With customers' shopping budgets tighter than ever before, the organics category appears to be feeling the effects with volume down 8.9 per cent (8.1k tonnes), and value falling by 6.9 per cent, a drop of £13.9 million, both for the 52 weeks ending 30 September.
While Richard Jacobs, chief executive of the DEFRA-backed Organic Farmers & Growers body, acknowledges that the category has seen a drop in sales, he maintains that there is still a substantial demand for organic fruit and vegetables in the UK marketplace.
'The recession has had an impact on sales of all premium foods, but it isn't all doom and gloom as the category is consistently showing clear signs of stabilisation,' said Jacobs.
Jacobs maintains that a sales dip of around 15 per cent across the whole category three years ago has now been cut to only 5 per cent, and he expects the recovery to continue into 2013.
Produce World, the UK's largest supplier of organic vegetables, has seen sales of its organic carrots increase by 4.6 per cent in the last 12 months, and its research points at demand still remaining high.
'We conducted research with the Organic Trade Board and 57 per cent of those surveyed said that they continue to eat organics because there is no GM ingredients or pesticides used in production; there is clear evidence that the demand for organics has withstood the initial impact of the recession and we see consumers have remained loyal,' explains Andrew Burgess, director of agriculture at Produce World.
Burgress says that sales of Produce World's organic carrots have increased in Sainsbury's and Waitrose stores by 3.8 and 12.4 per cent respectively, and both supermarkets are currently leading the retail pack across the category.
Sainsbury's is outperforming its total grocery share by 8.6 per cent with a 23.6 per cent control of the organics market, while Waitrose is overtrading in organics by a massive 13.4 per cent, accounting for 17.6 per cent of overall sales.
'Waitrose customers have always understood the compelling environmental reasons for buying organics, and a shared passion for the best of British organic food has motivated our suppliers over the last 12 months,' said Mark Price, Waitrose MD.
Meanwhile, Sainsbury's confirmed that Soil Association's Organic September campaign has had a positive impact on sales.
'We have a long history of selling organic food, since we became the first supermarket to do so back in 1986, and as organics still remains relevant to our customers we will continue to strongly support the sale of organic products through our So organic range,' said Grace Castle, brand manager of Sainsbury's So organic.
But while organics are a strong focus at Sainsbury's, sales are down at the likes of Asda and Morrisons, with both retailers under trading.
Adam Wakeley, MD at Organic Farm Foods, believes both retailers focus on bargains is alienating a significant section of middle-class customers.
'ABC1 middle class mums are a significant buyer of organic produce and they spend more than three times the national average in their weekly food shops, so why aren't the likes of Asda battling to keep these kind of customers in its stores?' argues Wakeley.
Organic Farmers & Growers' Richard Jacobs would like to see retailers inject more originality into their organic ranges. 'The health kick of the Olympics has given this category a big opportunity, and if more supermarkets got behind organics and offered something unique like a Abel & Cole-style assortment offering, sales would increase,' said Jacobs.
Recently acquired by the William Jackson Food Group, and despite a category in 'decline', Abel & Cole's turnover rose 32 per cent to £46.5m in the year ending August 12, and chairman Keith Abel is confident in the future.
'With our new partners, we have the security we need to grow and we can carry on delivering the best vegetable boxes imaginable to our wonderful customers,' concluded Abel.
Labelled with love
Two international producers are leading the way in innovating the labelling of organic fresh produce. Thomas Hobbs finds out more
Farmers have become the new pin-ups of the produce world, with supermarkets and brands all keen to put growers on show as a way of helping consumers to connect with products.
It could be argued that the organics sector is responsible for kick-starting this trend, given its emphasis on tractability and putting the personality forward as a point of difference in the market.
Now, Nature & More has won the top prize for 'Sustainable Projects' at the ECOCARE Awards in Dusseldorf, Germany for its unique multimedia-packaging concept for organic fruit and vegetables.
Nature & More, the trace & tell system of European organic trader Eosta, puts a portrait of the relevant grower and a unique growers code onto all of its packaging. Consumers can then use the code to visit the grower online (www.natureandmore.com) and find out more about their story, and growing techniques.
'Nature & More has succeeded in setting up a direct communication with the consumer that bridges the gap between consumer demands for sustainable products, and the way in which fresh products are sold on the shelves', said Daniela Büchel, head of the ECOCARE judging committee.
Volkert Engelsman, founder of Nature & More, believes the system is helping to break the anonymity of fresh produce and proves consumers identify with stories.
'We want to show our organic grower's dedication and commitment towards a better world, and by telling the grower's story we hope to break through the anonymity barrier of the store shelves and empower the consumer to make conscious buying decisions, said Engelsman.
Meanwhile, fresh produce labelling giant Sinclair Systems has announced that it has commercialised what it has called the first and only compostable fruit label.
The labels, which Sinclair has said are a 'first for the produce industry', are made from Polyactic Acid (PLA), which is a thermoplastic-polyester material derived from renewable sources.
'Validated through various trials and development, the Sinclair Compostable label may undergo industrial composting and they disappear without leaving any harmful impact,' the group reveled. 'The label disintegrates in 22 weeks in accordance with test methods ASTM D5338 modified and ISO 16929 modified.'
The new label is compatible with all of Sinclair's hi-speed, tray and hand-labelling equipment, and is suitable for use on all types of loose produce – the perfect complement to organic product and fruit which has a non-edible skin such as avocados, kiwifruit and citrus. 'It's important to our organisation to be able to introduce a sustainable alternative that is environmentally friendly and green,' noted Bill Hallier, president and CEO of Sinclair. We were approached about two years ago by Zespri and through a concerted effort of testing and criteria, we are able to introduce this innovation to the industry.
'The label is engineered to withstand the rigorous elements throughout the global supply chain, yet degrade at the appropriate time,' he added. 'We couldn't be happier with the results.'
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