Organic brands with ‘hero’ status excelling in UK, says Soil Association
The Association recently produced its 2013 Organic Market Report where it found UK organic sales dipped 1.5% compared to the previous year to $1.6bn.
Jim Twine, Soil Association business development director, told FoodNavigator that supermarkets had “heavily overreacted” to the recession and stripped down organic product lines causing own-label organic sales to fall.
Branded goods profiting
However, branded organic goods, such as Yeo Valley, have benefited from the vacuum left by supermarkets.
“We’ve noticed a huge amount of innovation from brands…The brands are really important in the organic markets.”
“There are lots of very strong brands with a hero position,” said Twine.
He gave Mondelez International’s chocolate brand Green & Blacks and Lactalis’ dairy brand Rachel’s Organic as examples of products that have reached 'hero status'.
Independent firms and delivery companies such as Riverford have also filled the void left by supermarkets. The largest UK supermarkets have limited their organic ranges, but some supermarkets such as Waitrose, Morrison’s and Ocado have continued to expand organic offerings.
Rise of specialist stores and online
Twine said that the rise of independent stores and a resurgence of supermarket organic products would not harm branded goods and could in fact grow the mass market creating opportunities for business of all sizes.
He added that the under 35s had increased their spending on organic products in 2012, while the Horsemeat scandal had helped organic sales grow in the first few months of 2013.
Online sales for organic product boomed in 2012. Retailer Sainsbury’s reported a 48% increase in online organic sales, while Ocado grew organic sales online by 6.4%.
UK organic sales flat; everywhere else grows
The UK is not among the top markets for organic foods even in Europe with 2012 sales of $1.6bn.
Organic sales in the largest US market reached $21bn last year, while Germany and France racked up €6.6bn and €3.7bn respectively.
“The UK is the only place on the planet where organic sales are flat – everywhere is they are growing,” said Twine.
He said this was because few retailers controlled a large share of the supermarket sector and most had reduced their organic offerings during the recession.
He added that the UK Government was much less supportive of the sector than in other markets and had the lowest reward payments for organic farmers in Europe.
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