Survey Reveals Organic Export Growth
Now well into its fourth consecutive year of growth (7.1%) the UK organic market, confident that the bad old days are long behind it, needn't look over its shoulder. It appears that the four year decline from 2008 was an isolated incident. Whilst we witnessed the UK organic market go backwards, other EU organic markets and indeed the majority of global organic markets, continued to grow.
With the UK clearly going against the flow during this difficult time, supporting businesses in their export efforts seemed like the logical thing for Soil Association Certification to do. From modest beginnings, the Organic Export Support Program has evolved to keep pace with the changing opportunities. But what has changed?
Organic growth is global
Fast forward to 2017 and although interest in export continues, the context has changed. Valued at an estimated $64B in 2012, the global organic market soared to a staggering $81B last year. Not only is there an even bigger market for UK exporter to now reach, but a weaker pound means even more favourable conditions for export.
Soil Association Certification’s 2017 survey of licensees provides a sense of just how strong exports are. Despite the pressures on the industry FX issues bring, notably increased raw material cost in some cases, more 50% of the 125 businesses who responded to the survey reported exports growing by more than 10% last year. Over a quarter reported growth exceeding 25%.
Destination and aspiration
Undaunted by Brexit, UK organic businesses may be exporting more than ever before, but where is everything going when it leaves UK ports? Perhaps just as importantly, where would organic businesses like it go in future?
Our survey reveals that Germany, France and the Netherlands remain prime destinations for organic exporters, with 46% of current exporters focusing on one or more of the three. When asked where businesses want to go next, this region featured less, with only 21% looking to Western Europe.
Another important territory for organic is Scandinavia, which is home to some of the highest growth and penetration organic markets anywhere in the world. The region might be the second most significant for current exports in our survey (19% of responses), but the number with a future interest in this region tails-off, with only 13% indicating that Scandanavia is in their sights.
Is there a lack of fresh export interest in the EU region, or does this simply spell a shift in export focus to newer territories? Interestingly when it comes to Asia and North America, around 8% of respondents said these regions accounted for current export business. Both, however rose to 21% and 14% respectively when we asked about future export intention.
Getting support and accessing Asia
What's certainly clear is the growing interest organic businesses are showing in emerging Asian and fast growth North American markets, reassuring, given our decision to specifically focus export efforts on these two regions for 2017 and 2018!
Asia remains a particular focus for our support throughout much of 2017. Working with partners such as the Department for International Trade (DIT) and the Food and Drink Exporters Association (FDEA), we’ll be supporting organic businesses and helping bulid export capacity by sharing our know-how, helping businesses access Asia's new fast growth markets, including China, South Korea, Japan and Malaysia.
For those wanting more specific information about potential organic export countries, our Global Guide is a great place to start. Businesses who want to improve their understanding of organic and the Asia region specifically are recommended to join our half-day Organic Asia Access Workshop on the 27th April. With support from the FDEA, the China Britain Business Council and many other experts, attendees will learn about market access, regulation, labelling, logistics and further opportunities, such as discounted places in our Organic Pavilion at this year’s Natural and Organic Products Asia show in Hong Kong this August.
Grow exports, grow your business
The Soil Association recognises the ever more important role export will play in helping grow our organic market. Specific reference to organic products in the recent DIT five year export plan shows that the UK government recognise this too.
Whether your target is Asia, North America, Scandinavia, the Middle East, Australia, or just accross the channel, there’s never been a better time to export organic and grow your business.
Supply Chain Development Manager, Lee Holdstock leads our Export Support Programs. Contact him to find out more about export support.
Interested in supported, low-cost exhibiting in the US? Why not join the Soil Association’s British Organic Showcase in March 2018 at Expo West, the world’s largest Organic and Natural Trade event, held every year in Anaheim, CA.