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Organic Market Expected To Grow

by 5m Editor
12 April 2010, at 9:58a.m.

UK - Despite sales of organic products falling last year, the Organic Market Report published today (12 April) by the Soil Association expects the market to pick back up following increasing confidence amongst consumers.

Sales of organic products in the UK fell by 12.9 per cent in 2009 to £1.84 billion.

Yet despite the toughest economic climate for 20 years, the report also indicates clear signs of increasing confidence amongst consumers. Based on evidence from the early months of this year, the Soil Association predicts a modest market expansion of between two per cent to five per cent in 2010.

The most comprehensive study of UK organic trade, the Organic Market Report shows that in line with other retail sectors, shoppers spent less on organic food in the recession. In addition, leading retailers reduced organic ranges and shelf space.

The three biggest categories of organic food – dairy, fruit and vegetables, and fresh meat – saw supermarket sales fall by 6.5 per cent, 14.8 per cent and 22.7 per cent respectively. In contrast, organic milk bucked the trend in dairy sales growing by one per cent, with 2009 being the best year for organic milk sales on record, and organic baby food sales, resilient throughout 2009, grew by 20.8 per cent passing the £100m mark.

Organically managed land area in the UK increased to 743,516 ha in January 2009 – up nine per cent on the previous year – and now represents 4.3 per cent of UK farmland.

Further key finding in the report include:

  • Over 60 per cent of the UK’s biggest organic brands are planning for growth in the coming year;
  • Sales of organic food are still three times higher than in 1999 and over 50 per cent higher then five years ago;
  • Tesco organic fresh produce sales are already growing. Tesco predict overall organic sales will increase by one per cent in 2010 while Waitrose anticipates organic sales growth of three to five per cent;
  • Organic box schemes fell by -9.8 per cent while supermarket sales of organic fell by -12.2 per cent and the independent sector by -17.7 per cent;
  • Organic health and beauty products continued to grow rapidly with sales increasing by a third to £36m;
  • Sales of bread and other bakery items were one of the worst hit categories (-39.8 per cent);
  • The number of households buying some organic food fell only slightly in 2009 (from 88.9 per cent to 88.3 per cent);
  • Organic products continue to attract shoppers from across the social spectrum, with groups that include manual and casual workers, pensioners, students and people on benefits accounting for 33 per cent of the spend.

Peter Melchett, Soil Association policy director, said: “It has been a tough year for the organic market, but we have seen businesses that are most committed to communicating the many, real benefits of organic food and farming to the public perform best.

“Confidence is now returning, and with the growing recognition of the need for environmentally sustainable production systems that are less reliant on fossil fuels, we are confident that the organic market, having weathered the recession, will return to growth.

“The question we should really be asking is not ‘can we afford organic food?’ but ‘can policy makers afford to carry on playing down the potential of organic farming’s contribution to food security and tackling climate change?’ In the meantime, we need to rekindle the kind of consumer demand that will ultimately be impossible for policy makers and retailers, to ignore.”