Great Britain: There is light at the end of the tunnel

The Soil Association has published its Organic Market Report 2012 on the occasion of their annual conference in London this month. Overall sales in the UK were down by 3.7 % in 2011 to £1.667 billion (1.990 billion euros). However, there was some good news. Home delivery and mail order increased by 7.2 % to £167 million (close to 200 million euros), with organic sales of the online home-delivery service specialist Ocado growing by 5.5 %. Organic food was taken up in schools, nurseries and hospitals through the Soil Association-led Food for Life partnership and the Food for Life Catering Mark. (Picture: Begbrook Primary School children in Bristol)

Sales of organic baby food in the UK were up 6.6 % in 2011. It was also a good year for meat, with lamb increasing by 16 % and poultry by 5.8 %. Dairy products and fresh fruit and vegetables continued to be the most popular organic categories in Great Britain, accounting for 29 % and 23 % of sales respectively. Health and beauty sales were worth £ 30.1 million, a plus of 8.7 %. Textiles continued to expand their reach as well: Soil Association Certification saw the turnover of its 79 textile licensees increase by 2 % to £ 12 million. (Picture: Heavenly Tasty Organics baby food)

	2010	2011
Multiple retailers	£1,252 million	£1,189.6 million	- 5 %
Box schemes / home delivery / mail order	£155.8 million	£167 million	+ 7.2 %
Farm shops	£31.55 million	£30.45 million	- 3.5 %
Farmers' markets	£17.82 million	£17.64 million	- 1 %
Catering	£15.33 million	£15.7 million	+ 2.4 %
Other independent retailers	£259.3 million	£246.6 million	- 4.9 %

Many consumers were looking for a deeper connection to production values and increasingly to specialist retailers as supermarkets have been reducing the choice and availability of organics since the end of 2008 with the start of the financial crisis. Independent retail sales, including box schemes, mail order, farm and health-food shops, farmers’ markets and catering establishments, were quite steady with a decrease of only 0.5 % to £ 477.4 million, but this sales channel increased its share of the organic market to 28.6 %. (Table: Share of the UK organic market 2010 – 2011, Source: Soil Association)

There are over 500 home-delivery box schemes in the UK. Abel & Cole increased their turnover by 28 % and now make an average of 40,000 deliveries a week. Riverford increased their turnover by 5 %. Box schemes plus home-delivery and mail-order sales grew by 7.2 % to £167 million in 2011, their second successive year of growth. The conventional online home-delivery specialist Ocado increased its organic sales in the year to September 2011, with organic products accounting for 10 % of turnover. 1,500 organic lines are stocked from companies like Daylesford and Laverstoke Park. (Picture: Vegetables being picked for Riverford Organic boxes)
 

Tesco, Sainsbury’s, Waitrose, Asda, Morrisons, the Co-Op, and Marks & Spencer are the leading multiple retailers regarding organic sales in the UK. Their sales amounted to £1.19 billion, equal to 71.4 % of the organic market. Waitrose was the only major supermarket engaged in significant promotional activity or investment in its organic offer, launching more than 50 new products in its own-label and Duchy Originals organic range. The company saw its sales decrease by 2.2 %, compared with a drop of 9.5 % in the combined organic sales of the other six conventional leading multiple retailers. The leading organic retailer in terms of market share was Tesco, with 27.1% of multiple retail

Tesco	27.1 %	- 5.9 %
Sainsbury's	23.1 %	- 5.1 %
Waitrose	18.8 %	- 2.2 %
Asda	8.7 %	-22.6 %
Morrisons	6.8 %	- 22 %
Co-Operative	3.6 %	- 22 %
Marks & Spencer	2.6 %	- 7.6 %
Lidl	1.0 %	+16.7 %

sales. A positive example was the 16.7 % growth in organic sales, although from a low base, at Lidl, showing the continuing appeal of organic food across the social spectrum. (Table: Multiple retailers in the UK organic market 2011, Source: Soil Association)
   
Altogether, the independent retail sector and those supplying it are more optimistic about the outlook for 2012 than the supermarkets and their suppliers. Among the three leading supermarkets in the organic market only Waitrose anticipates growth, while Tesco and Sainsbury’s both anticipate a decline. 

The restaurant and catering sector, an area in which organics had not been well represented in the past, grew by 2.4 % in 2011. The number of Food for Life Catering Mark holders has more than doubled in the past year and the number of Catering Mark accredited meals served is over 500,000 per day – almost 100 million each year. More than 4,200 sites now offer Catering Mark accredited menus. The majority are in schools, but over 60 nurseries, six universities and five hospitals are also part of the scheme. A success in the restaurant sector was the increasing demand for organic milk at McDonald’s, with volumes growing by 9 % in 2011 and topping 20 million litres for the first time. (Picture: Whitmuir The Organic Place was the first restaurant in Scotland to achieve the gold Food for Life Catering Mark in 2011)

According to the National Farmers' Retail and Markets Association, there are over 500 farmers’ markets in the UK,  the sales of which decreased by an estimated 1 %. There are also over a thousand farm shops, and it is estimated that sales of organics through these outlets fell by 3.5 % in 2011.

Organic land area in the UK decreased by 2.8 % to 718,345 hectares in 2011, representing 4.2% of all farmland in the country. The most encouraging picture was in England, where the rate of conversion to organic production slowed down, but the fully organic land area increased by 16 %. The number of organic producers and processors fell by 4 % from 7,567 the previous year to 7,287. The full Organic Market Report 2012 is available here: http://www.soilassociation.org/marketreport