By Oliver Moore
Thursday, October 20, 2011
ORGANIC food sales are under pressure in our biggest market, Britain.
In most of the rest of Europe, organic markets are growing, and the Irish export focus has increasingly shifted over to the EU mainland.
Nevertheless, Britain remains an important export avenue for Irish organic produce. And research shows the British consumer considers Irish food to be the equivalent of regional food, in other words, food from Scotland or Wales. While this might annoy some Irish people, politically, most Irish food producers see it as a distinct advantage.
Just what is the current situation for organics in Britain, and how does this compare to the rest of Europe? Nic Lampkin and Susan Padel’s presentation at the Teagasc Organic conference, considered this topic. Their research suggested that the media had partially fallen out of love with organic in Britain. Retailers also ‘jumped the gun’, getting cold feet and withdrawing products without sufficient evidence that the consumer doesn’t want organic.
Their research highlighted a Kantar Worldpanel report, outlining a recession slump of £300m in the British organic market. Sectors vary in their resilience. For example, baby food boomed through the recession, with a 16% growth in sales. Importantly for Irish producers, some dairy and meat products did well also — yoghurt up 5%, fresh beef up 3.8% and butter up 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 steadily slowing, since it peaked in early November, 2009, according to the Kantar research.
Whereas Waitrose increased their organic sales, all other major retailers reduced theirs. Waitrose increased their own brand organic sales by 16%.
Market segments seem to be sharpening in Britain, with 62% of organic buyers accounting 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 the organic food in Britain. Those categorised as regular or committed account for over 80% of organic sales in Britain, whereas occasional buyers only account for 2%. The former have what Lampkin described as a “missionary zeal” around organic, and tend to be higher educated, middle class.
Lampkin analysed key producer issues. For beef, supply shortages are now a real threat, potentially leading to retail unavailability. For lamb, high conventional prices have put a floor under organic prices — and many organic lambs are sold as conventional. But supermarkets still charge significant organic price premiums.
From an Irish perspective, the take-home messages are: some opportunities in beef and lamb to Britain; benefits in mainland EU market development; benefits in broad but clear organic promotional campaign.