UK ORGANIC MARKET: TOUGH TIMES

Organic food sales are under pressure in our biggest market, the UK.

In most of the rest of Europe, organic markets are growing, and Irish export focus has increasingly shifted over to the mainland of the EU.

(Pic: Nic Lampkin one of the stalwarts of organic farming

research since his seminal 1990 publication Organic Farming)

Nevertheless the UK remains an important export avenue for Irish organic produce. It is also the case that research shows the UK consumer considers Irish food to be the equivalent of regional food, in other words, food from Scotland or Wales. While politically this might annoy some people, most food producers would see it as a distinct advantage.

So just what is the current situation for organics in the UK, and how does this compare to the rest of Europe? Nic Lampkin and Susan Padel's paper, presented at the Teagasc Organic conference, considered this topic.

The research presented suggested that the media had partially fallen out of love with organic in the UK. Retailers also 'jumped the gun' on consumers, getting cold feet and withdrawing products without sufficient evidence that the consumer did not actually want organic food.

Their research highlighted a Kantar Worldpanel report, outlining a loss of £300m in the size of the UK organic market from pre to post recession. Sectors vary in their resilience. For example, baby food has boomed through the recession with a 16% growth in the value of sales recorded. Importantly for Irish producers, some dairy and meat products did well also: yoghurt up by 5%, fresh beef up by 3.8% and butter up by 2.6%.

Significant declines were recorded in fruit (11%) while other products relevant to Irish producers - milk cheese and lamb – also declined, by 5.8, 3.4 and 3.3% respectively.

However, the rate of decline has been slowing down, month by month in steady progression, from an absolute peak in early November 2009, according to the Kantar research.

Different retail outlets have also behaved differently: Waitrose increased their organic sales, whilst all other major retailers reduced theirs.

(Indeed, it was reported in the UK media that Waitrose simply hovered up consumers who wanted organic food. These consumers were misread as being unlikely to choose organic by the category buyers for Tesco, Asda et al.) Waitrose also significantly increased their own brand organic sales by 16%.

Market segments seem to be sharpening in the UK. 62% of organic buyers account for only 12% of spend, while 8% of organic buyers represent 54% of money spent on organics.

In other words, a small dedicated group is purchasing over half of all the organic food in the UK. Indeed, those categorised as regular or committed account for over 80% of all organic sales in the UK, whereas occasional buyers only account for 2%. The former have what Lampkin described as a “missionary zeal” around organic, tend to be higher educated, middle class and strong believers in the merits of organic food.

A worry for the organic sector in the UK is that premium has recovered somewhat, whereas organic is only now approaching a point of stabilization.

Lampkin also analysed key producer issues. For beef, supply shortages are now a real threat, potentially leading to retail unavailability. For lamb, high conventional prices have created a floor to organic prices, with many lambs sold as conventional. However but supermarkets are still charging significant premiums. Spring shortages are also an issue.

Researchers suggest numerous issues when compared organic in the UK with the rest of the EU: perception of elitism, a lack of recognition of environmental and other public good benefits; competition from other ethical markers; and in particular lack of consumer understanding of the organic message.

To this end, industry got together and established their own Organic Trade Board, and in particular the EU funded “Why I love Organic” campaign.

From an Irish perspective, the take home messages are: some opportunities in beef and lamb to the UK; benefits in mainland EU market development; benefits in broad but clear organic promotional campaign.