Organic food is set to see sales fall off as cash-strapped Brits hunt down cheaper alternatives, according to latest research from Mintel.

The organic food and drink market is now worth £1.6 billion, but as a result of the current economic climate, as many as half (48 per cent) of all organic shoppers will reduce - or even give up - buying organic food in the next year alone.

After five years of impressive growth, attitudes towards organic food are clearly changing and sales are set to slacken off. The value of the market increased an average of 16 per cent a year between 2003 and 2008, but in the coming years, sales are forecast to dramatically slow and growth is unlikely to hit previous levels any time soon.

Richard Perks, director of retail and financial research at Mintel, said: “British consumers are clearly beginning to question the value of organics and the added benefits they get from paying the premium price. Now, more than ever, retailers and suppliers need to clearly communicate the ethical, environmental and personal benefits of buying organic.

“On top of the effects of the financial problems, organic food is facing increasing competition from other ethical choices including welfare, Fairtrade and locally sourced foods,” he adds.

Only 21 per cent of shoppers actively seek organic produce when out buying food, according to the Mintel survey, compared to 33 per cent who prioritise locally sourced goods and 26 per cent who seek Fairtrade products. Local sourcing is now the number-one ethical concern for food shoppers, with the market worth three times that of organic, at £4.8 billion.

The survey shows that as many as 42 per cent of adults would like more retailers or manufacturers to source their products from local suppliers, while almost three in ten (28 per cent) are happy to pay more for food if it means supporting local farmers.

“The success of farmers’ markets, the awareness of food miles and the huge increase in the choice of local produce available in supermarkets have all helped boost the popularity of locally sourced foods,” said Perks. “There has also been a move in recent years away from heavily processed, highly artificial foods towards better quality and fresher produce as people become increasingly aware of where their food comes from.”

But Perks added that organic manufacturers offering high-quality, premium goods will arguably remain resilient in the next few years.

Topics