Opportunities and challenges within UK organic meat sector
though processors need to step up their marketing activities if
they are to fully capitalise, writes Anthony Fletcher.
Organic meat sales in the UK increased by 139 per cent between 2001 and 2004. Market analyst to Organic Monitor believes that sales have been surging due to increased awareness of high quality meats, along with ethical concerns regarding meat production methods.
As a result, the market for organic meat products has become the fastest growing segment of the UK's organic food industry.
However, meat processors looking to capitalise on this consumer trend face a number of challenges. Organic Monitor says that small producers should build bargaining power by joining marketing groups, while larger producers should step up marketing activities.
Market winners, claims the analyst, will be those companies that can successfully differentiate their organic meats from competing products at affordable prices.
In addition, inefficient supply chains and lack of finishing units have caused significant volume to go into the conventional meat market, despite the fact that there has been a large rise in organic meat production since 2001
Other restraints to market growth include the high price premium and competing meat products.
Although British retailers are under pressure to source more indigenous organic foods, the Organic Monitor study found that imported organic meats comprise almost 20 per cent of total sales volume. Organic meat imports are coming into the UK from a number of continents.
The report argues that supermarket sourcing policies and inconsistent domestic supply are factors behind imports.
The supermarkets continue to dominate with 72 per cent market share, though their market share is in decline. Increasing volume is going to other channels; specialist retailers, food processing, direct marketing and the catering sector.
Nonetheless, Organic Monitor predicts healthy growth rates to continue over the next few years as greater volume comes into the market. The increase in organic food processing activity has boosted demand for organic meats with over a half of domestically produced organic pork going to this sector.
Organic poultry is the fastest growing segment, expanding by over 20 per cent per annum. The study predicts the organic poultry market to comprise most volume in the UK organic meat market in the coming years. However, undersupply has prevented higher market growth with some retailers unable to secure sufficient volume.
The situation within the UK's organic meat sector largely mirrors the situation in Europe as a whole. Sales of organic meat products across the Union have been increasing at over 20 per cent per annum since 1998, though market growth slowed to 9.5 per cent last year.
Conventional meat companies dominate most country markets, having entered the organic sector either via directly supplying organic meat products or via acquiring dedicated organic meat companies. One reason for this is that, as in the UK, organic meat supplies have been falling short of demand, encouraging many meat producers in Europe to convert to organic production methods.
And as in Britain, the most important sales channel for organic meat products are the supermarkets, which had a 51 per cent market share in 2002. But although most sales are from the supermarkets, specialist retailers remain important sales channels in many countries. Interestingly, organic food shops and butchers account for most organic meat sales in the German and Italian markets.
More information on the UK's organic meat market can be found by clicking here.
