Soil Association's UK Organic Market Report

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Soil Association's UK Organic Market Report

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Organic product sales fell by 3.7% in the UK in 2011, according to a report published by the Soil Association. This represents relative stabilisation, with previous declines more pronounced.

These UK figures are out of kilter with the international trend of an 8% growth, and sales of E44.5 billion for the year with the most recent global figures, 2010.

Throughout the recession, organic sales have remained strong in European markets. By comparison, when the UK market dropped by a full 12% in 2009, the French market rose by 10%.

East European sales of organic food were also up in 2011: by 20% in the Czech Republic and by 25% in Poland.

Growth in the BRIC (Brazil, Russia, India, China) countries is exceptionally strong. The organic market in China has quadrupled in the past five years, while Organics Brasil reported an annual growth rate of 40% in the Brazilian market.

BRIC countries now have hundreds of millions of middle class consumers – India alone has over 200 million.

(These global figures represent a phenomenon economists and sociologists have noted for some years: while the gap between rich and poor people is widening, at the same time, the gap between rich and poor countries is narrowing.)

The UK figures are worth examining in more detail. While overall sales were down to £1.67 billion, sales through box schemes, home delivery and mail order increased by 7.2% to £167 million.

By comparison with the more direct routes, multiple retailers were widely accused of jumping the gun on an organic sales decline. Own brand organic products were delisted, as buyers for supermarkets presumed organic was a commodity like any other – for the most part reducible to price only, devoid of 'extra cirrucular' meaning, motivation or loyalty.

So in presuming that organic food purchasers would not stick with organic in tough times, the main supermarkets have lost customers to the more direct routes, and also to higher end retailer Waitrose. Waitrose were “the only major supermarket engaging in significant promotional activity or investment in its organic offering” according to the Soil Association. Waitrose, “saw its sales decrease by 2.2%, compared to a 9.5% drop in the combined organic sales of the other six leading multiples.

At the other end of the social spectrum, discounter LIDL saw actual growth in their organic sales in the UK. There was a 16% rise in UK organic sales for LIDL in 2011, in contrast to the ‘squeezed middle’ range of stores.

Outside the retail sector, the restaurant and catering sector grew by 2.4%. This was in part due to an increased take-up of organic food in schools, nurseries and hospitals, thanks to the Soil Association-led Food for Life Partnership and Food for Life Catering Mark.

Perhaps most importantly, from a farming perspective, is the fact that turnover of Soil Association licensees increased by 0.5% from April 2011 to January 2012.

The UK is Ireland's largest market for organic produce. Concerted efforts have been put in in recent years to grow other markets, including in particular Continental European markets. Nevertheless, the UK market is the most significant, especially for beef exports.

UK organic sales were strongest in babyfood, beef, lamb and non-food products. The meat figures are especially interesting for Irish exporters: even lamb sales were up in 2011 in the UK, by 16%, having declined in previous years.

Reassuringly, The Good Herdsman have developed new markets for Irish organic beef in babyfood, as well as for Irish organic beef and lamb in general.

While the move towards direct routes for organic food in the UK is in many ways commendable, in terms of the development of sustainable local food markets, it is of little use to Irish exporters. This is because these more direct routes tend to involve more local foods – though, for example, organic babyfood with Irish ingredients would still preform well in home delivery and mail order markets.

Here's a video from the Soil Association on this

Full market report is here

ENDS

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