Demand for raw organic milk to increase by 9% this year, says new OMSCo report

07 September 2010

Demand for raw organic milk is recovering strongly, while supplies have started to decline, according to figures from the latest annual market report from the Organic Milk Suppliers Cooperative’s (OMSCo) - the UK's largest and longest established organic milk cooperative.

The report shows that organic milk sales have held up well in comparison to other organic markets in the face of difficult economic circumstances, driven by a low organic premium and a successful marketing programme, and predicts a solid performance ahead, with demand slowly improving in both liquid milk and yogurt; the two largest sectors of the market. Overall demand for raw organic milk is expected to increase by 9% in the current year.

The report also reveals a significant difference in performance between the major retailers, where stable distribution and access to promotional slots have proved to be crucial to maintaining strong performance. There are, however, some major challenges for the organic dairy market going forward. Organic sales still account for less than one in 30 pints sold and educating consumers about the benefits of organic dairy farming will continue to form the basis of OMSCo’s ongoing marketing campaign, which includes a new TV campaign.

“The organic sector has faced challenging times, but we are pleased with recent performance data, the effect of which is becoming evident in pressure on supplies," says Richard Hampton, sales and marketing director for OMSCo. "While there is more to do to increase the market share of organic dairy products, we remain optimistic about the future. OMSCo’s priority in the year ahead will be to continue to educate consumers and support our members.”

Key report highlights:

  • Dairy is the single biggest sector of the organic market, accounting for one third of all organic sales
  • Demand for raw organic milk is expected to increase by 9% in the current year, driven by improved performance of existing sectors and demand from new markets
  • Supplies have increased by 50% in the last four years, but are expected to decline in the current year by 3%. This is the first decline in annual output since the early 2000s
  • The market for organic milk is expected to tighten further, placing upward pressure on milk prices in the months ahead
  • Organic milk is a key consumer entry point into the organic market. While the low organic premium is a distinct advantage to the dairy sector, the benefits of organic milk are less well understood than for organic food in general. The need for consumer education continues to be paramount
  • Growth potential remains enormous, with organic sales still accounting for less than 4% of total dairy sales.
For more information or for a copy of the report, call 0117 906 4511.

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