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BY KATIE - MYGREENPOD, 25 Feb'15
HEALTHY GROWTH DEFIES TRENDS IN WIDER FOOD MARKET
Sales of Fairtrade-certified products may be down, but the Soil Association’s 2015 Organic Market Report reveals sales of organic products increased by 4% in 2014.
Nearly a third (29%) of shoppers are seeking out ethically sourced and environmentally friendly products – and over two-thirds (68%) are choosing to support local farmers and businesses.
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The new figures show the organics sector has seen significant growth in a year when both food prices (down 1.9%) and food spending (down 1.1%) fell.
Shoppers spent an extra £1.4 million a week on organic products and the organic market exceeded £1.86 billion, bringing sales back to 2009 levels.
Reports of demise ‘premature’
Over 83% of UK households bought organic products in 2014, and growth in sales across Soil Association Certification symbol holders increased by 7.7%.
‘Three years ago, commentators were writing off the organic market in the UK. Now, with a third year of steady growth, and against a falling overall food market, it’s clear that reports of organic food’s demise were premature to say the least.
‘This reinvigoration may be partly related to an improving economy, but it’s also testament to the fact that retailers and manufacturers who continued to invest in organic lines have continued to thrive. Now, even the discounters are beginning to stock organic ranges.’
Helen Browning, Soil Association chief executive
Dairy, fruit and veg
Dairy products and fresh fruit and vegetables were the most popular organic purchases. Overall, the strongest market growth was through online shopping and box schemes (11.7%) and independent retailers (5.7%).
More than a quarter of spending on organic products (27.9%) is in the dairy aisles, with yoghurt sales increasing by 13.8% and dairy sales increasing by 6.5% – a stark contrast to the 3% contraction of the non-organic dairy market.
Sales of organic eggs and poultry were up 15.8% and 8.2%, while non-organic sales dipped by 6.2% and 3.3% respectively.
Organic food’s nutritional credentials received a significant boost in July 2014 when landmark nutritional research from Newcastle University showed organic crops and crop-based foods (including fruit, vegetables and cereals) are up to 60% higher in a number of key antioxidants when compared with non-organic.
There were also sharp increases for a wide range of other products against a background of sliding non-organic sales, including fresh fruit (up 6.4%), tea (up 13.7%), cereals (up 4.2%) and biscuits (up 7.2%).
Sales of organic vegetables fell by 2%, but non-organic sales plummeted at five times this rate. Health and beauty (up 20%) and textile (up 3.4%) sectors also grew in 2014.
Growth through innovation
There was also significant growth in organic supply into catering (13.6%), reflecting dynamic growth of the Soil Association’s Food for Life Catering Mark in schools, workplaces and hospitals. For the first time, the market exceeded £1 million per week and is now worth £55.8 million.
Innovation is helping drive growth, with the organics sector investing strongly in marketing and new product development. 2014 saw more organic versions of established brands, organic recipe boxes for busy occasion shoppers and wholesalers selling direct via mainstream online shopping outlets.
Brands are also keeping customers interested in the sector by adding new and innovative products. The mood among organic businesses is confident, with 63% predicting growth in 2015 and six out of ten of these (62%) anticipating double-digit growth.
Increased consumer demand has not yet fed through into increased organic production in the UK. Still, a key area of uncertainty has been removed – new CAP support payments have been announced for organic farmers from January 2016, at more generous levels than many expected.
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