UK organic sales drop in economic gloom

Posted by Nicole Eckersley on 5th April 2011

organic food basketSales of organic products in the UK dropped by 5.9% in 2010, local certification body the Soil Association revealed yesterday.

Organic sales fell to GBP1.73 billion (A$2.7 billion), with sales at multiple retailers – which account for 72.3% of total organic sales – sliding by 7.7% during the 12 months, the Soil Association’s Organic Market Report found.

Additionally, the number of organic food producers fell as farmers and manufacturers felt the squeeze of increased competition and lower demand. The number of UK organic producers fell by 4.2% to 7,567 in 2010.

However, the Soil Association remained upbeat on the prospects for 2011. According to its report, sales accelerated towards the end of 2010 and the organic body hopes that this trend will continue in the coming year. Sales of a “wide range of products” started growing again, including butter, yoghurt, beer and cider, herbs and spices, pulses and packet soups, the Soil Association highlighted.

Speaking to just-food today, the Soil Association trade director Finn Cottle said that she hoped organic sales would not be further dented by the economic gloom affecting the UK.

“Unlike buying for indulgence, consumers buy organic because they perceive that it has a fundamental benefit – because they know its the right choice, kinder to animals or the environment, or because they believe it will have a health benefit for themselves or their families,” Cottle said. “It is an emotional decision and organic consumers have committed emotionally to the purchase. So, we think that while consumers might cut back on treats or indulgences, they are likely to continue to buy organic.”

Cottle suggested that organic producers are unlikely to increase promotional levels or discount prices in a bid to woo consumers because they “don’t want to devalue organic”.

However, on a more downbeat note, the Soil Association did suggest that conditions for organic poultry and egg production are likely to become more difficult due to a combination of faltering consumer demand, high feed prices and the cost implications of impending changes to the EU organic regulations.

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