Some Notes from the Soil Association Organic Briefing 26.09.11

Held at the Rudolf Steiner Centre, London

  1. OCADO

Lawrence Hene

Head of Grocery Retail

Ocado (www.ocado.com)

1.1Market Share

  • Organic is 10% of sales and still in growth (11% year-on-year: however total business grew by 20%)
  • Ocado has less than 0.5% total retail shares but 5% of organic sales, ie over-trades on organic x10
  • Believe that future growth will come from brands not own-label
  • Total range to expand to 40,000 SKUs, 10% to be organic

1.2 Reasons For Outperformance

  • Wider range – 1391 organic SKUs versus Waitrose (1067), Tesco (634), Sainsbury’s (439)
  • More organic brands (1100 vs 300 Duchy/Waitrose own-label)
  • Availability of information and content onsite
  • Better customer profile

1.3 Customer Profile

  • Average shop = 50 items
  • Over 40% of customers are under 40, almost 10% are over 60
  • 60% of customers have household income below £60k
  • 14% have a baby
  • Under half of customers live within the M25
  • Coverage of UK is now 72% of consumers
  • 20% of sales now made via mobile phones (early adopters)
  • Organic sales are 7-11% of total sales across the UK
  • 79% of customers buy at least 1 organic item
  • 27% of customers buy at least 5 organic items
  • Organic brands outperform organic own-label (Waitrose and Duchy)

1.4 Adding new lines

  • Possible from Feb 2012
  • Write to LH as the first step
  • Sampling a good launch vehicle (highly targetted)
  • Transactional websites possible from next year
  • Website to be personalised “soon”

2      Ed Garner, Kantar

Data generated by recording what 25,000 UK households actually buy (do rather than say)

2.1  Current UK retail scene

Growth is coming only from discounters (+12% year-on-year) and Waitrose (+9%)

2.2 UK organic sales

Year-on-year organic performance (%)

Asda –22

Morrisons –25

Sainsbury’s –2

Waitrose –5

Tesco –7

Overall –8

Organic chocolate now worth £31m per year (w/e August 7 2011)

Challenge: niche organic fixture or mass market run of store?

2.3 Organic penetration

  • 85% of households buy organic in a year
  • 63% of buyers account for 13% of sales
  • 8% of buyers account for 54% of sales

Top 4 organic brands have sidelined organic claim to be replaced by:

  • Sustainable (Duchy)
  • Sense of place (Yeo Valley)
  • Health (Rachel’s)
  • Luxury (Green + Black’s)

3. Helen Browning – new Soil Association strategic plan

“Healthy soil, healthy people, healthy planet.”

Themes

  1. Facing The Future
  2. Good Food For All
  3. Enabling Change

“Celebrate the complexity of organics”

SW 27.09.11