% of production.

Turnovers range from a few hundred dollars a year for backyarders to more than a million dollars a year for major players. A 3 ha holding specialising in herb production occupies four people and typically produces herbs worth about $200,000 a year. Gross margin analyses for several herbs are provided by Fletcher and Fraser (1998) and by Ruben and Fikke-Rubin (1998).

Production is typically labour intensive but hydroponic production, which accounts for about 5% of Australia's fresh herb production, is capital intensive. Most production occurs close to markets, with about 90% of it being sold as fresh herbs. Some herbs are sold door-to-door or in flea markets, often on a cash basis.

Some producers add value by improved presentation and by packing that extends shelf life. However, the benefit that accrues may be better market positioning rather than improved price. A few growers dry their products or make them into pastes and it is this section of the market that is expanding and involving commecial players.

While there are significant imports of dried herbs (about xxxx$ million year date and source of data,) no fresh herbs are imported.

4 Key issues for the Industry [Back to the top]

A SWOT analysis (Appendix 1) indicates that to be profitable and sustainable in the broadest sense, the industry must address the following key issues:

The recent growth of the industry has been driven by demand, with both the sophistication of Australian tastes in food and the interest created by television shows fostering and directing this demand. As this situation may not continue, the industry needs to look to its future by identifying opportunities for differentiating and adding value to its product. This particularly so as the food industry is constantly evolving and adapting new technologies to do with freshness, flavour, variety, food safety, and convenience. The culinary herb industry needs to look for supply openings in food manufacture, in import substitution and in exports. Improved market awareness will need to be supported by a better understanding of customer attitudes and by promotion to educate customers in herb use and to project an image of quality, consistency and reliability of supply.

In the long term, there is a need to devise and adopt production systems that are both profitable and ecologically sustainable. There are many gaps to filled by generating new knowledge, by devising better ways of doing things and by making existing and new production information more readily and more widely available. Much agronomic advice is currently based upon historical sources, some of which are of doubtful merit, and on temperate climate sources. The move towards accredited, sustainable production systems cannot be ignored.

Given that the industry's principal products are perishable there is much to be done to ensure that these products reach the end-user in good condition. Much of this matter relates to the industry educating the various linkages in the supply chain about handling fresh herbs but R&D has a role to play in defining and devising packing and handling regimes that will extend shelflife and assure food safety because retailers and end-users to date have shown little response to such information. The industry must create and implement strtegies that will extend shelflife and assure food safety but which do not rely so heavily on those parts of the supply chain.

The industry is fragmented and widely scattered across the country. It lacks an effective organisation to speak for it and to attend to matters of common interest and concern such as representation to governments, promotion and R&D. Hard facts on the value and composition of the industry are lacking, as are mechanisms for disseminating information and improving skills.

5 Recent and current R&D [Back to the top]

Since its inception in 1990/91, RIRDC has supported the following projects and activities:

• HEM-1A Prospects for herbs and spice production in Australia (1991)
• UNE-30A A commercial herb industry for northern NSW - an infant industry ( (1992/94)
• FHC-1A A workshop to develop a strategic plan for the Australian herb industry (1993)
• DAQ-170A/DAQ-194A Callide valley herb and spice trial (1994/98)
• DAV-89A Postharvest handling and packaging of culinary herbs (1994/95)
• DAN-116A Development of the herb and essential oil industries (1995)
• DAV-103A Value added culinary herbs (1995/99)
• LWP-1A Broad acre dried herb production (1995/99)
• HFA-1A An introduction to herb growing (1997/98)
• OHG-1A A technical support package for the development of the Australian herb growing industry (1998/2000)
• DAN-179A Determining whether pesticide application rates for culinary herbs meet MRL requirements (1998/99)
• WS99- An R&D planning workshop for the culinary herb industry (1999)

Copies of the Final Reports of most of these projects are available from RIRDC (02 6272 4819) or may be viewed at www.rirdc.gov.au.

6 The R&D Program for 2000-2005 [Back to the top]

Through four research objectives, the program addresses the key industry issues of:

• Market trends and opportunities for new and improved products
• Postharvest handling and distribution
• Profitable and sustainable production
• Industry structure and information flow

An industry survey has identified xxxxxx and yyyyyyyy as priorities for R&D in the early phases of this plan (insert xxxxxx and yyyyyy after industry questionnaire completed). These priorities will be revised from time to time in light of advice from the industry.

Each research objective is under-pinned by suggested strategies and by targets and performance indicators by which progress can be judged. The R&D plan seeks to provide general guidance rather than give detailed prescriptions about what needs to be done and how to do it.

The objectives should be regarded as complementary and having flexible boundaries that enable the key issues for the industry to be addressed effectively via more than one strategy.

The effectiveness of the program will depend greatly on the industry's support for it and its involvement in both project design and execution.

OBJECTIVE ONE - To understand, strengthen and develop markets [Back to the top]

Background

The industry is currently demand driven, with most but not all participants having a reasonable understanding of the current market position and likely short-term trends. However, the industry needs to have a feel for how to strengthen its present position and, particularly, how to prepare for the future should current demand for fresh herbs slacken or the trading enironment change.

Strategies

• Identify and evaluate opportunities for supplying, fresh, partly processed and processed herbs to sectors of the food preparation and manufacturing industry using significant amounts of herbs and flavours, whether local or imported.
• Identify and evaluate opportunities for increasing the supply of herbs and herb-based products to the hospitality industry.
• Understand current market and consumer perceptions and expectations of culinary herbs in terms of their image, quality, food safety and market descriptors.
• Explore and evaluate the likely benefits of branding and developing product languages.
• Examine and prioritise potential opportunities for developing promotional and end-users aids.

Targets and performance indicators to be developed

Highest priority will be given initially to understanding market and consumer perceptions and to identifying and evaluating opportunittes for supplying herbs to the food preparation and manufacturing sectors (this statement to be confirmed or modified by outcomes of industry questionnaire).

OBJECTIVE TWO - To improve existing products and develop new ones [Back to the top]

Background

The goals here is to help the industry to address opportunities to improve product quality, to add value and to develop new products that will maintain or add to the value of the industry should the demand for fresh herbs alter as the food industry evolves and changes.

Strategies

• Review and evaluate local and overseas horticultural and food industry R&D with potential for developing new ways of using, presenting and processing culinary herbs.
• Develop new herb-based products.
• Establish standard botanical descriptions and units of measure for commercially significant culinary herbs.
• Review world best quality practices and establish objective quality measurement procedures.
• Undertake and disseminate the findings of R&D on post harvest handling and packaging for fresh herbs.

Targets and performance indicators to come

Highest priority will be given initially to developing new products and processes and to developing standard descriptions. (This statement to be confirmed or modified by outcomes of industry questionnaire)

OBJECTIVE THREE - To provide profitable and sustainable production systems [Back to the top]

Background

The goal here is to develop and foster production systems that are profitable, ecologically sustainable and in tune with moves towards accreditation for farming systems.

Strategies

• Provide production "fact sheets" for the major commercial herbs.
• Collate, review and disseminate recent Australian and overseas R&D on herb production.
• Confirm MRLs to support permits for use of pesticides.
• Publish an IPM manual covering the majorweeds, pests and diseases.
• Devise ways of increasing the yield of basil and coriander.
• Establish a reliable seed source for sage, chives and coriander.
• Foster DOOR projects within the industry.
• Encourage benchmarking as a means of improving profitability.

Targets and performance indicators to follow

Highest priority will be given initially to reviewing and disseminating production information, to confirming and extending MRLs, and to the development of an IPM Manual. (This statement to be confirmed or modified by outcomes of industry questionnaire).

OBJECTIVE FOUR - To enhance the human capital of the industry [Back to the top]

Background

The goal here is to strengthen the human resource base of the industry by improving access to information, by encouraging collaboration and a common ethos, and by supporting training.

Strategies

• Develop a readily accessible electronic database on culinary herbs.
• Encourage networking, workshops and the production of an industry newsletter.
• Support training in culinary herb production and processing.
• Develop a mechanism for the industry to fund and manage R&D.
• Encourage peer-based learning as a meanssof disseminating knowledge.

Targets and Performance indicators to follow

Highest priority will be given intially to training and developing national competencies and to developing a mechanism for funding R&D in the broad sense. (This statement to be confirmed by outcomes of the industry questionnaire).

References [Back to the top]

Fletcher, K. & Fraser, S. (1998). Culinary herbs In The New Rural industries: A Handbook for Farmers and Investors Ed. K.W. Hyde. RIRDC. 570 pp.

Rubin, H. & Fikke-Rubin, E (1998). An introduction to herb growing. RIRDC Publication No 98/86. 23 pp.

Appendix 1 SWOT Analysis for the Culinary Herb Industry [Back to the top]

Strengths

• Products match current market demand.
• Increasing ethnic diversity, health concerns and changing lifestyles will foster demand, at least in the near future.
• There is product diversity because a wide range of herbs can be grown in Australia.
• Culinary herbs can be grown profitably by both specialist producers and broader horticuluralists. Both small and large enterprises can be economically viable.
• Australia's climate and geographic diversity allow all year round production and hence enable continuity of supply.
• Production is local and holdings are relatively small and hence businesses are readily auditable for quality compliance and production accreditation.

Weaknesses

• Market realities and opportunities not well understood by some.
• The product is mostly highly perishable and the cool chain is lacking.
• Quality profiles, standards and descriptions are lacking or inconsistent.
• Price determining mechanisms do not reflect seasonal variations in production cost.
• Production is labour intensive
• Crop care options for pests, diseases and weeds are limited
• Production and processing information is limited or not readily available.
• The industry is unstructured and not properly co-ordinated.
• The small unit size and labour intensive nature of production make it difficult for participants to think about and commit themselves to the bigger picture.

Opportunities

• Supply more fresh product to the food processing and manufacturing industry.
• Present a greater proportion of culinary herbs as frozen, pastes or freshly dried products.
• Exploit culinary herbs as sources of natural food flavours, biologically active agents and natural preservatives.
• Greater media promotion and consumer education in using herbs.
• Develop export markets for fresh herbs and herb-based products.
• Exploit Westernisation of Asian diets and vice versa.
• Greater media promotion and consumer education about using herbs.
• Accredited production systems.
• Tourism.

Threats

• Control by major supermarket chains.
• Tax effective investment schemes.
• Imports of fresh, frozen and dried herbs.
• Currency fluctuations.
• Backyard production and other opportunist activities.
• Improper use of agricultural chemicals and poor food safety practices
• Well-meaning but inappropriate government regulations.
• Rising compliance costs.

Appendix 2 Industry Contacts [Back to the top]

Enquiries about this Culinary Herb Industry R&D page should be directed to:

David Hine
Australian Culinary Herb Growers' Association
Telephone: 02 6633 7162
Facsimile: 02 6633 7162
Email: fresherb@nrg.com.au

[Back to the top]

For the Australian New Crops Web Site:
Contact: Dr Rob Fletcher, School of Agriculture and Horticulture, The University of Queensland Gatton, 4343; Telephone: 07 5460 1311 or 07 5460 1301; Facsimile: 07 5460 1112; International facsimile: 61 7 5460 1112; Email: r.fletcher@mailbox.uq.edu.au

[New Crops Home Page] [New Crops Program] [Australian New Crops Newsletter] [New Crops Publications] [Order Form] [People] [Crop Profiles] [Other Resources]

Originally created on 4 November 1999 by: RF; Slightly modified 30 October 2000