Soil Association Organic Trade Briefing, London, 23.09.14

 UK Market Overview

Mike Watkins, Nielsen

  • Changing Shopper Behaviour
  • Weakening Consumer Demand
  • Rapid Store Expansion
  • Growth of Discounters
  • Shift To Online

“Shoppers are looking to save money, expect promotions, shop around more and offer less loyalty to retailers and brands”

 46% of branded sales by value are sold on promotion

 Consumer confidence at its highest level for 7 years but this is not leading to increased spending because of increases in cost of living

 Year on year organic sales are ahead of total market at +1.2% (over last 4 weeks +3.2%, highest growth rate for 4 years)

 Challenges to Retailers

  • Household budgets still under pressure
  • Price discounting of non-organic by “big 4” supermarkets
  • Pack size change to retain price point
  • Less food wasteage / larder stocking
  • Structural Shift to Discounters and Value Retailers

 Shoppers Want To Support Organics

68% want to support local farmers and companies

29% shoppers are willing to pay more for products that are ethically produced

 Opportunities for Organic Retailing

  • 83% of households buy organic
  • Sainsbury’s, Tesco and Waitrose account for 70% of organic sales (Tesco now the biggest)
  • 14% of organic sales are online: Ocado has 6% of total organic sales (hugely over-indexing)

 Key Reasons For Buying Organic (in order)

  • No pesticides
  • Taste
  • Environment
  • Animal Welfare
  • Perceived Health Benefits 

Key Reasons For Not Buying Organic

1. Price

2. Don’t understand what organic means

 Outlook and Viewpoint


  • Planned Purchasing (only when needed)
  • Saving Money (Discounters)
  • Little + Often (smaller shops)
  • Online has cannibalised out-of-town sales (average basket spend in both cases is around £50) 


  • Growth to improve in 2015
  • Private label seen by supermarkets as a panacea for growth
  • Structural changes in retailing to continue(online, small stores, new store formats, new channels)

“The organic message is getting heard and leading to sales growth.”


Supplier Perspective

Andrew Ovens, Produce world

 Pyramid of Organic (Vegetable) Buyers

  • Smallest Group- Dedicated (buy organic wherever it is available)
  • Premium (will buy organic when it is the best quality available
  • Selective (will buy organic when they think it is worth the extra cost)
  • Largest Group- Occasional (will only organic when on deal)

 Source: Focus groups, 2014

 Decided to concentrate on Premium

  • Value taste and are foodies, not eco-warriors
  • Do not buy exclusively organic
  • Regard seasonal / organic / Finest / Fairtrade as interchangeable – all are better than “normal”
  • Value packaging as it guarantees organic integrity
  • Buy for occasions
  • Pre-Family and Post-Family biggest sectors

 NB Soil Association Press Release