European organic market improving – but national differences remain

The organic market research organisation told FoodNavigator that while demand for organic products is still sluggish in the UK, France and the Netherlands are among European countries that continue to see strong growth.

President of Organic Monitor Amarjit Sahota said: “Since 2007, demand for organic products has been affected by the financial crisis. The UK market has been the most adversely affected, reporting negative growth because of the weak consumer sentiment. Other country markets like Italy and Switzerland have shown slower (but positive) growth. However, other countries like the Netherlands and France have continued to show double-digit growth.”​

Across Europe, sales or organic food and drink have increased by 4-6% a year since 2007, he said, to reach about €21bn last year.

However, even in the UK, some food companies are bucking the negative trend.

EHL Ingredients, which sells about 200 organic ingredients, primarily for ready meals, soups and sauces, says it has seen a sharp increase in organic ingredient sales for the first time since 2007, particularly for its dried fruit, lentils, seeds and peppers.

Sales director at EHL Ingredients Tasneem Backhouse said: “We have certainly noted a significant increase in demand for our organic ingredients during 2012, following a dip during the recession and up until the end of 2011….This is positive news for us and for the organic sector as a whole as it shows there is a revival in consumer interest in organic foods.”​

Market withdrawal​

Sahota said: “We find some companies are finding a rebound in sales, not so much because of growth rates increasing suddenly but because of changing market conditions. Some companies are withdrawing from the organic sector as they did not reach critical volumes. In other sectors, there is a shortage of organic foods / ingredients because of lack of production. These could be reasons why this certain company is reporting a rebound in sales of organic spices, lentils and dried fruits.”​

EHL said it has been adding organic ingredients to its range for the past 17 years, but this year has been its most profitable since before the recession.

“Many food manufacturers now offer an organic alternative alongside a conventional product while at the same time we have seen the emergence of brand new organic food manufacturers,”​ Backhouse said.

Sahota added that fresh fruits and vegetables continue to account for more organic product sales than any other category, at about 30% of the total, followed by dairy, organic baby food, beverages and meats.