Innovation, health & home delivery: Drivers for organic food growth amongst consumers

By Will Chu

- Last updated on GMT


Related tags Organic products Whole foods Organic food

Innovative products in the organic sector are continuing to contribute to its growth in 2017, as non-dairy milks, nutty butters and confectionery join traditional recipe snacks.

According to the Soil Association, innovation coupled with market demand mean that organic products are now available in over 8,000 outlets in the UK including all major retailers as well as online.

“There is a huge variety of interesting products coming to market, from nut butters and milks to seaweed,” ​said the Association’s business development director, Clare McDermott.

“Shoppers are looking for new and interesting food trends and organic is well placed to deliver these.” 

Brands like Rebel Kitchen and Plenish are highlighting the benefits of non-dairy milks, tapping into growing demand in the alternative protein space. Plant-based protein products are often viewed as healthier and better for the environment. 

Clearspring, on the other hand, now offers UK consumers healthy snacks featuring traditional Japanese and Nordic recipes. It’s use of Japanese and European foods and ingredients that are vegetarian and vegan-friendly appear to resonate with the organic consumer, who is also drawn to the company’s use of environmentally sustainable and non-GM ingredients.

Younger consumers

The Raw Chocolate Company are also getting in on the act with products rooted to simple, transparent recipes.

By using raw food materials like cacao beans and cacao butter, plus sugar alternatives like coconut sugar, lucuma or xylitol, the company have looked to strengthed its organic credentials amongst a consumer base that is largely made up of a new generation of shopper.

“The continued growth is driven widely by younger consumers, with the 24 – 44 age group being the most committed to buying organic,”​ said the Association.

“Shoppers are increasingly seeking out healthy food, as reflected in booming sales of organic produce, up by 7.4%.

“The rise in organic sales is in line with heightened consumer awareness and interest in wellbeing, with more health-conscious consumers making nutritious food choices including smoothies, salads, fresh dairy and cereals, as well as the desire to try new products.”

Key growth areas of organic in the 52 weeks to 1 July 2017 include spreads and preserves, including nut butters (+21%) and fruit (+12.6%). Tomato sales were up by 13.1% and bananas marked the highest growth of any food and drink product in the organic sector with sales soaring by over 25.5%.

Meanwhile, confectionery and soft drinks (+8.3%) made solid gains, alongside salads (+7.9%) and cereals (+6.5%). Dairy, the largest market sector for organic, grew 1.25% overall. Butter attained growth figures of 9.2% and milk sales rose by 2.9%.

Organic for health and wellbeing

“The other major trend is health and consumers will often see organic as a short cut to health, particularly with the nutritional research published by Newcastle University supporting this,”​ added McDermott.

Health places high on the agenda for organic consumers, who may also be parents. In discussing the introduction of organic-based foods to children, McDermott said that baby food has always had the highest penetration of all organic categories.

“Research that we carried out last year showed a key demographic to be Caring Parents who want to do the best for their families but are aware that they do not control everything that children eat.

“Eating outside the home plays an increasing role and parents will actively look for organic and healthy options on menus; our Out to Lunch campaign looked at the quality of food served in visitor attractions.”

With figures showing that 82% of UK shoppers purchasing at least one organic item per year, up from 79.5% in 2016, the onus is now on supermarkets to satisfy this demand and become the first port of call for consumers, who are increasingly interested in their food’s origins and production methods, the sector body suggested.

"Organic fruit is very popular at Waitrose, with blueberries being one of our top selling organic products, appealing to those who are searching out healthy options,” ​said  ​Kate Gibbs, brand manager at Waitrose.

“We are also seeing significant increases in sales of other fruits such as raspberries and apricots. We also find fish and other lean proteins to be examples of the growth in organic within the segment of consumers who are focused on health and wellbeing."

Home delivery hopes

With Waitrose amongst the supermarkets offering an increasingly diverse range of organic produce, smaller and budget retailers have also begun introducing an organic offering designed to appeal to the cost-conscious consumer.

As McDermott points out, many items and brands are offered at the same price point as non-organic products available in outlets including all the discounters like Aldi, Lidl and Costco.

Alongside the discounters, e-commerce represents a high-growth channel for organic suppliers in the UK. “Home delivery is one of the fastest-growing channels for consumers to buy organic, with much growth in the UK being led by Ocado and box schemes,”​ said McDermott. “As per our market report, growth was 10.5% and Ocado sales grew 16% in 2016.”

McDermott expects online sales to continue to grow apace. “Home Delivery will only grow for organic as it offers a wider choice of products and more direct access to producer,”​ she predicted. 

In particular, the news that Amazon is to buy US natural food retailer Whole Foods Market for €11.7bn (£10.7bn) could have some significant implications for British organic e-commerce sales.

Whole Foods has a small physical retail presence in the UK, where it operates five stores, but it is anticipated that Amazon will extend Whole Foods' branded presence - which focuses on natural and organic items - via its Amazon Fresh platform. 

“Amazon Fresh has generated a lot of interest in the areas that it has launched and included many organic brands," ​McDermott suggested. “Amazon buying Wholefoods will help this growth as Wholefoods already offer a significant number of organic brands and produce and this will make it more widely available.”

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