Supermarkets key after organic growth sales disappoint some
A report from the trade body, which licenses organic products and promotes organic farming, revealed that sales of organic food and drink in the UK rose 4.5% last year, the eighth consecutive year of growth, to reach a record £2.45b, and is on target to hit £2.5b by the end of 2020.
According to the findings, £200m a month is now spent on organic food and drink as the rise of the ‘conscious consumer’ sees UK shoppers making two more trips to buy organic than they did five years ago.
However, Guy Singh-Watson, the founder of UK-wide organic vegetable box delivery company Riverford, an organic farm and a leading UK organic farmer, called the 4.5% rise in organic food sales disappointing. “Given the huge rise in discussion of green issues over the last year and the solutions that organic farming can contribute, a 4.5% growth in the UK organic market is disappointing and still leaves us trailing the European and North American markets,” he said.
The UK organic market is the ninth biggest in the world by value sales, behind the US, Germany, France, China and Italy, according to Soil Association report. And while organic growth is outperforming the rest of the food and beverage market, it remains a fraction of the market for non-organic food, up from 1.3 to 1.6% since 2015, according to the report. Food and beverage is the largest manufacturing sector in the UK, worth £28b, according to the Food and Drink Federation.
Responding to Singh-Watson, Clare McDermott, Soil Association Certification’s business development manager, told FoodNavigator that supermarkets were missing a trick in capitalising on demand for organic produce.
“I don't disagree with Guy in that you would hope that the huge amount of environmental awareness, with shoppers saying they want to make plant-based and planet-centric decisions about what they are buying, hasn't completely translated into sales yet,” she said. “But I think it’s probably more nuanced at times in that it is translating through into certain areas but not others.”
For example, the biggest single growth channel was online retail and home delivery – including organic veg box schemes such as Abel & Cole and Riverford – where sales rose by 11.2%. Ocado, the UK’s biggest organic online retailer, benefitted from this trend, expanding its organic lines to over 4,500 and enjoying a 12% sales increase. Searches on the Soil Association website for “organic box scheme” increased 174% year on year to the end of 2019.
The huge interest in plant-based food has contributed to a spike in sales of organic chilled and deli foods (up 15.9%), the Soil Association said, although organic fruit and veg saw sales fall by 2.4%.
“There needs to be still more organic ranging in supermarkets, which is where the majority of the population shop, to enable that [translation into sales] to happen,” added McDermott, who blamed price promotions in supermarkets for the perceived price discrepancies between organic and non-organic food.
"Organic has taken a long time to shake off its sometimes negative associations around it being just food for the middle classes, when actually organic food can be and is accessible for everybody”.
“The price differential that you tend to see with organic and non-organic tends to be more on the fresh categories. Some of the decrease is down to promotions across non-organic produce. So some of the price differentials are because the cost of the food isn't being reflected in the price that's being charged.
“I think [supermarkets] are all looking at how they can respond to the demand and I think at the moment they probably are still missing the trick on how to respond to the demand, particularly as the amount of innovation among organic producers that is coming through in the chilled foods and deli categories is huge."
Non-organic sales in the chilled and deli sector and canned and packaged sector rose 16 and 17% year-on-year, she said. "There is significant innovation happening in those areas.”
