Organic Articles: Organic Britain?

The Organic Consultancy

Organic Britain

by Simon Wright

Just how organic is Britain? Who is buying organic food – and why? Simon Wright, founder of The Organic Consultancy, reviews the latest research on the state of our Organic Nation and suggests where we might be going. This article originally appeared in organiclife magazine for June/July 2001

Introduction

The recent sad scenes in Britain’s countryside have generated considerable debate about the future of UK agriculture. In the past the organic sector has only been able to contribute from the margins but this time The Soil Association, the largest organic certifying body in the UK, has played a major role in deciding what should happen to UK farming. The director of the Soil Association Patrick Holden was an early high-profile supporter of a vaccination programme, and Soil Associaton Chair and organic livestock farmer Helen Browning has been a regular contributor to BBC’s Newsnight. So now is a good time to investigate the contents of the new Soil Association Food and Farming Report, launched amidst much publicity at the London International Food Exhibition in March.

What we buy and where we buy it

605 million of organic food and drink was sold during the year 1999-2000. This compares to 390 million for 1998-99, a growth rate of 55%. To put this into context, most mature sections of the food and drink industry are delighted if they can increase their sales by 2 or 3% in a year! Increasingly we bought our organic food and drink from the major supermarkets, whose market share rose to 74% of total organic food sales. Major supermarkets such as Sainsbury’s (currently Organic Supermarket Of The Year) now sell well over 1000 organic lines in their larger stores, and their determination to sell a wider range of organic products at ever more competitive prices has undoubtedly driven the market. Health food shops lost market share, dropping from 16% to 13%.. However there are alternatives, and the last year has seen the growth of many new channels such as Direct Sales, Farmers Markets, Box Schemes and Farm Shops. What these schemes have in common is a more direct link between consumers and producers, resulting in more local distribution (less Food Miles) and more mud on the potatoes.

There are some big changes in the type of organic food and drink that we’re buying. Whilst organic fresh fruit and vegetables are still the biggest category (230m sales per year) their market share is actually down 7% on last year. That’s because we are buying more organic dairy products (106million), Groceries (97 million), Cereals, bread and biscuits (67million), eggs (31million), drinks (24million) and babyfood (24million). Overall the move is way from simple food like organic vegetables and into more highly processed foods like chilled or frozen organic ready meals. Whilst the organic purist might argue that organic food should never be processed, the public continue to vote with their feet. For example, organic baby food continues to be a major growth area. Lizzie Vann OBE is the charismatic founder of the Baby Organix babyfood company and the sponsor of the Food and Farming report. Lizzie likes to explain the growth in organic food sales by saying that three years ago one baby in five ate organic food, last year it was one baby in three, now it is one baby in two.

Enter the Big Boys

Growth rates like 55% were always going to be attractive to the multinational food companies, and the last 12 months has seen major manufacturers like Mars (Seeds of Change), Rank Hovis McDougall (Enjoy Organic), Nestle and Heinz all enter the UK organic food market. We have also seen supermarkets begin to market best-selling lines such as organic flour, sugar and milk under their own label. The Soil Association is concerned that these developments may undermine the organic market. The entry of large manufacturers selling organic lines like instant organic coffee (Nestle) or ready-made pasta sauce (Seeds of Change) could lead to “a loss of distinctiveness or integrity” in the market. The Soil Association argues that the relative anonymity of supermarket own-label products do not adequately inform consumers about who has produced the food and where it comes from. Sensitive to such criticism forward-looking retailers like Waitrose are beginning to tell their customers more about their own-label organic food and drink.

At the launch of the Food and Farming Report Lizzie Vann was hostile to what she sees as large companies muscling in on the organic market. She fears that they will try and lower organic standards and generally “dumb down” the organic market. Charlotte Mitchell, Managing Director of Go Organic, has a different perspective. “If large companies come into the organic world in partnership with pioneers of the organic movement they will be able to help develop the market with knowledge of the best organic standards. One route to positive change is from within. Go Organic has become involved with Unilever Bestfoods precisely because they wanted to enter the market with a genuine understanding of its principles. ”

Who buys organic food?

The Market Research firm Taylor Nelson/Sofres (TNS) researched 15,000 UK households to generate the data contained in the Food and Farming report, which gives a fascinating insight into why UK consumers are getting so interested in organic food and drink. In summary more households are buying organic food more frequently and spending more each time they do so. Two-thirds of UK households bought something organic in the last year. Currently the average spend on organic food is low at 2.71 per trip. The profile of the typical organic consumer is older, upmarket with a considerable bias towards London and the south of England. 7% of organic buyers account for a startling 57% of all the money spent on organics in a year. Such loyalty means these deeply committed organic buyers are spending nearly 200 per year on organic food (the average household spend is 22 per year).At the other end of the spectrum almost 30% of organic buyers only bought one organic food item in the last 12 months – probably by mistake!

…and Why?

TNS asked 6,500 organic shoppers why they bought organic food. The key reasons given were concerns over food safety, personal health, environmental concern and a desire for convenience. The picture of the organic buyer that emerges is of a someone concerned about food safety (either their own or that of their family), aware about health and fitness (they exercise, look out for healthy foods), concerned about the environment (they recycle, worry about animal welfare) but they are ready to pay more for convenience (internet shopping, home delivery). Interestingly organic buyers tend to watch BBC2 or Channel 4 and they prefer broadsheet newspapers such as the Financial Times and the Telegraph. The relationship between being a dedicated organic consumer and listening to The Archers was not investigated, but a correlation seems very likely!

The Price Premium: Is Organic really so expensive?

When Which? conducted a poll amongst UK consumers in October 1999 nearly half of those interviewed (45%) said that they chose not to eat organic food because it cost too much compared to non-organic foods, and similar attitudes were found in the TNS survey. But does the widely-held view that organic food is a lot more expensive hold water? Not entirely, says the Food & Farming Report. It is important to compare like with like. One example used is fruit juice (see Table 1)

Table 1: The cost of organic and non-organic fruit juice ( per litre pack) over a 12 month period to December 10 2000

	Sainsbury's Taste The Difference	2.40

	Tropicana				1.94

	Chilled Organic fruit juice 	1.68

	Ambient Organic fruit juice		1.54

	Chilled fruit juice		1.36

	Ambient fruit juice		0.52

Source: TNS (2001)

Some non-organic juices – Taste The Difference and Tropicana – were more expensive than the organic juices. When comparing the average price of organic chilled fruit juice to non-organic fruit juice we see a relatively modest premium – here 32p per litre, or 23%. Most research indicates that consumers who are interested in buying organic food are prepared to pay a modest premium – say an additional 15-20%. Much work is currently going on behind the scenes to achieve this sort of reduced price premium without reducing the amount of money paid to organic farmers for their precious crops. In some areas this has already paid off – a large pot of Yeo Valley Organic yoghurt can sell in Sainsbury’s at exactly the same price as 500g of Sainsbury’s natural (but non-organic) Bio yoghurt. But organic products can be too cheap – focus groups have reported that if organic food sells for the same price as non-organic, how can they be sure it is really organic? Certainly the unsuccessful attempt made by Iceland last year to sell organic food at the same price as non-organic shows how difficult it is to get the question of an organic premium right. To high and consumers can’t afford to pay – too low and producers can’t afford to grow the crops.

The Organic Future

Currently the future for organic food in the UK looks bright, although it is difficult to forsee how the aftermath of Foot and Mouth will affect organic farmers. However it is a sobering thought that only 2.3% of agricultural land in the UK is being managed organically, and there are no Government targets to increase this miserly amount. As a comparison the German government has set their farmers the target of reaching 20% of all land to be farmed organically by 2010. The result of this imbalance – a strong UK market for organic food but relatively few UK organic farmers – is that we are importing the vast majority of organic food we eat, possibly as much as 70%. We are a long way from fulfilling the organic slogan of “Think Global, Eat Local” and the Food miles are mounting up.

Of course if the government really wanted to address the problems of ‘industrial’ farming whilst ensuring effective stewardship of the countryside there is really only one sustainable course of action… Prince Charles for Minister of Organic Agriculture!