News of Organic Industry

Organic Products Market Showing Recovery

Sales of organic food and drink rose by 2.8% in 2013 after successive years of decline. Growth was fuelled by strong growth among independent retailers and healthy online sales.

The organic products market in the UK was worth GBP 1.79 bn (EUR 2.15 bn) in 2013, up from GBP 1.64bn (EUR 1.97 bn) in 2012 according to the 2014 Organic Market Report from the Soil Association.

The growth is ahead of the overall grocery sales for 2013, which slowed to just 2.1%.There are signs that the trend is set to continue this year - organic sales in January were up by 2.5%, outperforming overall grocery sales which slumped by 3.2%.

During recent tougher economic times organic product purchases with a premium price were among the first food items to be ditched as consumers sought to save money on their weekly shopping.

In 2012 organic product sales fell by 1.5% and in the previous year they slumped by 3.7%. At their height in 2008, before the start of the recession, sales of organic products totalled GBP 2.1 bn (EUR 2.5 bn). The small rise in 2013 reverses the ongoing slide in the face of ongoing tough economic conditions, compared to Fairtrade product sales, which have been more resilient.

But the organic products market is still dwarfed by the size of the overall food and drink sector, the largest manufacturing segment in the UK and now worth GBP 92 bn (EUR 110 bn), according to the Food and Drink Federation.

Independent retailers have led the way in organic food sales, reporting growth of almost 7% (6.9%) to almost GBP 10m (EUR 12m) per week. Online sales continued to grow strongly with Ocado seeing an increase in sales of 10.4% . Of the supermarkets, Sainsbury's - the UK's biggest organic retailer with a hefty 29% market share - enjoyed a 7% increase in sales of its own-label organic products, closely followed by Waitrose where sales were 6.5% through the expanding Duchy brand. More than half of all baby food sold is now organic.

Four out of five households now buy organic produce, the Soil Association said, with younger shoppers under 34 willing to spend the most on organic products.

Rob Sexton, chief executive of Soil Association Certification, said: "To see the organic market showing such strong signs of growth, particularly when grocery sales as a whole are slowing, shows just how much potential there is in the organic sector. Both the growth in the organic market and the accelerating growth of products carrying the Soil Association logo further highlight the growing public demand for organic and food logos that they can trust."

The UK's largest retailer, Tesco, said the figures mirrored its own experience of "significant" organic food growth. Sales of organic bananas were up by a massive 60% year on year, pink lady apples and melons up by 20%, lemons and grapes rising by 10% and carrots and potatoes 5%.

OM Comment
The organic products market is showing positive growth as the UK economy recovers from the financial crisis. Consumer expenditure on organic foods is rising, and is expected to continue to rise as confidence returns. However, it remains to be seen who will capitalise on the upturn: domestic growers or exporters? With low interest from domestic producers to convert to organic farming, the UK market could be targeted again by exporters.

An update on the European market for organic products will be given in the Sustainable Foods Summit. The next edition will be hosted in Amsterdam on 5-6 June. More details are on thewebsite
Source: The Guardian / OM


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