The organic market continues to grow, expected to exceed £2.2 billion in sales by year end – it’s highest yet. With the grocery category alone adding a 39% increase in sales over four years, Callum Tyndall finds out what is behind the product growth and whether the same trend could be seen in other categories.
As consumer interest in healthier products and a clear chain of traceability continues to rise, organic produce has made steady progress in expanding its market. According to the Soil Association, the market has seen steady growth over the past five years and, in the 52 weeks to 13 August 2017, total sales of organic grew by 6.3%.
This growth has translated to 82% of UK shoppers buying at least one organic item per year, up from 79.5% last year, and organic products now being available in over 8,000 outlets, including all major retailers as well as online. With growth not only remaining steady but actually increasing, and significantly so in the grocery category in particular, the question that arises is just how has the market achieved this growth and can it be maintained?
Building the organic brand: the Organic September effect
During September, the Soil Association ran a month long campaign called Organic September, designed to raise the profile of organic in the UK. In the 4 weeks up to 30th September, Nielsen Scantrack found that organic sales grew by 7.1% and, moreover, overall sales of organic also hit a high of 1.6% penetration during the month. While it is uncertain whether such figures will persist long beyond the September campaign, it is notable the extent to which the organic market is making gains in the consumer consciousness.
As Clare McDermott, Soil Association Business Development Director, said: “We’re really pleased to see such strong growth for organic in September, which has highlighted to us that when consumers see a clear message about what it means to be organic, together with increased prominence and availability through multiples, they do buy in. The key growth areas of fresh fruit, grocery, and meat, fish and poultry, all meet shopper demands from health to food provenance, and strengthen the role that organic plays in meeting these interests. This year’s media coverage for Organic September has doubled, showing that more people than ever are taking interest in how their food is produced.”
Gaining greater awareness and building the organic brand is key to the continued growth of the sector. While the increased cost that can be found with many organic products may dissuade some consumers, there may be many that have the income to support greater organic shopping but simply haven’t been given a reason why to do so. By promoting data such as the 50% average increase in wildlife found on organic farms, groups such as the Soil Association may be able to convert consumers who may otherwise have a concept of what organic means but not why they should be investing in it.
Gaining ground with grocery: Diversifying success across categories
Perhaps unsurprisingly, the bulk of organic’s growth has come within the grocery category. Receiving a full 39% increase in sales over the last four years, grocery is nevertheless joined in the top three sales categories by dairy and fresh produce. The question that producers have to ask, however, is what can be done to replicate that enormous grocery success across other categories? In part, products within the grocery category have likely benefitted from a certain obvious appeal boost from organic. The associated health trend with organic foods means that jams made from organic fruit are an easy sell, in the same way that that organic fruit will have benefitted within the produce category.
If other categories of the organic market are to match the success found within these top three, they will need to tap into the same trends and promote themselves as such. Chief among organic’s appeal are the promises that it is healthier and the origin of the product is clear. Across the board, organic products need to affirm their status within the larger organic movement and, beyond a simple logo on the packaging, make it clear that buying into said product is buying into the greater trends behind it.
As McDermott observed in relation to the Soil Association’s 2017 Organic Market Report, “Organic is extremely relevant to trends towards, eating better food, knowing where your food comes from, avoiding pesticides or antibiotics and ‘free from’ diets. Increasingly, we’re seeing consumers choose organic as a shortcut to a healthy lifestyle and this will continue. Despite the uncertainty of Brexit for us all, it brings lots of opportunities too – particularly around export for British organic and more product innovation.”
Sustainable supply chains: Maintaining transparency in trade
While organic is currently on a strong streak, there may be trouble on the horizon. Integral to the continuing growth of the market is the maintenance of supply chains, not only keeping the chains themselves stable but ensuring consumer confidence in them is maintained. In the face of a currently uncertain Brexit, organic supply chains are facing greater complexity as they attempt to build resilience and sustainability in order to continue to meet the demand they look to build upon.
Lee Holdstock, Trade Relations Manager at the Soil Association, said: “Sustainable food and farming needs stable, sustainable supply chains and, although the organic market is flourishing now, future growth depends on resilience and an ability to plan and react to new tensions and challenges. Improving efficiency, cooperation and transparency in supply chains now is imperative if organic businesses are to become more resilient, inspire confidence and take advantage of growth in a broader range of channels.”
The importance of this transparency is borne out by Coombe Farm, winner of the Soil Association’s Best of Organic Market award for best small organic retailer. As observed on their website, “Organic ingredients are fully traceable and audited. Without that Soil Association stamp, there is no assurance of how and where your food has been produced.” With the organic market growing rapidly, and industry challenges such as Brexit on the horizon, it is important that producers establish their risk management tools to ensure that the defining assurance for organic quality is protected. In essence, unless a stringent transparency can be maintained, the entire organic brand could be devalued.