Investment to tackle organic ‘price barrier’

05-May-2015 - Last updated on 06-May-2015 at 10:55 GMT

Six in 10 non-organic shoppers see organic as overpriced, says Mintel

Price is arguably the biggest barrier the organic market faces, says Mintel – but retailers are coming up with ways to make organic foods accessible to a wider audience.

Organic produce seen as overpriced

Emma Clifford, senior food analyst at Mintel, said UK consumers who describe their situation as financially OK or healthy were the most likely to be buying organic food and drink.

While consumers’ economic confidence is increasing, prices are one of the biggest barriers the organic market faces, she said, as six in 10 non-users of organic produce see these products as overpriced.

Overcoming the price barrier

Regardless of expense, that UK companies are now investing more in organic food launches signals growing confidence in the market, Clifford said. And an uptick in the availability and choice of organic options, after years of reduced shelf space, should in turn help to support the return to growth.

“Aldi’s launch of a new range of organic vegetables in January 2015 is further testament to the growth opportunities seen within this market. Aldi claims that the new offering will help consumers save 25% when buying organic food. This is likely to chime well with customers, given that prices are arguably the biggest barrier the organic market faces.”

Market confidence

There was a sharp increase over the past couple of years in the number of UK launches across the top six categories for organic new product development, said Clifford, including baby food, bakery, dairy, sauces and seasonings, chocolate confectionery and snacks.

“This rise in NPD mirrors an improvement in the organic food market, which saw value sales tumble by over a quarter (27%) between 2008 and 2012, seeing it as one of the major losers of the recession and its aftermath within the food industry. The first green shoots of recovery appeared in 2013, with sales of organic food edging up by 1% year on year to £1.2 billion.”

Fuelled by Organic Trade Board Campaign

The recovery of the UK organic food market is further fuelled by an Organic Trade Board campaign, which launched its largest ever marketing push in March 2015. This marks the fifth annual ‘Organic. Naturally different’ campaign, which is being backed by more than 120 food suppliers, retailers and producer groups. The 2015 promotion puts a greater focus on retail sites than previous years, but also includes digital advertising, PR and social media.

“As with all previous campaigns forming part of this organic push, it follows the “if your food could talk, what would it tell you” theme,” said Clifford. “This aims to communicate the core message that no antibiotics or pesticides are used in the production of organic food - tapping into the Mintel trend Factory Fear - and that the highest standards of animal welfare are upheld.”

What it means

She added that while a rise in consumer spending should benefit the organic market, the fact that operators and retailers are investing suggests they have confidence in the market’s prospects too.

“The growing availability should in turn help to support sales growth, with the OTB campaign also likely to help continue the market’s recovery.”