The Horse meat scandal has also had a positive impact, recent figures from Kantar World panel show. In February 2013, total supermarket organic sales increased to their highest level in 9 months indicating consumers choosing to buy organic as a guarantee of integrity. February sales increased 8.4% versus January. Some Independent organic meat suppliers have also reported an increase in sales of up to 20% over the past month.
A strong growth of the global organic market of 25% in the past three years along with urgent questions being asked about our reliance on cheap, low-quality, untraceable food and recent positive sales figures all suggest the market will return to growth.
Report findings show organic shoppers are increasingly choosing the convenience and variety offered by online shopping and specialist stores versus the limited ranges and stock at many supermarkets. Indeed the three leading brands Ocado, Abel & Cole and Riverford saw a 10.3% increase in sales. Another key trend is the ‘Jamie Generation’ of ethically aware consumers. Under 35s significantly increased their average spending on organic products in 2012, pointing to a healthy future for the organic market.
Speaking about the report, Jim Twine, Soil Association Business Development Director said; “In the worst economic downturn in living memory, it’s not surprising to find subdued sales of a wide variety of goods and services- and the UK organic sector is not immune to these. Despite a decrease in sales overall, there are areas of significant growth highlighted in the 2013 Organic Market Report. The Soil Association remains confident the UK organic market will return to growth – it is more difficult to know exactly when.
“There is a real risk that if retailers do not work more closely with UK organic farmers and growers, the market could become restricted due to supply shortages. The report shows that when retailers have invested in their organic range their share of the market grows – and the converted organic consumer remains very loyal.
“Governments in England, Wales and NI could look to Scotland’s lead, with Action Plans to support organic farmers and growers. The UK Government should mirror European governments and really get behind organic producers in the UK to help support existing organic farmers and grow the market in future. In short – we need a level playing field.”
The organic dairy sector, non-food and catering sectors are also showing a positive uplift. The food service sector is opening up rapidly, supported by the Food for Life Catering Mark, where the organic range is in demand and growing.
The Soil Association Organic Market Report is produced with support from Triodos Bank.
Key findings of Organic market report
Boom in online sales
Organic shoppers are increasingly choosing the convenience and variety offered by home delivery over limited ranges at many supermarkets.
A striking success in 2012 was seen by Ocado, increasing organic sales by 6.4%, and overtaking Asda and Morrisons to become the UK’s fourth-largest organic retailer - with predicted further growth of 10-15% in 2013.
Home-delivery specialists Ocado, Abel & Cole and Riverford, increased their combined organic sales by 10.3% in 2012, putting them as front runners of organic box scheme sales.
Sainsbury’s saw its online organic sales increase by a remarkable 48%.
Independent outlets
Independent outlets saw a 0.7% increase in sales, covering box schemes, mail order, farm and health-food shops, farmers’ markets and catering.
Now valued at £480.6 million, the independent sector is providing consumers with a high street alternative for the ethical consumer.
Multiple retailers
Reduced availability of organic products in various supermarkets has affected the market both in the short term, and looking at future growth.
The seven leading multiple retailers saw their organic sales fall by 3.8%.
Sales of supermarkets own-label ranges fell by 11.2% in 2012. Success of Duchy Originals own-label range contributed to 1.1% increase in Waitrose organic sales.
Box schemes
Box scheme, home-delivery and mail-order sales increased by 4.4% to £174.3 million.
A third successive year of healthy growth was spearheaded by Abel & Cole and Riverford, whose turnover increased by 20% and 8% respectively.
Abel & Cole’s weekly deliveries reached the 50,000 mark, increasing by a quarter.
