Sales reached £1.213 billion last year, according to the Soil Association. This represents an 11 per cent increase on the previous calendar year, and underlines again growing consumer interest in food considered to be more natural and nutritious.
Such growth also suggests that the organic sector, which has enjoyed sales equating to £2.3 million a week, has become more adept at marketing to its strengths.
"This report shows that the popularity of organic food is growing steadily and the organic market has a bright future," said Patrick Holden, the Soil Association's director. "Increasing numbers of people are eager to buy local to obtain the freshest organic food possible and to cut down on the environmental pollution caused by 'food miles', which is good news for small local producers."
While structural barriers exist in building up sources of organic ingredients, gains could be maximised by UK suppliers playing to the strengths of the country's climate. Obvious as this seems, they cannot compete on organic vanilla or organic tea, but they can on brassicas, vegetables, high protein wheat for bread, for example.
The Soil Association's Organic Market Report 2005 claims that sales of organic products through box schemes, farm shops and farmers' markets increased by 33 per cent in 2004. Sales through independent shops also rocketed, increasing by 43 per cent.
Interestingly, the supermarket share of the market fell from 81 per cent to 75 per cent, but still accounts for £913 million in sales.
However, a worrying 1 per cent increase in the contribution was made by imports to the volume of organic food and drink consumed in the UK. The Soil Association claims that the key factor in this was a switch away from UK-produced organic pork, beef and salad by some leading supermarkets.
"Some supermarkets are responding positively to the appetite for local food, but others are choosing to fly in the face of consumer expectations and government targets by increasing their reliance on imports," said Holden.
"Imported beef and pork may be cheaper, but they mean increased food miles and are often produced to lower animal welfare standards. After two consecutive years in which little or no progress has been made towards the import reduction goals set in the Organic Action Plan, the government needs to step up its efforts to get the major retailers to take its targets seriously."
The report however highlights an encouraging widening of the appeal of organic food and farming beyond high earners and the middle classes, with over half those in lower income groups now saying they buy some organic products. And despite a static birth rate, the UK market for organic baby foods enjoyed 6 per cent growth between 2003 and 2004, compared to 1.5 per cent for non-organic baby foods over the same period.
For a product to be termed 'organic' it must meet the standards of an approved independent control body, which has inspected all aspects of its production.
The EU regulation recognises that it is not yet possible to make products entirely from organic ingredients. As a result the manufacturer can use up to 5 per cent of certain non-organic food ingredients and still label the product as organic. However, genetically-modified ingredients and artificial food additives are never allowed in organic foods.
For foods that contain 70 to 95 per cent organic ingredients, the word organic appears only in the ingredients list, and as a description on the front of label to show the percentage of ingredients that are organic.