A report from the Soil Association, published on Monday, found that sales of organic food fell 12.9 last year in the UK to £1.84bn.
Amarjit Sahota, the director of Organic Monitor, said organic food sales have also been struggling in some other parts of Europe including Spain and Germany.
But the director of the consultancy and market research firm said the situation in the UK has been particularly bad because of the severity of the recession and the publication of a Food Standards Agency (FSA) report last year questioning the health value of organic food.
Sahota said this “double knock” has made it harder for organic food brands to justify a price premium of 50 to 60 per cent.
To fight back, he said organic companies are turning to their green credentials.
Unable to compete on price and with the health argument eroded by the FSA report, they have been on the look out for new ways to compete.
Improving and marketing environmental credentials is an obvious choice. Organic food consumers as a group are likely to be concerned about the environment and companies often have a head start on conventional rivals when it comes to existing practices.
Sahota said: “Sustainability has been built into the corporate DNA of many organic firms.”
But organic firms are not necessarily as good as big conventional rivals at communicating their green initiatives. Sahota said the organic industry needs to be more vocal about sustainability.
This is one of the reasons why Organic Monitor is hosting a summit on sustainable foods this summer.
To be held in Amsterdam on 10 -11 June, the summit will look at ways that market leaders are adopting ‘organic plus strategies’ like carbon offsetting to add value to their products.
On this subject, attendees will hear from Followfish, an organic food company that has set up a tracking system for its seafood products that allows customers to scan a bar code and find out exactly where their purchase comes from.
The Sustainable Foods Summit will also cover topics including fair trade, eco-labelling and sustainable sourcing, with talks from representatives of groups like WWF and the Fair Trade Labelling Organisation, as well as business leaders including the founder of Green & Black’s.
For full details of the summit please click here.