The UK is the fifth biggest European consumer of organics in terms of per capita expenditure. At £17 a head, UK purchases outstrip all but those in Germany, Austria, Denmark and Switzerland, although it should be noted that the Swiss pile in with an incredible £62 of organics a head a year.
Nicholas Saphir went even further with his analysis of the figures. The UK, he said, is the third largest organic market in the world, after the United States and, again, Germany. Figures to the end of March 2003 illustrated that a market valued at in excess of £1 billion continued to “grow faster than any other area of the food and drink markets”, at 10.4 per cent. The sobering footnote though, is that organics still represent just 1.05 per cent of the overall UK food and drink marketplace.
Fruit and vegetables, as is well-chronicled, is the biggest organic sector - weighing in at 32 per cent. And with 726,400 hectares of organic land, around four per cent of the UK’s production area is converted. There has been a 16.5 per cent increase in fully organic land the last 12 months and home-grown organic produce accounts for around 44 per cent of the total market - to a value of £181m.
It would appear then that organics continue to delve their way deeper into the psyche and hearts of the UK consumer base, albeit at a low level of penetration. But what will drive the future. Well, said Saphir, most pertinent amongst all the factors is cost. “Cost is the most significant obstacle to organic consumption. Middle England is still not essentially buying organic food,” he said.
“The UK consumer has been spoilt for appearance and quality of food and supermarkets are seen as the custodians of safety and quality. It is not like the German and Scandinavian markets, where organic food is looked on as safer - here organics has to be something else, it has to deliver a different premise.”
Tellingly, Saphir’s figures also showed that supermarkets lost one per cent market share in the 12 months to last March. While the all-powerful chains have 81 per cent of retail sales, farmers markets and organic box schemes dug into that with a 28 per cent year-on-year rise. “The catering market represents 50 per cent of all fresh produce sales in the UK and, in terms of organics, it is only just beginning to participate,” he added. “Producers have to understand a fast-changing market. Quality is critical; innovation is essential and image is vital.”
Saphir also pointed to a changing trend among organic purchasers. “We [the UK market] are now way beyond the core ‘green’ consumption. The environmental argument is not swaying the consumer significantly in this market. But outside of that, consumption is mainly being driven by people who have a moment of conscience, who make an intermittent purchase. The key to the future is turning those intermittent purchases into regular purchases,” he said.
“But the market is moving towards being price competitive as well. Looking at organics as a bulk commodity will get you nowhere. If you concentrate on just being an organic supplier, your margin will be squeezed. If you concentrate on producing a high-quality product - that the buyer hasn’t got and the consumer wants... and it’s organic, then the premium can be maintained. If the UK market is where you want to be as a producer or supplier, you must fundamentally commit yourself to understanding it fully.”