NTUC FairPrice Organic Assurance

Programme (NOAP)

Pasar Organic:Truly Organic

Ms. Chong Nyet Chin

Director, Quality & Processes NTUC FairPrice Co-operative Ltd

On behalf of

Dr. Ngiam Tong Tau

NTUC FairPrice Co-operative Ltd

o Founded by the labour movement in 1973, with a social mission to moderate the cost of living in Singapore

o Largest retailer, FY07 sale revenue S$1.81b, 6000 staff strength

o More than 200 outlets:o FairPrice supermarkets o FairPrice Finesto FairPrice Xtrao FairPrice Xpress ando Cheers convenience storeso Fresh Food Distribution Centre o Centralised Warehousing and distribution company

At NTUC FairPrice, we believe the good life shouldn’t have to cost a lot and we aim to make it accessible to all segments of the community.

Singapore’s Organic Trends

o S$40m sales in 2006; expected to double in 2008

o 4 in 10 consumers buy organic fruits and vegetables

o 12% regular buyer

o Niche market, rapidly growing, full of opportunity, and quite volatile

Nielsen Company’s Survey (2005)

1. Domestic Singapore Consumption

Singapore’s Organic Trends

2. “Organic” Retail Markets: 40 Organic Stores

Limited range of organics; mainly dried certified

food items

Mini-mart

Wider range of organics,

dedicated shelves

Supermarket

Mainly vegetables claimed to be “organic”

without info. on certification; produced locally or from Malaysia

Wet market

- Almost 100% Imported

Major supermarkets

1. NTUC Fairprice2. Cold Storage3. Carrefour

o Certified products from overseas (mainly from Australia, New Zealand, European countries and USA)

o No local organic certification board

Chilled Fruits

Condiments

Singapore’s Organic Trends

Singapore’s Organic Trends

3. Organic food range from FairPrice

o Increased demand for organic produce (fresh produce, rice, meat, eggs, etc) increased by 6 fold over last 3 years

o Specifically Organic fresh vegetables and fruits’ demands in FairPrice have increased by 4x since 2004

Challenges in Organic

Retailing in Singapore

o Price of organic food is 2x of conventional food- To provide affordable organic produce to consumers

o 90% of food are imported- Varying food quality & safety (production technologies & complex distribution channels)

o Limited supply of organic fresh produce - highly priced and mostly temperate types

o No regulations on certification & labeling of organic food - opportunistic behaviors (false claims)

False Claims Cause Confusion

“Natural”

“Free-range”

“Organically Grown”

“Pesticide Free”

Eco labels

Global Trends –

Organic Certification

Types of Organic Standards

� Government Standards (Voluntary or Mandatory)

� Private Sector Standards (CBs)

� Market Standards (importers or retailers, consumers requirements)

� IFOAM & CODEX (WHO/FAO), International Voluntary guidelines

� “Pasar Organic” = Re-assurance for truly organic

� Reduces opportunistic behaviors by creating a specific enforcement system (i.e. in-house certification) which is at zero / low cost to growers

�Ensure organic principles and practices (“organic production standards”) are maintained in an industrial scale production

� Protect organic integrity along the complex supply chain (Organic Assurance Program)

� Cooperate with regional Asian vegetable growers

Our Strategy For

Organic Assurance Program

Transporter

Retailer

Grower

Processor

DistributionCentre

Exporter

Importer

Customer

Organic Supply Chain

NTUC FairPrice Organic Assurance Programme

(NOAP)

The Value-added Supply Chain of Organic Fresh Produce

Certification adds values :

� Assured Organic Integrity

� Transparency

� Traceability

Enhanced competitiveness in

organic business

PasarOrganic

NTUC FairPrice

Organic Assurance Programme (NOAP)

Supplier

Farm Packinghouse TransporterFresh Food

Distribution

Centre

Retail

Outlets

Transporter

o Develop and Implement Organic Production Standards and Regulations (from farm to store)

o In-house Certification System - Audited by 3rd

party (Agrifood Technologies Pte Ltd)

Consumers

NTUC FairPrice Organic Assurance Programme, Version 1

NTUC FairPrice Organic Assurance

Programme

A Handbook for Operatorsin the Value-added Supply

Chain for Organic Fresh Produce

ofNTUC FairPrice

Copyrights 2007, NTUC FairPrice Co-operative Ltd

Standards of NOAP

Organic Production Standards 1. Organic Farming Standard2. Organic Handling and

Processing Standards

o Reference: IFOAM and CODEXOrganic Production Standards

o Adapted to local conditions

Our Regulator

• AVA’s Objectives– To provide resilient supply of safe food, – To safeguard the health of animals and plants– Facilitate agri-trade for the well-being of the nation.

• AVA’s core functions

– Ensure food safety, resilience in food supply – Safeguard animal, plant health & animal welfare – Promote Agro technology – R & D– Protect endangered wildlife

Source: www.ava.gov.sg

About AgroFood Technologies Pte LtdA fully-owned subsidiary of the AVA, (consultancy services in food &

agriculture)

Broad scope of services:• Technical feasibility study on farming of vegetables & aquaculture; • Technology transfer & training • Implementation of GAP certificate scheme; • Design and set up of farm, meat and agri-produce processing

facilities; • Consultancy to meet HACCP requirements • Recommend improvements to food safety, animal and plant health

diagnostic laboratory testing techniques to meet internationallyrecognized Good Laboratory Practices requirements.

Source: www.ava.gov.sg

Our Independent Auditor

NOAP’s Development &

Implementation Cycle

Long journey which requires commitment and cooperation

between all operators

2. Do/ 2. Do/ 2. Do/ 2. Do/

ImplementationImplementationImplementationImplementation

Establish systemsAug 2007 –Mar 2008

3. Communication3. Communication3. Communication3. CommunicationStaff training and briefing Aug 2007 –Mar 2008

Oct 2006 – Aug 2007

1. Planning1. Planning1. Planning1. Planning

/ Development/ Development/ Development/ DevelopmentAudited by 3rd Party-Apr 2008

4. Analysis 4. Analysis 4. Analysis 4. Analysis

& Review& Review& Review& Review

Our Assurance Standards

1. Organic Farming Standard

At the farm

• Pasar Organic produce is grown in well-selected and managed organic farms in Thailand, applying principles of Organic Agriculture.

Key organic assurance practices:

• Good water source and free from potential contamination;

• All seeds and plant materials are non-genetically modified organism and non-chemical;

• Crop rotation to enhance soil;

• Use recycled vegetable wastes as fertilizers;

• Eco-friendly weed and pest management system

Organic Handling and Processing Standards

2a. At the Processing House

After harvesting, Pasar Organic produce is sent the processing house in Thailand for packing.

Key organic assurance practices:

• Verify and record source;

• Dedicated packing facility;

• Clean, disinfect and sanitize facilities using NOAP permitted agents;

• Segregate Pasar Organic produce from non-organic produce in sealed boxes;

• Proper documentation for product tracing

Our Assurance Standards

2b. At the Storage Facility

From the processing houses, Pasar organic produce is delivered to NTUC FairPrice’s Fresh Food Distribution Centre (FFDC) for sorting and redistribution to the stores.

Key organic assurance practices:

•Check that packaging is sealed;

•Store Pasar Organic produce in dedicated shelves;

•Segregate Pasar Organic product from non-organic produce in sealed boxes

Our Assurance Standards

2c. At the Stores

Key organic assurance practices:

•Verify the condition and records of produce;

•Check that organic labels and packaging are intact;

•Display produce on dedicated shelves

Our Assurance Standards

Challenges in Implementing NOAP

� Working with small farms – Cooperation & Incentives

� Getting the systems right – commitment and resources1) Management’s Commitment2) Extensive staff trainings

� Sustaining organic market 1) Creating awareness 2) Consumers’ education

NOAP Successful Launch

� First launch on31st July 2008 to top 10 stores

� 34 types Asian tropical vegetables

� First to be developed in Singapore > Leading role in organic market place in terms of organic quality assurance

Thank YouMs. Chong Nyet Chin

Email: nyet_chin.ching@fairprice.com.sghttp://www.fairprice.com.sg/Corporate.aspx

On behalf of Dr. Ngiam Tong Tau

We are passionate about delivering the best quality, We are passionate about delivering the best quality, We are passionate about delivering the best quality, We are passionate about delivering the best quality,

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