Organic market shows improved growth amidst tumbling food prices
24th February 2015
The Soil Association’s 2015 Organic Market Report reveals sales of organic products increased by 4% in 2014. The new figures announced today (24 February 2015) show this is significant growth in a year when both food prices (down 1.9%) and food spending (down 1.1%) fell. Shoppers spent an extra £1.4 million a week on organic products and the organic market exceeded £1.86 billion, bringing sales back to levels in 2009. Growth in sales across Soil Association Certification symbol holders increased by 7.7%.
Dairy products and fresh fruit and vegetables were the most popular organic purchases. Overall, the strongest market growth was through online shopping and box schemes (11.7%) and independent retailers (5.7%) which offer the choice and convenience of extensive organic ranges in one place. More than a quarter of spending on organic products (27.9%) is in the dairy aisles with yoghurt sales increasing by 13.8% and dairy sales increasing by 6.5% -a stark contrast to the 3% contraction of the non-organic dairy market.
With nearly one third (29%) of shoppers seeking out ethically sourced and environmentally friendly products and over two thirds (68%) making the choice to support local farmers and businesses1, the organic sector allows consumers to make more environmentally sustainable choices, with over 83% of UK households purchasing organic products in 20142. Feedback from retailers indicates that shoppers are becoming more health conscious and organic products offer answers to questions about food quality and provenance. Nutritional credentials of organic received a significant boost in July 2014 when landmark nutritional research from Newcastle University showed organic crops and crop-based foods (including fruit, vegetables and cereals) are up to 60% higher in a number of key antioxidants compared to non-organic3.
Sales of organic eggs and poultry were up 15.8% and 8.2%, while non-organic sales dipped by 6.2% and 3.3% respectively. There were also sharp increases for a wide range of other products against a background of sliding non-organic sales including fresh fruit (up 6.4%), tea (up 13.7%), cereals (up 4.2%) and biscuits (up 7.2%). sales of organic vegetables fell by 2%, but in a context in which non-organic sales plummeted at five times this rate. There was also significant growth in organic supply into catering, (13.6%), reflecting dynamic growth of the Soil Association’s Food for Life Catering Mark in schools, workplaces and hospitals - the market exceeded £1 million a week for the first time and is now worth £55.8 million. Health and beauty (up 20%) and textile (up 3.4%) sectors also grew in 2014.
Helen Browning, Soil Association chief executive, said; “Three years ago, commentators were writing off the organic market in the UK. Now, with a third year of steady growth, and against a falling overall food market, it’s clear that reports of organic food’s demise were premature to say the least. This reinvigoration may be partly related to an improving economy, but it’s also testament to the fact that retailers and manufacturers who continued to invest in organic lines have continued to thrive. Now, even the discounters are beginning to stock organic ranges.”
Innovation is helping drive growth, with the organic sector investing strongly in marketing and new product development. 2014 saw more organic versions of established brands, organic recipe boxes for busy occasion shoppers and wholesalers selling direct via mainstream online shopping outlets. The organic sector is embracing innovation in a changing retail landscape with brands adding new and innovative products, keeping customers interested in the sector. The mood among organic business is confident with 63% predicting growth in 2015 and six out of ten of these (62%) anticipating double-digit growth.
For media enquiries, please contact:
Natasha Collins Daniel, Press Office Manager: 0117 914 2448/ 07827 925380 – Ncollinsemail@example.com
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To download a copy of the 2015 Organic Market Report visit: http://action.soilassociation.org/page/s/marketreportjournalists - The Organic Market Report may only be used for editorial purposes. Not for external distribution.
A selection of images and infographics supporting the organic market report are available here http://bit.ly/1DNm9Y0
- eDigital Research for Waitrose Dec 2014
- Nielsen Homescan Total FMCG Year to 16/8/2014
- “Higher antioxidant concentrations and less cadmium and pesticide residues in organically-grown crops: a systematic literature review and meta-analyses.” Baranski, M. et al. British Journal of Nutrition, July 15th 2014.
Key findings from report
- Sales of organic products in the UK increased by 4% in 2014 to £1.86 billion. This is remarkable growth in a year when food prices fell by 1.9%, and consumer food spending by 1.1%.
- Independent stores and online shopping for organic are still offering the strongest growth opportunities.
- The leading product sector in 2014 was dairy, accounting for over a quarter of all spending on organic products. Dairy sales increased by 6.5% and yoghurt sales by 13.8%, in stark contrast to the 3% contraction of the non-organic dairy market.
- Organic in the catering sector grew by 13.6%. Thanks to the Soil Association’s Food for Life Catering Mark, organic food to the value of more than £7 million is being served in nurseries, hospitals, universities, workplaces and an amazing 3,300 schools.
- Organic health and beauty and textile sectors grew in 2014 too – by 20% and 3.4% respectively.
- The nutritional credentials of organic products received a significant boost in July 2014 when an extensive research study led by Newcastle University showed that organic crops and crop-based foods (including fruit, vegetables and cereals) are up to 60% higher in a number of key antioxidants than their non-organic counterparts. The findings shatter the myth that how we farm does not affect the quality of the food we eat.
- Increased consumer demand has not yet fed through into increased organic production in the UK. But a key area of uncertainty has been removed, with the announcement of new CAP support payments for organic farmers from January 2016 – at more generous levels than many expected.
- The organic sector is investing strongly in marketing and new product development - whether it’s new organic versions of established brands, or ideas such as organic recipe boxes for busy occasion shoppers and wholesalers selling direct via mainstream online shopping outlets, the organic sector is embracing innovation in a changing retail landscape.
- The mood is confident amongst organic businesses: 63% of leading organic businesses are predicting growth in 2015, with six out of ten of these (62%) anticipating double-digit growth.
- The United Nations has designated 2015 the Year of Soils. What better time to build wider recognition that the way we farm is fundamentally linked to the quality of the food we eat, and to take further steps towards a healthier future for soil, people and planet.
About the Soil Association:
The Soil Association was founded in 1946 by farmers, scientists, doctors and nutritionists to promote the connection between the health of the soil, food, animals, people and the environment. Today the Soil Association is the UK's leading membership charity campaigning for healthy, humane and sustainable food, farming and land use. To find out more visit www.soilassociation.org