Eighty-three percent of households worldwide bought organic products in 2011, report says; industry grew 8.8% in 2010

Nevin Barich

BRISTOL, England , March 5, 2012 (press release) – Report summary

Global sales of organic products continue to defy the economic downturn, growing by 8.8% in 2010 with growth continuing into 2011. The only exception is in the UK where, despite areas of strong growth and improvement in the long term trend, overall sales were down by 3.7% in 2011, according to the latest organic market analysis by the Soil Association, sponsored by Triodos Bank.

Strong growth has continued in all other major European organic markets and in the US, the world’s leading organic market. Sales of organic products in China have quadrupled in the last five years, and Brazil is reporting an annual growth rate of 40%. Market analysts predict that organic sales in Asia will grow by 20% a year over the next three years.

In the UK, the main cause of the market’s overall decline was a 5% drop in multiple retail sales, which account for 71.4% of organic food sales. Reduction of choice, lack of communication about the reasons to buy organic products and a lack of investment in own-label organic ranges are the key factors of this decline.

Despite the tough environment, there are a number of UK organic success stories including baby food (+6.6%); lamb (+16%); poultry (+5.8%) and cosmetics (+8.7%). Innovation in retail has benefited the sector with sales through box schemes, home delivery and mail order up by 7.2%.

Other key findings of the Soil Association’s Organic Market Report include:

* The growth in sales through box schemes, home delivery and mail order (up 7.2% to £167 million) meant that independent retail sales increased their share of the organic market to 28.6%.
* Waitrose saw sales decrease by 2.2% compared to a 9.5% drop in the combined sales of the other six leading multiple retailers.
* Local and direct sales of organic fruit and vegetables and supermarket sales of organic fruit held their own, despite a drop in sales of organic vegetables and salads through multiple retailers.
* Dairy products and fresh fruit and vegetables continue to be the most popular organic categories accounting for 29% and 23% of sales respectively.
* Outside the retail sector, the restaurant and catering sector grew by 2.4%. Notable successes in 2011 include an increased take-up of organic food in schools, nurseries and hospitals through the Soil Association-led Food for Life Partnership and Food for Life Catering Mark.
* Soil Association Certification, the UK’s leading certifier of organic food and farming, reports that the turnover of its licensees increased by 0.5% from April 2011 to January 2012.
* UK organic land area decreased by 2.8% and represents 4.2% of farmland. The most encouraging picture was in England where the rate of conversion slowed but fully organic land area increased by 16%.
* 8 out of 10 households (83%) bought organic products in 2011.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.