Organic food producers are predicting a change of fortunes after three years of tumbling sales.
The Soil Association, the UK’s leading organic organisation that has just kicked off a month-long promotion, is hoping that it will boost organic sales by 20 per cent. Riverford, the UK’s biggest organic vegetable box delivery scheme, is aiming for growth of 5 per cent this year.
“There is great confidence from many [organic] brands and producers,” said Finn Cottle, trade director of the Soil Association. Illustrating this, Rachel’s, the maker of organic yoghurts, launched its first nationwide TV campaign on Monday.
Organic produce was an early victim of recessionary pressures, and even last year – with flattering comparables – value sales were down 5.8 per cent in the 52 weeks to May, according to Kantar Worldpanel.
Riverford, which on Monday reported a 2.4 per cent increase in retail sales to £39.5m ($63.6m) in the year to April, is harbouring bullish expectations for the coming year, with plans to ramp up marketing and attract 10,000 new customers. However, Rob Haward, the managing director, admits that profitability in the sector is rather lower than initially expected.
Critics argue that organic produce has been blighted by more than economic woes – noting that other premium-priced food and drink have outperformed during the downturn.
“The simplest answer, ‘Oh, it’s money’, is the wrong one,” said Edward Garner of Kantar. Instead, he said, “Organic is a complex sell. The Soil Association has half a dozen different reasons for buying organic.”
The fact that some producers have dropped “organic” from their names, including Rachel’s, illustrates the point. Others pin part of the blame on retailers, claiming that they lost interest in organic produce as the recession took hold.
“Over the last three or four years, the supermarkets have yo-yoed a bit in terms of where they sit,” said Mr Haward. “When the recession hit, they turned their backs. More recently they are investing again.”
That, he said, is because those who buy organic tend to spend more money on shopping altogether – making them exactly the sort of customer that supermarkets want.
Waitrose, consistently one of the fastest-growing supermarkets and the only one of the top seven to lift organic sales in the year to May, would appear to bear this out.
Waitrose said its organic sales are outperforming the market, with its organic market share growing from 20.3 per cent to 21 per cent for the 52 weeks to the end of June, according to figures from Nielsen, the research company.
Others point the finger at the government. Ms Cottle said the UK is at odds with other big markets and in the US, France, Scandinavia and Germany, organic sales are rising.
“We sadly linger behind in support from government, both financially and verbally,” she said.
Additional reporting by Andrea Felsted
Get alerts on UK retail results when a new story is published