Companiesandmarkets.com

UK organic food market heavily hit by the recession

Press Release   •   Feb 05, 2013 09:39 GMT

Until the recession hit, demand within the UK organic food market was strong. The industry contracted at an annualised rate of 5.5% over the five years through 2012-13 to £1.64 billion. Industry revenue contracted once the recession took hold of the UK economy and consumers traded down to lower price food.

Organic foods are foods that are produced using methods of organic farming -- that do not involve modern synthetic inputs such as synthetic pesticides and chemical fertilizers. Organic foods are also not processed using irradiation, industrial solvents, or chemical food additives.

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 lamb sales, which spiked by 16% and poultry up by 5.8%. However, it was the sale of organic turkeys that increased the most, by 56%. The Soil Association speculates the reason for that increase is due to a trend towards buying organic for special occasions.

The decline in the UK organic food market has also resulted in a number of organic farmers converting back to conventional methods of farming, causing a decrease in organically-managed land in the UK. In 2011, the area of organically-farmed land stood at 718,345 hectares, down by 3.4% from 743,500 in 2009.

Greater government support is needed to help consumers better understand how food production impacts on the environment, as 18½ million consumers who currently do not buy organic foods are not taking into account ethical issues when buying food.

Revenues within the UK organic food market are anticipated to grow over the five years through 2017-18 at an average 4.7% to reach £2.07 billion. Consumers are anticipated to regain their taste for organic produce as consumer confidence improves and the economic recovery gains momentum.

For more information on the UK organic food market, see the latest research: UK Organic Food Market

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