Rural Diaries – country life, the countryside and rural issues

Posted by Sally on April 7th, 2009 in British Food, Farming Issues, Green Living

The media reaction to the 2009 Organic Market Report by the Soil Association, which was released yesterday, has been quite dramatic.

I read the report and felt quietly confident that the UK’s organic food market would survive the recession and yet the first headline to hit the internet, 15 hours ago as I type, was the Farmers Guardian with Organic sales slip as recession bites .. oh well not to worry farmers are generally pessimists at the best of times.

Then came The Telegraphs headline Organic boom over as consumers rein in food luxuries during recession .. surely other than repossession companies every boom is over during the recession, so this is hardly a startling headline.

Luckily the optimists were on hand, with the realistic headline in the Scotsman of Organic food sector ‘resilient’ but sales growth slows to 1.7% and the Farmers Weekly stating in their headline Organic sales defy credit crunch .. woops perhaps not all farmers are pessimists after all.

So what does the 2009 Organic Market Report actually say? Well there’s good and bad news but isn’t there always.

The report will actually be a great disappointment for all those who predicted a total collaspe of the organic market during the recession, it seems there is a slow down in the organic sector but a collapse is not yet on the cards.

In the Foreword Peter Melchett, Policy Director for the Soil Association says: “Against this background it is encouraging to report that sales of organic food increased by 1.7% last year – in marked contrast to the prophecies of doom made by some. This growth points to some underlying resilience in the organic market, suggesting that it has the potential to grow dynamically once the economy picks up.”

Simply put, over the past decade sales growth in the organic sector has increased consistently and strongly year on year. This continued in the first 6 months of 2008 but slowed right down in the last quarter of the year. Overall for 2008 there was a 1.7% market growth rate, despite a drop in sales .. this is due to food price increases during 2008.

Some supermarkets have suggested that in the past two months sales of organic food have begun to pick up again but many shoppers are changing from the big name supermarkets to cheaper alternatives like Aldi or Morrisons.

Like everyone in the UK, organic consumers are opting for cheaper cuts of meat and less in the way of luxuries but they appear to be remaining committed to buying organic with the Soil Association reporting 90% of UK households now buy some form of organic products.

Where people are shopping for organic produce appears to be shifting too, with less people buying at large supermarkets and more turning to farmers markets.

This is causing difficulty for some farmers, sourcing feed suitable for organic cattle is difficult and expensive but consumers are buying cheaper cuts of meat and supermarkets are not passing on the profits of price increases. However, organic sales at farmers’ markets increased during 2008 by 18.6% and box schemes are still doing well, so it’s a mixed bag for farmers.

A really important point in the report is one I hope will be widely communicated to consumers “Some organic enthusiasts who are finding it tough to make ends meet may turn to the UK’s rich variety of independent outlets such as farm shops, farmers’ markets and box schemes. Price comparisons over the past year have shown organic fruit and vegetables to be consistently cheaper through box schemes than through the leading supermarkets, with the bonus that producers receive a bigger share of the price paid by the consumer.”

The organic market is worth £2.1 billion a year, with £1.54 billion going through large supermarket chains. £568 million in sales is through farmers markets, box scemes, independent shops and catering establishments.

The general tone of the report is quite logical, there is a recession on, organic consumers are tightening their belts and people are not currently switching to organic. No great surprises there then.

However, consumers that have understood the benefits of buying organic and already made the switch are remaining committed to purchasing organic, albeit less of it in these tough times or opting for cheaper products like organic orange squash rather than organic orange juice.

There is really great news in the report for smaller organic markets, with a 40% increase in sales of organic cotton and a massive 69% increase in sales of organic health and beauty products. These two markets only account for £127 million of sales in a market worth £2.1 billion but considering the depth of the recession it is good news for someone.

I’m afraid I simply can’t join the doom and gloom brigade on this topic. Organic products have been seen as a fringe fad for many people but this report shows that the core organic shoppers are sticking to their principles.

I feel sure once the recession ends we will see the organic market continuing to go from strength to strength and yes, I believe organic food can survive the recession.