Organic food sales fall

21 March 2013

Posted by Satvir Bhullar

Sales of organic food dropped in 2012, according to the Soil Association.

The organization's annual report found that total sales fell 1.5 per cent to £1.64 billion. This is a continuation of a downward trend that has been linked to poor economic conditions in the UK. Sales dropped by 3.7 per cent in 2011.

"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," the Soil Association's Business Development Director Jim Twine commented.

This is in stark contrast to the rest of Europe, where organic food sales have grown by 25 per cent since the start of the economic downturn in 2008.

Rob Sexton, Soil Association Chief Executive, said: "Our government has much to learn from its European counterparts who back the organic sector strongly through a combination of environmentally based producer support, firm targets for public-sector procurement of organic and investment in promoting organic products."

However, there is some positive news for the sector, as sales online and in specialist stores have shown signs of growth. Purchases made on the internet now represent ten per cent of spending on organic products through the major retailers, compared to just 5.7 per cent of all food and drink spending. This amounts to shoppers paying £4.1 million a week for organic goods.

Ocado has increased its sales by more than six per cent to overtake Asda and Morrisons to become the UK's fourth largest organic retailer.

The Soil Association also claimed the recent horsemeat scandal has had a positive impact on organic sales. It pointed to research by Kantar Worldpanel, which found that supermarket sales volumes rose by 8.4 per cent in February compared to January.

However, the organization warned that organic farmers face challenging conditions in the year ahead due to high-feed and fuel prices and the impact of adverse weather conditions.

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