Organic market slips in 2012 despite increase in online sales
A report by the Soil Association has shown that the organic market has dipped by 1.5% in the UK although sales are increasing online.
The Organic Market Report found that overall sales of organic products fell from £1.67 billion in 2011 to £1.64 billion in 2012. However the report also highlights key areas of growth in online retail, independent outlets and a shift towards younger consumers during 2012.
The report findings show that organic shoppers are increasingly choosing the convenience and variety offered by online retailers and specialist stores instead of the more limited ranges offered by supermarkets where sales of own-label organic ranges fell 11.2% last year.
Online organic brands Ocado, Abel & Cole and Riverford saw a 10.3% rise in sales while Sainsbury’s increased its online organic sales by 48%. Independent outlets saw a 0.7% uplift in sales, covering box schemes, mail order, farm and health-food shops, farmers’ markets and catering.
The report also identified a growing ‘Jamie’ generation of ethically aware consumers under the age of 35 who significantly increased their average spending on organic products in 2012.
Separately, figures released by Kantar Worldpanel show that the horsemeat scandal has had a positive impact on organic sales. In February 2013, total supermarket organic sales increased to their highest level in nine months, growing by 8.4% compared to January. Independent organic meat suppliers have also reported an increase in sales of up to 20% over the past month.
Jim Twine, Soil Association business development director said: "In the worst economic downturn in living memory, it’s not surprising to find subdued sales of a wide variety of goods and services- and the UK organic sector is not immune to these. Despite a decrease in sales overall, there are areas of significant growth highlighted in the 2013 Organic Market Report. The Soil Association remains confident the UK organic market will return to growth – it is more difficult to know exactly when.
"There is a real risk that if retailers do not work more closely with UK organic farmers and growers, the market could become restricted due to supply shortages. The report shows that when retailers have invested in their organic range their share of the market grows – and the converted organic consumer remains very loyal."
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