The imminent and inevitable price war in the UK supermarket sector could potentially be damaging to the development of the organic industry, but Tony Sullivan, Sainsbury’s head of fresh produce, believes that organic premiums will not necessarily disappear.
Sainsbury’s is reigning Organic Retailer of the Year, with almost three per cent of its overall offer now falling into the organic category, significantly above the UK average. Sullivan told a meeting of Argentinean organic producers that Sainsbury’s is committed to its mission of leadership in the organic field, but added that price-based competition may have an effect on the organic market as a whole.
"The UK is becoming much more price-focused and challenged," he said. "But if you look at some of the organic premiums at the moment, they are even increasing. However, as conventional products in general continue to get even cheaper, protecting those organic premiums will be a bigger issue, and that could pose problem for future growth of organics in the UK."
He told the meeting that neither price nor quality should be looked at in isolation, adding: "If price is not consistent and competitive, there is a danger that anyone can price themselves out of the market."
Sainsbury’s, he said, looks at organics as one tier, offering an element of choice for its customers. "We are constantly looking for a point of difference from a source and a way in which we can demonstrate that point of difference to our customers. We want you to come to us and present an opportunity to Sainsbury’s," he added.
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