Organic sector hit by 'weak marketing' and economic woes: business leaders

Delegates at Food Manufacture’s Business Leaders’ Forum, held in central London yesterday (January 15), discussed why the organic market had slumped in recent years.

Chris Thomas, ceo at food-to-go firm Adelie Foods, said a different promotional approach had to be taken if organic was going to recover.

“There needs to be a different form of marketing if organic genuinely does provide a difference in taste and quality. It is an ever-increasing fight to get a share of the​ [national] stomach out there.”​

Philip Wilkinson, a director at chicken processor 2 Sisters Food Group, had a similar view, but also focused on the impact of reduced consumer spending.

He said it would be preferable to make the same level of profit on “one £10 chicken than three-for-£10 chickens,” ​but added that was unrealistic.

“Organic chicken is less than 1% of the market,”​ he added. “The fact is that incomes are squeezed and organic is the victim of budgets.”​

Soil Association​

Wilkinson also believed the organic sector needed a different marketing strategy. “There are some good organisations behind organic, such as the Soil Association, but the marketing is not right because they are clearly not getting the message across,” ​he said.

Persuading people of the benefits of organic in the rest of Europe and further afield, however, does not appear to be so difficult.

The annual event − sponsored by legal firm Stephenson Harwood, business improvement specialist Acumen and recruitment expert Goldteam − heard that UK organic manufacturers were enjoying success with organic exports.

“It is important to understand that that the UK is the only market that is not doing well,”​ said Alex Smith, md at organic and gluten-free muesli company Alara Wholefoods. “There is 7% growth in Greece, 8% in Spain and 40% in Spain and India.”​

He said his firm was also exporting to the US, and added there was a “specific issue”​ with organic in the UK.

Government support​

Lise Madsen, md of Honeyrose Bakery, which produces organic and free-from products, said the UK was the only country to have a receding organic market. This was due to a lack of government support, she added.

“The economy across Europe is struggling but we are the only country in decline,”​ she said. “It is not about price − organic in Greece is growing and that is almost bankrupt.​

“The UK government is anti-organic.”​

Despite the problems in the organic market, delegates heard that the free-from sector was in good health.

Paul Berryman, chief executive at Leatherhead Food Research, said the number of free-from new product launches had increased from 6% of the overall total in 2006 to 12% today.

“The gluten-free market, for example, is much bigger than the number of people who are intolerant,”​ he said. “It has become a lifestyle choice.”​

Don’t miss our exclusive video interview with Lise Madsen, where she discusses what she’d like the government to do to promote the organic industry and why she doesn’t think its slump is down to economic pressures.

There will be more stories from Food Manufacture​’s Business Leaders’ Forum later this week.