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Organic market faces downturn, but committed consumers stay loyal

UK sales of organic products present a mixed picture, according to a major report published by the Soil Association earlier this week [1]. For caterers it would appear that while many are spending less freely at the moment, ardent believers of organic produce are prepared to pay for their beliefs suggesting that organic options still have a place on out-of-home menus.

Organic food sales have been hit across all sectors, as consumers tighten their belts in the face of the economic downturn. Although overall UK sales of organic products increased by 1.7% [2] in 2008 to over £2.1 billion, this statistic must be seen in the context of overall food price rises rather than sales volume increases.

Peter Melchett, Soil Association policy director said, "This has been a really difficult period for all retail, and organic sales have suffered along with the rest of the economy. This report describes a very mixed picture as consumers react to the financial crisis. But those consumers who are committed to organic products appear to be staying loyal. This shows the underlying resilience of the organic market, which we believe will grow again once the economy picks up."

The Soil Association’s Organic Market Report 2009 shows there has been a sharp fall in sales of certain products, including fruit, bread and bakery products, soft drinks and prepared foodstuffs, although even in these sectors, some brands are bucking the recessionary trend. In tandem there has been dynamic growth in sales of organic food through farmers’ markets where figures increased an estimated 18.6% to £23.7 million last year [3].

The report shows that there is a core of consumers who may be cutting back but are determined to stick to their organic principles. Thirty-six per cent of these committed organic consumers say they expect to spend more on organic food in 2009, and only 15% expect to spend less [4]. Animal welfare issues attracted a high public profile in 2008 and sales of organic milk, cheese, some meat and poultry grew by 10.6%, 11.5%, 13.3% and 17.7% respectively, demonstrating that where the benefits of organic production are understood, commitment remains firm among ethical consumers.

Research shows that over a quarter of consumers who do not currently buy organic food ‘would like to know more about organic products than they do’ suggesting potential to broaden the market still further in the future [5].

[1] The Soil Association Organic Market Report is available to download here.
[2] Sales through multiple retailers increased by 1.8% to £1.54 billion; sales through independent retailers are up 1.4% to £568 million.
[3] According to a survey conducted by National Farmers’ Retail and Markets Association (FARMA) in February 2009.
[4] Market Tools/ZOmnibus poll Jan 2009
Committed organic consumers are far more likely to cut their spending on eating out, leisure activities and holidays than to reduce what they spend on organic food. They would rather economise by buying cheaper cuts of organic meat or by buying frozen organic vegetables than by compromising their organic principles.
Soil Association Organic Market Report 2009 (Chapter 1 – Figure 4)
[5] Market Tools/ZOmnibus poll Jan 2009

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