Great Britain: Organic Market Shrinking More Slowly

The Soil Association published the Organic Market Report 2011 on the occasion of the Natural and Organic Products Show in London in April. According to the report, sales of organic products in Great Britain were worth £1.731 billion in 2010 - a decrease of 5.9 % compared with the previous year. The rate of decline, however, slowed significantly throughout the year. The outlook for 2011 is cautiously optimistic, with Marks & Spencer anticipating modest growth, while Tesco, Sainsbury's, Morrisons and the Co-operative predict level sales year on year. Sales of a wide range of products - butter, yoghurt, beef, beer and cider – have even started growing again.

Seventeen out of twenty households in Great Britain bought organics in 2010 and, on average, consumers bought organic products fifteen times compared with sixteen times in 2009. Organics continue to attract shoppers from across the social spectrum. Those in the most disadvantaged socio-economic groups account for one third of spending. The growth of sales of organic box schemes by 1% suggests that consumer interest in seasonal and local produce is undiminished. (Picture: Visitors at the annual Organic Food Festival in Bristol)

The biggest success stories in 2010 were in sales of organic beef (up 18 %), organic baby food (up 10.3 %), and organic textiles (up 7.8 %). Dairy products and fresh fruit and vegetables were the most popular organic categories, accounting for 30.5 % and 23.2 % of sales respectively. The biggest brand in the organic market is dairy company Yeo Valley Organic. Sales of its organic yoghurt increased by 14.9 % in 2010 on the back of a new product range and a high-profile television advertising campaign. (Picture: Yeo Valley at the Organic Food Festival 2010)
 

Sales through multiple retailers, which accounted for 72.3 % of the organic market, fell by 7.7 % to £1.252 billion. The market shares of the multiple retailers were as follows:
 

Source: Soil Association
 
Sales through independent retailers accounted for the remaining 27.7 % of the market, falling by 0.75 % to £479,8 million. Box scheme and mail-order sales grew by 1 % in 2010 to £155.8 million. The online home-delivery specialist Ocado increased its organic sales by 16 % to around £ 60 million, and organic products now constitute 12 % of its turnover. Abel & Cole increased its turnover by 13 %. Box schemes with a turnover above £2 million saw their combined sales grow by 9 %.
 
Riverford Organic Vegetables (picture) increased its sales by 1.5 %. The company reports that the second half of the year was significantly better than the first: it delivered 41,000 boxes a week in December 2010, compared with 39,500 twelve months previously. The picture among smaller box schemes was mixed, with some experiencing dramatic growth and others significant decline. The net effect was a 6.9 % decline in sales among the smallest operators.
 

Sales of organic farm shops decreased by 3.4 % to £31.55 million, and those of organics on farmers' markets by 6 % to £17.83 million. There are over 500 farmers’ markets in the UK, according to the National Farmers’ Retail and Markets Association (FARMA). A survey conducted by FARMA on behalf of the Soil Association in 2009 found that organic sales accounted for an estimated 9.5 % of the £2 billion turnover of farmers’ markets. (Picture: Nant Gwyn Faen Organic Farm Shop in Wales)
 

Taking its own data and trends in the wider restaurant trade into account, the Soil Association estimates that organic sales through catering and restaurants fell by 6.9 % in 2010. This puts the value of the organic catering and restaurant sector at £15.33 million.The number of schools serving organic food is increasing through the work of the Food for Life Partnership (FFLP) – the Big Lottery-funded initiative led by the Soil Association in conjunction with the Focus on Food Campaign, Garden Organic and the Health Education Trust. The FFLP now works with over 3,200 schools across England. Children are provided with meals that are freshly cooked with seasonal, local and organic ingredients.

Sales of other independent retailers fell from £ 262.1 million in 2009 to £ 259.3 million in 2010, a decrease of 0.7 %. Organic land in Great Britain decreased by 0.6 % to 738,709 hectares in 2010, equal to 4.2 % of the total farmland in the UK, and the number of organic producers fell by 4.2 % to 7,567 from a record high of 7,896 in the previous year. The production of organic vegetables and milk fell in 2010, but cereal production is on the increase. The full report is available online under: Soil Association Organic Market Report 2011.