Organic slump a short-term problem

Any recent decline in sales of organic produce is a “short-term problem”, Soil Association policy director Peter Melchett said this week.

Recent TNS figures suggest that the organic bubble might be bursting, as sales of some food lines have fallen in the four-week period to August 10.

But Melchett told freshinfo: “I don’t think there will be any overall drop in sales of organic food this year, although there is a significant drop in overall food sales. We are still expecting 10 per cent growth this year and despite the TNS figures, Asda, Waitrose and Sainsbury’s all say that they are bucking the trend [in slowing sales of organics]. Asda, for example, has seen the biggest growth in the last six months, as it has improved availability.”

Melchett stressed that the picture is not a straightforward one, and research that the Soil Association commissioned to be carried out by consultancy Andersons has shown that the cost of inputs from oil and gas will affect organic production less than non-organic production.

The study looked at potatoes and onions, as well as cereals. “If oil reaches $200 (£112.24) a barrel, all crops will move a lot closer in profitability and, certainly on combinable crops, profitability of organic production will overtake that of conventional,” said Melchett.

But as the major multiples gear up for Organic Food Fortnight, which kicks off this weekend, the supermarkets were criticised in the South West regional press by Riverford Organics founder Guy Watson. He told the Western Morning News that the slowdown in sales was due to “attention-grabbing” by the major retailers as they claim green credentials.

Melchett said he believed there was an element of truth in Watson’s view. “He might be right in the short term, but realities will kick in for any production process that involves turning oil into food,” he said.

Organic Food Fortnight, run by the Soil Association, is largely seen as an opportunity to reinvigorate sales of organic produce at the major multiples as they fight a price war in the category.