Recession takes bite out of organic product sales

Soil Association report shows premium goods were particularly hard hit in 2008 but there are promising signs that the market may be stabilising

Juliette Jowit
guardian.co.uk, Monday 6 April 2009 17.57 BST

Official confirmation that the organic revolution has stalled came today as the leading industry body admitted sales of many popular and premium products fell last year.
The Soil Association, which certifies about eight out of ten products on sale in UK shops, said the value of sales in 2008 rose by 1.7% to a little over £2bn, but inflation in food prices masked a slump in sales by volume.
The rise in income compared to a 7% increase in overall food prices, said the organisation. "We're inferring from this 7% rise that volume has probably gone down," said a spokeswoman.
Hardest hit were premium brands and prepared foods, such as frozen meals, while popular fruit and vegetables - two of the three biggest selling organic lines - both saw declines.
However, some products appeared to be riding out the recession, especially those linked to high-profile TV shows highlighting animal welfare problems, said the association. The celebrity chef Hugh Fearnley-Whittingstall's series Hugh's Chicken Run may have contributed to a 17.7% increase in poultry sales, while organic milk and cheese sales both rose more than 10%. Textiles and health and beauty products sales increased strongly, although they make up a tiny part of the total market.
Previous reports suggested sales of organic produce have fallen even more steeply: retail research specialist TNS said that at the end of January annual volume sales of bread were 29% lower, fruit 20% lower, eggs 12% lower and vegetables 8% lower.
Martin Cottingham, author of the Soil Association report, said it was "impossible" to predict yet when the organic market would recover because this would be closely linked to the economy.
However, he said there were tentative signs that the market was stabilising after a particularly sharp drop in confidence during the last few months of last year. "October, November and December was something like panic non-buying ... because suddenly it was a recession," said Cottingham. "Some of the people have told me they experienced a demand dip at that time [but] some have said they have either levelled off or modestly picked up in the new year."
The report also said there was a "core" of shoppers who would continue to buy organic and said that long term, the industry should benefit as the UK needed to cut greenhouse gases, including emissions from chemical fertilisers used in intensive farming.