UK: Sales of organics growing again

The Soil Association has published its Organic Market Report 2014. It reveals that the organic sector has seen growth of 2.8% in 2013. Brands carrying the Soil Association logo have even grown by over 5%. The organic market in the UK is now worth £1.79bn (€2.18bn). It seems the positive trend is set to continue in 2014, with organic sales for the first four weeks of the year increasing by 2.5% -  outperforming by a long way overall grocery sales, which were down 3.2%.

2013 was the first year in which the organic market in the UK has experienced annual growth since 2008. The revival was spearheaded by independent retailers – including home-delivery box schemes, online shopping (via independent retailers), farm shops, specialist stores and farmers' markets. Some shoppers continue to look to local, specialist and online outlets for the variety of organic products or the kind of shopping experience that is not available in some of the major supermarkets, with supporting local farmers also being a factor. Turnover through these sales channels increased by 6.9% to £10m (€12m) per week. (Picture: Development of sales of organic products in the UK, 1995 - 2013) 

Planet Organic increased organic sales through its six London stores by 14%, and predicts even higher growth in 2014. Whole Foods Market continues to increase sales steadily through its six London stores and additional outlets in Glasgow and Cheltenham, and is preparing to open a seventh London store in Fulham in 2014. The Better Food Company and Unicorn Grocery, leading independent retailers in Bristol and Manchester respectively, both achieved double-digit growth. (Picture: Planet Organic opened its newest store in 2013)

The largest growth throughout 2013 was achieved by box schemes / home delivery / mail order– up 11% on last year to £193.6m. The two biggest box schemes, Abel & Cole and Riverford, saw their sales increase by 22% and 9.6% respectively. Abel & Cole cites increased marketing as the main factor in its growth. Riverford attributes its success to new product development and encouraging people back to organic, set against the backdrop of the horsemeat controversy. Both predict approximate growth of 10% in 2014. Many smaller box schemes also reported growth, despite often being isolated from large population centres and having limited marketing resources. (Picture: Customers in an independent shop in London) 
 
Sales of organic products through farmers’ markets and farm shops increased by 3.4% to £42.7m (€51.9m). Respondents to the Soil Association’s survey of independent retailers reported farm shops and cafés doing brisk business after several challenging years. Sales through farmers’ markets have been more mixed, and comparatively sluggish overall. The cold, wet spring reduced the number of shoppers visiting farmers’ markets at a time when other retail outlets were benefiting from a sales bounce in response to the horsemeat controversy.

In a survey conducted by Natural and Organic Products, independent retailers identified Biona as the most popular organic brand with their customers, followed by Infinity, Doves Farm, Meridian and Clipper. (Pictures Doves Farm products)

Sales through multiple retailers rose by 1.2% to £1.25bn - the first increase since 2009. Sainsbury’s (picture) – the country’s biggest organic retailer with a 29% market share – saw a 7% increase in sales of its own-label organic products and expects further growth for 2014 .The strongest growth was achieved by the online grocer Ocado, the country’s fourth-largest organic retailer, which increased its organic sales by 10.4%. It expanded its range of organic lines by a striking 79% to over 2,500; 55% of which are under its own-label brand. Its most popular organic purchases are bananas, blueberries, apples, carrots, large fruit and vegetable boxes, semi-skimmed milk and chicken. The company expects further growth in 2014.

Waitrose increased its organic sales by 6.5% and predicts a further increase in sales of around 7% in 2014. Own-label products now account for 61% of its organic turnover, with 10% of all its organic sales online. Eight of its ten best-selling organic lines are part of the Duchy Originals ranges. Common factors in the success of Sainsbury’s, Waitrose and Ocado include a strong online presence, extensive organic ranges and a strong commitment to new product development and marketing. Morrisons redesigned and relaunched the packaging for its own-label M organic range in 2013, while Tesco (picture)started stocking organic Fairtrade bananas for the first time. Tesco reports that demand for organic fruit and vegetables has increased significantly, but meat sales are static. Both these retailers and Marks and Spencer anticipate little change in organic sales in 2014. Household names, such as Yeo Valley Organic, Green & Blacks and Rachel’s Organic are the most popular organic brands in supermarkets.
 

The sector where organic products are most dominant is baby food, where organic sales now account for 54.8% of all sales through the supermarkets. Sales remained constant in 2013, despite sales of non-organic baby food falling by 7.9%. Growth has been particularly strong in the dairy sector, which accounts for 30.2% of organic sales through the multiple retailers. Overall sales increased by 4.4%. Organic milk sales grew by 5% and yoghurt sales by 7%. Sales of organic vegetables increased by 3.4%, while the market for meat, fish and poultry grew by 2.2%. This positive outlook is also reflected in consumer attitudes to organic and bodes well for the next 12 months, with 45% of organic consumers intending to buy more organic fruit and veg in the year ahead and 22% intending to buy more organic dairy products in 2014.  (Picture: baby food from Heavenly Tasty Organics)
 

Catering and restaurant sales rose by 10% to £17.5m, buoyed by the success of the Soil Association’s Food for Life Catering Mark and by demand from high-street chains such as McDonald’s and Pret A Manger for organic milk, tea and coffee. The Soil Association’s Food for Life Catering Mark, the UK’s fastest growing food service best practice scheme, accredited over 160 million meals served in 2013 – an increase of more than 14% on the previous year. Nearly a third of meals served are now at the Silver and Gold levels of accreditation in which organic sourcing plays a part – an increase of more than 60%. More than 6,000 schools now enjoy Catering Mark meals every day, including a third of all primary schools in Scotland. (Picture: Children of the primary school in Bassingham profit from Food for Life Catering Mark meals)
 

Sales of organic health and beauty products grew by 17% in 2013 to £37.2 million. The number of Soil Association symbol holders increased by 12.5% to 135. The UK’s leading certifier of organic products to Global Organic Textile Standard (GOTS) saw the turnover of its 73 textile symbol holders increase by 36% in 2013. Much of this growth was export-led, but the UK market for organic cotton is estimated to have grown by around 10%

Figures from Defra report that producer and livestock numbers and the UK’s organic land area decreased in the year to December 2012. The numbers of organic producers and processors also fell by 6.3% to 6,487. Currently around 3.5% (606,000 hectares) of the agricultural land area in the UK is organic. Financial comparison reveals that organic farm businesses were slightly more profitable and less exposed to volatility than their comparable non-organic counterparts between 2006 and 2012. More information on this subject is available in the report Organic farming: How it stacks up, also published by the Soil Association. (Picture: Distribution of organic land in the UK in 2013, including land in conversion)

This data and further details on the organic sector in UK, as well as globally, are published in the Soil Association Organic Market Report 2014. The full report is available for download here:

http://www.soilassociation.org/