You wouldn’t think that news of a double-dip recession would be good for the organic fruit and vegetable industry, having been one of the first sectors to take a hit three years ago. But it seems that the category could benefit from an “enough is enough” attitude that has emerged.
That new car, the annual holiday and larger purchases have been pushed to the wayside for so long that some consumers are throwing caution to the wind and not skimping when it comes to food. This has been seen across more premium-end retailers and lines, but it looks like it’s also affecting organic trade.
“The Kantar Worldpanel data is historic and obviously a reflection on the last 52 weeks,” says Ethical Fruit Company’s (formally Organic Farm Foods) managing director Adam Wakeley. “I can agree with the figures up until December - when our business was experiencing a four per cent decline in sales - but since then we have seen growth, especially in organic grapes, where we have seen significant growth. We are budgeting to deliver a 10 per cent increase in like-for-like sales this year.”
It’s clear from retail expenditure shares looking at total grocery against organic shares that the retailers putting the effort into the sector are reaping the benefits. A retailer that has always been consistent in its pledge to organic, Waitrose, is overperforming while the sector’s market is in general decline, according to the latest Kantar data.
Tesco and Sainsbury’s are also edging forward, as Morrisons, Asda and The Co-operative’s percentage share slips back.
“It is a mystery why organic is positioned in the multiples the way it is in this country,” says organic fruit and vegetable box scheme provider Riverford’s marketing manager Rachel Watson, who describes the organic-box offer as “holding steady”.
“It’s so different across Europe and even in the US, and treated as more mainstream. Most UK retailers don’t give it the shelf space. Waitrose does a lot better and this reflects a great commitment, which it has always shown.”
Looking outside the mainstream retailer sphere, the addition of an organics offer is proving invaluable. Online retailer Ocado represents only 0.45 per cent of the grocery retail market in the UK, but accounts for 10 per cent of organic grocery.
“ABC1 consumers are attracted to the organic offer and retailers benefit from having more affluent consumers in store,” explains Wakeley. “Consumers who buy organic generally buy three times as much as an average shopper, because they need more volume to feed a family, say, or they buy higher-priced products across all items, like they’ll buy a premium-priced bottle of wine. Tesco, Sainsbury’s and Waitrose are more consumer savvy and going well because of that.”
Meanwhile, organic fruit and vegetable box schemes are holding their own in the market. “Our new customer flow is very good,” states Watson, explaining that a constant volume of new products coming through the business - for instance, this month, Cape gooseberries, different herbs and salsify - keeps interest up. “People do want to buy, but maybe not as frequently as they have been. They also seem to be attracted to the sector for more selfish reasons, like they don’t want to put pesticides into their body, rather than anything environmental, which is quite typical behaviour for a recession. We continue to make sure our food is affordable and attach more value to it. Our challenge has remained the same for many years and that’s to educate our customers on how to cook.”
The organic grocery sector hopes it is entering a long-awaited new phase, with big names such as Green & Black’s, Rachel’s and Yeo Valley taking the cause to mainstream level in the UK. Hopefully the fresh produce organic sector will be able make the most of this. As Wakeley puts it: “It’s up to forward-thinking supermarkets to support organic more and more and place some weight behind the movement.” -
NEVER GIVE UP ON A GOOD THING
The environment is at the heart of Univeg Katopé UK’s core ethos and as a result, the organic category sits nicely within the company. David Maris, technical manager for the Fairtrade and organic sectors for Univeg Katopé UK, talks to Elizabeth O’Keefe
How would you describe the organic market at the moment?
The economic downturn and continuing price pressure on conventional fruit has increased the differential between conventional and organic. This has had an impact on organic sales and our organic offer has diminished in terms of range and sales volume. At the same time retailers have reduced their on-shelf range for minor products to focus on core lines.
How has this affected the organic offer at Univeg?
As a whole, the fact that organic products have disappeared from retailers’ shelves has meant that consumers have turned to box schemes and other formats to access organic products, delivering a boost for some sectors.
However, our large organic top-fruit production in Argentina and expanding organic dried fruit sales have been positives in a negative market and lessened the impact for us as a business.
Your organic range is vast, from main crops to more
specialist items. Can you outline the thinking behind the lines and what success they have seen?
Our range development was driven by demand from our retail customers and our ability to access organic production.
We grow and import of a wide range of organic fresh produce. This includes organic dates from Israel, organic apples and pears from our own farm in Argentina, and organic ginger and garlic from China.
Where do you think the organic market is going? Does Univeg have any new plans up its sleeve?
The organic market has always benefited from consumers having greater disposable income, as well as widening concerns regarding food scares and food safety. Worries about health and the environment drive the organic sector forward and talk about GM crops, antibiotic use and factory farming plans will keep the organic ideal a focus for some consumers. A greater environmental awareness, particularly among young people, will help maintain this position.
I believe the market will return, albeit in parallel with the economy.
Univeg has its core strength in the European market, where organic is much stronger with consumers, and Univeg UK can offer its customer access to this supply as and when the market starts to move forward.
The environment is at the core of Univeg’s ethos and we continue to develop techniques that improve and enhance the environment of our production sites, as well as strategically plan to find locations where future production will be sustainable. -
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