It has surely been a quarter of difficult reading for the organics sector, with figures released to suggest that the category is going through one of its worst sales periods in recent years. To rub salt into the wound, Fairtrade sales seem to be holding up surprisingly well in the current climate. But do the organic industry’s key players agree with the recent findings and reports?
TNS Worldpanel data reveals a 20.2 per cent slump in volume sales of organic fruit for the year ending February 22 and a 9.1 per cent dip in organic vegetables. Value sales of organic fruit were down 16.5 per cent in the 12 months, while the value of organic vegetables dipped by 10 per cent.
Overall sales of organic food fell one per cent in value in the
12-month period to January 25, according to TNS, despite escalating food inflation, while value sales of non-organic food rose by seven per cent. The share of organics in the grocery market slipped from 1.4 per cent to 1.3 per cent over the year, and in the 12-week period to January 25, spend was down by
15.3 per cent and market share of organics fell to 1.1 per cent.
A peek at the specific TNS figures for fresh produce on the left would also imply that the organics sector is in decline.
Another report from the last three months, this time on the performance of Whole Foods Market, also contributes to the idea that organics are struggling in the UK. The world’s largest organics retailer has started the process of rebranding its four London Fresh & Wild outlets into Whole Foods Market stores. But reports have suggested that Whole Foods’ flagship store in Kensington, which is less than two years old, has struggled, with customers put off by its expensive prices.
But in the face of such difficult statistics, the organics community remains largely upbeat. The Soil Association has joined with organic growers and suppliers to insist that there is a loyal core of shoppers who will not abandon their organic ethics in the face of a recession.
Soil Association commercial director Jim Twine tells FPJ: “It is a very mixed picture, depending on who you supply and what with. There is no doubt that it is very difficult for consumers. However, there are still examples of sales going strong - for example, [organic vegetable box scheme] Riverford is still seeing good growth. There is still a strong, committed core of consumers who buy a significant proportion of the organics market, and it is hugely unlikely that will disappear.”
One insider even goes so far as to slam the TNS data as “wildly inaccurate”. The specialist supplier tells FPJ that there are still growth opportunities in the organics category for those niche companies who can get it right every time.
“Big conventional suppliers who do a little bit of organics might be suffering on the latter, but that is only a small percentage of their business,” he explains. “If they are not looking after their organics business properly, that opens up opportunities for companies like us to go in and increase our contracts.
“There has been a slight decline in sales, but that is natural - those shoppers dedicated to organic, however, are continuing to buy into the category. We are securing new deals and using our connections to start handling new products as well.
“Organics is not a fad - despite the downturn, people will still buy organic food.”
However, problems may arise from the mixed messages of Fairtrade and organic produce, he adds. “A lot of produce is Fairtrade and organic, but is only labelled as Fairtrade. Certain retailers like to promote this concept over organics,” he says.
But other suppliers are less optimistic. “Organic sales have crashed - this time last year we could sell the product at any money, but now retailers are giving us price limits and delisting products if we can’t meet those prices,” one tells FPJ. “For example, today I had orders on eight pallets of organic Savoy, but the price was not low enough. Previously, retailers had to have an organic alternative to all their conventional lines, but now they would rather go without.”
However, if consumers who may previously have bought organics are shying away from the category, who is to blame? Many organic traders feel that the media has helped talk the UK into a recession, and that is not helping the situation.
Twine says: “There is no question that only after the word recession was mentioned by Gordon Brown did sales of organics drop. However, sales of conventional product dropped as well.”
Another insider adds: “Apart from the two million who are sadly unemployed, those who are still earning might have more money than they had previously, with the cost of fuel down, for example. A year ago in the UK people would have laughed at the idea of shopping at Aldi and Lidl, but now shopping cheaply is trendy and a point of pride.
“Even those in employment have been hearing a lot about prices recently and, to a certain extent, organics is therefore suffering. There are those consumers who are still very committed to organics - a certain percentage will continue to buy into the category, but not all.”
Sales of organics over the next few months will depend on the price, according to traders - if prices ease back, people who have recently abandoned the category for reasons of cost alone may head back into it, but at the moment certain products are double the price of conventional. Prices on organics this time last year are pegged to have been 15-20 per cent lower.
“There are a lot of continental growers getting out of the organic game - I know four or five in Brittany alone who have stopped growing organically simply because they can’t make it pay,” says one trader.
There is certainly plenty of food for thought, with some companies clearly keeping their heads well above water despite the recession, while others find themselves treading water or looking at alternative products and markets. While tough to predict what will happen to organics over the next few months, no doubt the fate of the category will continue to generate headlines both in the trade and national press.
NAME FITS FOR ILEX ENVIROSCIENCES
Our recent name change from Ilex Organics to Ilex EnviroSciences better describes our expanded product range, services and customer focus, says managing director Murray Smedley.
The company has evolved over the last four years into more than simply a provider of certified organic inputs. Today, our portfolio includes biodegradable mulching films and a wide range of sustainable plant nutrition products. However, the heart of our business remains very much as a supplier of inputs and specialist advice to the organic grower. We aim to provide an innovative range of products supported by the most up-to-date and impartial information available. Our constant communication with the Soil Association and other certifying bodies ensures compliance of both the products we supply and the advice we give the grower on their use. An example of this is our recent mulching film information leaflet, which we produced in response to enquiries from growers confused by the claims being made for a plethora of so-called “degradable” mulching films - many of which are irresponsible and sometimes false. This leaflet is not intended as a marketing tool, but simply as an unbiased and informative customer resource.
The production of organic fruit and vegetables has many problems to address, not least of which results from the current downturn in the economy. We fully recognise the challenges faced by the grower and have responded by substantially revising our 2009 nutrition portfolio to bring to the grower both greater quality and increased affordability. We believe that UK growers must continue to fight hard to make the case for locally grown produce in the face of imports - they must use the advantage of the weak sterling in their drive to retain market share for organically grown fruit and vegetables. The world-renowned standards set by UK organic produce must be maintained and the shopper’s understanding of the principles of “food miles” and their impact on the environment can only benefit the local growers’ cause.
Although the organic sector is reporting a downturn in sales, we feel it is important that supermarkets and other retailers come to recognise that consumer demand for organic food is neither a fad nor a fashion. Opting for organic food is now a lifestyle choice for many who want healthy and wholesome foods that have been produced in a sustainable way. Of course, shoppers will be looking carefully at their weekly food spend and some loss of premium-priced goods must be expected, but if the big chain supermarkets focus only on the highest volume ranges then we may well see an increase in sales of organic produce through farm shops and local outlets.
Our optimism for the future remains firmly with both the supply of organic and low-input sustainable produce, and this is illustrated by the appointment in January of Brian Aconley as our business development manager. An acknowledged expert in plant nutrition with many years’ experience working directly with growers, Brian, acting as a solution provider, can give advice and technical guidance to our customers, helping them to produce quality crops while reducing inputs.
We believe that, despite current economic conditions, the long-term future of food crop production here in the UK will favour those growers who pursue a policy of producing food in an environmentally sustainable manner. Increasingly, legislation and consumer demand make reliance on many conventional inputs less viable and, therefore, Ilex EnviroSciences will continue to seek out products that help the grower in their objective to produce high-quality fruit and vegetables in a sustainable way. As our logo says, Ilex EnviroSciences is here to “advance environmental technology”.
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