The UK organic sector is still in decline but growth is predicted as consumer confidence returns, according to the Soil Association.

Demand for UK organic food stopped growing at the end of 2008 as the downturn began to hit consumer spending. In 2009, sales dropped 12.8%.

However, Finn Cottle, acting trade director for the Soil Association, said yesterday (19 July) that the category is expected to grow again on the back of investment from organic brands and a renewed focus from retailers.

“The organic market is still in decline but improving. It has been on a really, really steep decline but suddenly the change I have seen in businesses is that everyone has had to dig deeper and think differently about organic.

Yet she added: “The branded sectors are generally more resilient and growing. Confidence is strong. There is a lot of money being spent on organic and companies are predicting growth.”

Cottle said that while sales of organic fresh poultry fell GBP6.3m (US$9.6m) for the year ended 13 June 2010, a number of smaller categories have experienced growth including herbs and spices, butter, dry pulses and cereals, and honey.

She added: “Retailer strategies are swinging back to premium foods, which are back into growth again. All brands are spending huge amounts on organics, which is a sign of returning confidence. And innovation is happening.

“We are very, very positive about organic growth. We don’t see it dropping further,” Cottle insisted.

Certainly the initial impression of the store is excellent – open, spacious, light and inviting.  A wide central aisle leads to hero sub-sections such as butchery, produce, dairy and food-to-go. At the back of the store is a small café and an extensive selection of booze, whilst grocery is off to one side. So far, so good. I could do without some of the faux-retro fittings but that is a minor quibble.

There are a lot of staff in evidence, some engaged in a wine tasting which I regretfully declined (interview with daughters’ teacher later today).  Lots of brands you would expect in a fine food outlet – Seggiano, Olives Et Al, Cawston Press. A smattering of organic, a soupcon of Fairtrade and very little Free From.

I think what we have here is a large, rather nice deli. It is not a health food shop, and to be fair Union Market describes itself on its website www.unionmarket.co.uk as being about “traceable, natural, regional, high quality, best practice British food. We will be affordable and accessible.“

Where I disagree is the use of the word “affordable”. A small (400g) non-organic spelt loaf cost £3.45 which I think is only affordable on a regular basis to people with very deep pockets. And certainly there are plenty such people who live in and around Fulham Broadway. I hope they will support Union Market – it is a bold and confident enterprise and I hope it does well. However I will be staying on the District Line for a few extra stops to Westbourne Grove, where a more traditional healthfood shop at Planet Organic awaits.

Full presentations will be available here:

www.fdin.org.uk/seminars/previous-seminars-and-documentation

1. Summary

• An excellent seminar that helped explain why Fairtrade has done so well recently and suggests strong future growth in the UK and elsewhere
• Seminar was poorly attended relative to previous seminars on this subject but this may be due to poor marketing by the Fairtrade Foundation as content and organisation were both of very good quality

2. Key Attendees

• Quentin Clark – Head of Sustainability and Ethical Sourcing, Waitrose
• Simon Hinks, – Product Technical Manager, Sainsbury’s
• Joe Osman, Sourcing Director, Traidcraft
• Jane Wakeling, Regional Sourcing Manager, Compass

3. Key Points From Presentations

3.1 Consumer Spending In Tougher Times

Jonathan Banks (ex-Nielsen)

• Did recession change consumers view of Fairtrade? No
• Is it all about cheap Private Label and Discounters now? No
• Are we no longer worried about Doing The Right Thing? No
• Will Fairtrade suffer in the same way as organic has? No
• What is the way forward for Fairtrade? Brand equity, integrity, quality, value for money, values

3.2 Fairtrade and the Ethical Brand World

Tom Ellis, 1HQ

• Consumer understanding of Fairtrade centres around treatment of suppliers, treatment of food (eg whether free range) and treatment of environment
• Consumers can be divided into ethically inactive, ethically aware, ethically active and ethically motivated (majority are in first 3 groups) – consumers can move between groups during the same shop!
• Small brands are seen as inherently more ethical than big brands
• Threats to future success of Fairtrade – teaming up with big brands could lower standards, emphasis on local, seen as old-fashioned when something newer comes along

3.3 Fairtrade Foundation Communications & Policy

Barbara Crowther

• Fairtrade is top-of-mind ethical label (mentioned by 32% of people unprompted)
• Key understanding is that Fairtrade producers are fairly compensated (64%)
• Challenge is to explain that Fairtrade is more than about price
• Key barrier to purchase is price (64%), followed by availability / visibility (23%)
• Targets are Active Enthusiasts and Mainstream Enthusiasts (with Passive Beneficiaries = 81% of population)

3.4 From Pioneer To Brand Leader

Craig Sams, President, Green & Black’s

• Green & Black’s turnover now £150m
• = 10% total block sales
• 30% annual growth

3.5 Fairtrade Certification – From Niche To Mainstream

Pieter Louw, FLO-CERT

• DAP now renamed DAKK
• FLO Fairtrade Certification system ‘not designed to see whole supply chain’
• Recession has lead to FLO-CERT achieving 25% cost savings already, current mantra is ‘how can we drive costs down?”
• Refining current activities eg SCORE
• Adding new activities eg certifying producers as Low Carbon
• Moving into new markets eg organic certification
• But no-one else can certify to FLO standards until at least 2012

3.6 Embedding Sustainability As Part of the Company DNA

Alison Ward, Cadbury

• Segment consumers into Ethical Seekers (= Deep Greens + Dippers), Feel Good Factors (No Sacrifice) and Anti-Ethicals: first two groups are in majority
• “Do It First, Tell People Second”
• “Your Desire To Tell Exceeds The Consumers Capacity To Listen”

One reason that Fairtrade has done so well even during the recession is that it offers a single, simple message – buy Fairtrade and you help disadvantaged farmers. In comparison organics offers a myriad of benefits which can lead to consumer confusion. The Organic Trade Board talked to 3,000 organic buyers  ( www.whyiloveorganic.co.uk/reasons-to-love ) and concluded that these are the top five reasons why consumers buy organic:

• more natural and unprocessed
• better for the planet
• tastes better
• better for health
• restricted use of pesticides

At least some of these five reasons will work for most products and most consumers. By focussing on these five simple clear statements we can help consumers justify to themselves the increased cost of buying organic.

More challenging is getting the tone of communication right. Again, Fairtrade has fared better than organics because it has made a stronger emotional connection between consumers and producers. Real people grow organic food and we should talk about them more. Abel and Cole are good at doing this ( www.abelandcole.co.uk/blog/category/great-growers ).  Not only are organic producers passionate about the crops they grow they are also amongst the most committed guardians of our countryside, and we should make more of this.

The theme of this years Organic Fortnight (September 3-17) is ‘Choose Organic Everyday” and if everyone just buys one organic product per day the UK market will be revitalised. No great sacrifice with so much great-tasting organic food and drink available at increasingly affordable prices. Let’s do it!

The science examining the comparative health effects of organic and conventionally grown foods is shockingly woolly. Much less woolly is the recommendation of a US government panel earlier this month to choose organic foods – or at least wash conventionally grown produce – because you know what, we just don’t know whether all those chemical residues could cause cancer. There may be no evidence that they are harmful, but nor is there evidence that they are not harmful. What an extraordinary admission.

It is this lack of evidence one way or another that could be a boon for the organic food industry, as consumers increasingly take a ‘better safe than sorry’ approach to their diets. Organic food might be healthier, after all, and conventionally grown foods might cause cancer.

So what’s going on?

The latest review of research comparing the relative nutritional value of organic and conventionally grown foods was published in the American Journal of Clinical Nutrition last week. Of an impressive 98,727 articles published over the past 50 years, the researchers found only 12 that they deemed relevant. They concluded that the existing evidence is not sufficient to suggest that organic food is any healthier. The same researchers came to the same conclusion last year, when they looked at 162 studies. But so what?

Ignore the headlines that shout ‘Organics not really healthier’ or ‘Organics are waste of money’ – the truth is that the most significant finding of these reviews is that there is a paucity of well-conducted research.

A large number of studies were excluded because they did not specify an organic certifying body; there was no information on the cultivar or livestock breed; no statement of which nutrient or nutritionally relevant substance was reviewed; no information on statistical methods; or no information on laboratory methods.

“A surprising and important finding of this review is the extremely limited nature of the evidence base on this subject, both in terms of the number and quality of studies,” the authors wrote.

Surprising and important indeed.

However, in my view, examining whether an organic carrot contains more antioxidants than its conventionally grown cousin rather misses the point. Many people do not buy organic foods because they think they are more nutritious (although of course some do, and will continue to do so, whether or not there is scientific evidence to validate their choice).

No, a large number of people choose organics because they are worried about chemical residues, both for their effects on health and on the environment. And that’s where the lack of evidence becomes rather startling.

The US President’s Cancer Panel’s recommendation to choose organic (or wash conventional produce) was based on a similarly surprising and important lack of research on the safety of many of the more than 80,000 commercially available synthetic chemicals in the US food supply. Cancers resulting from environmental factors could be “grossly underestimated”, the panel said, because few of those chemicals are regulated.

In the United States buying certified organic food is also the surest way to avoid growth hormones or genetically modified ingredients, other elements of the food supply with an arguably small amount of convincing research. Organic food suddenly seems very attractive indeed – and the organic sector continues to reap the benefits of a lack of clear evidence, as sales continue to grow.

So the debate over whether organic foods bestow real health benefits rumbles on.

As for me, I would rather opt out of an experiment that could find a dietary link with cancer rates thirty years down the line.

As I scrub my conventionally grown fruit and veg, I can only hope that there may be answers in the next 100,000 studies.

Caroline Scott-Thomas is a journalist specializing in the food industry. Prior to completing a Masters degree in journalism at Edinburgh’s Napier University, she had spent five years working as a chef.

Last year the number of organic producers in France rose by 23 per cent compared to 2008.

“In 2009 each month saw more than 300 producers signing-up to the state’s organic scheme,” estimates the country’s organic agency Agence Bio.

In 2008, organic food products hit €2.6bn, representing 1.7 per cent of the overall national food market in France. While still just a small slice of overall food sales in France, the organic market has proven to be resilient in the face of a recession that has otherwise knocked market growth. In 2009, 46 per cent of French folks consumed at least one organic product once a month.

Island of growth

And described as a ‘veritable island of growth in a lifeless food market’, a recent report from the French Institut Precepta estimates the organic market will grow by a healthy 8 to 10 per cent each year until 2012.

Socio-political factors combined with environmental concerns – plus the recent government measure that aims for 20 per cent organic food in state catering (schools, state-run offices, hospitals et al) by 2012 – are all feeding into this burgeoning market.

Further propelling the organic march is the diversification of organic supplies that have dovetailed from the bare essentials, such as milk, flour and butter, to more elaborate and sophisticated ranges, like biscuits and ready-prepared foods. In 2008, supermakets, hypermarkets and specialist organic shops witnessed the lion’s share of purchases, pulling in 82 per cent of organic sales.

Consumer choice

Expanding consumer choice for organic foods has contributed to the dynamics of a market that is also enjoying full-on marketing strategies to reach the consumer.

According to their first estimates for 2009, Agence Bio has calculated about 3600 new producers joined up to organic agriculture, a pace of growth not witnessed since 1995, and which brings the overall total of organic producers for the country to 16 400.

While players in the entire organic supply chain in France, including ingredients firms and processors, numbered 25 000 at the end of 2009, a marked 20 per cent leap on the previous year.

In terms of geographical regions that are emerging as organic ‘baskets’, the Languedoc-Roussillon in southern France demonstrated a strident 35 per cent growth in organic land parcels, followed by the l’Ile-de-France – the zone on Paris’ doorstep – with 33 per cent, and Provence Alpes Côte d’Azur marking a dynamic 30 per cent growth.

U.S organic product sales reach $26.6 billion in 2009

From The Organic Trade Association (US)

U.S. sales of organic products continued to grow during 2009 despite the distressed state of the economy, the Organic Trade Association (OTA) revealed today in releasing findings from its 2010 Organic Industry Survey. In fact, organic product sales in 2009 grew by 5.3 percent overall, to reach $26.6 billion. Of that figure, $24.8 billion represented organic food. The remaining $1.8 billion were sales of organic non-foods.

“While total U.S. food sales grew by only 1.6 percent in 2009, organic food sales grew by 5.1 percent. Meanwhile, organic non-food sales grew by 9.1 percent, as opposed to total non-food sales which had a 1 percent negative sales growth rate. These findings are indicative that even in tough times, consumers understand the benefits that organic products offer and will make other cuts before they give up products they value,” said Christine Bushway, OTA’s Executive Director.

Experiencing the most growth, organic fruits and vegetables, which represent 38 percent of total organic food sales, reached nearly $9.5 billion in sales in 2009, up 11.4 percent from 2008 sales. Most notable, organic fruits and vegetables now represent 11.4 percent of all U.S. fruit and vegetable sales.

Since the approval of the final National Organic Program rule published in 2000, sales of organic fruits and vegetables have grown from $2.55 billion, representing approximately 3 percent of all fruit and vegetable sales, to the nearly $9.5 billion level and 11.4 percent penetration level. Meanwhile, during that time, organic food sales have grown from $6.1 billion to $24.8 billion in 2009, jumping from 1.2 percent of all U.S. food sales to 3.7 percent.

The mass market channel had the lion’s share of organic food sales in 2009, with 54 percent of organic sold through mainstream grocers, club stores and retailers. Natural retailers were next, with 38 percent of total organic food sales. Although still representing a small percentage of sales, farmers’ markets, co-ops and CSA (community-supported agriculture) operations gained a lot of interest as consumers increasingly look for locally and regionally produced organic foods.

In the organic non-food sector, organic supplements led, with $634 million in sales, representing 35 percent of total organic non-food sales, Organic supplement sales were 12 percent higher than in 2008. Organic fibre (linen and clothing) totaled $521 million in sales, up 10.4 percent, while personal care products, at $459 million, were up 3.7 percent from 2008 sales.

How right Clive Black is to point out the need for organics to move up a gear. Even better news is that it’s already happening!

The Why I Love Organic campaign kicked off with full page advertisements in the Guardian and Observer Food Monthly earlier this month and there’s lots more at www.whyiloveorganic.co.uk.

Campaign group Organic UK has applied for matched funds from the EU for a more extensive campaign to unpick and simplify the benefits of buying organic food.

And finally the Soil Association will be launching their market report at the Natural & Organic Products Expo in London on April 12th which will tell us exactly how the UK organic market has developed recently. Whilst we are unlikely to hear about a 23% rise in sales year-on-year (that’s France) it’s not going to be all gloom and doom. Come along and hear for yourself!

The parallels here with organic are striking. When Sainsbury’s took the bold decision to disband their organic aisle and migrate the organic products into their parent categories hard-line organic shoppers were dismayed as it meant they had to shop the whole store instead of just one small bit. But organic sales rocketed as more mainstream shoppers discovered organics for the first time – the act of having organics side-by-side with ‘normal’ products on the main aisles made them more approachable. Sensibly Sainsbury’s waited to make this move until product quality and price premium were both acceptable to mainstream consumers. They obviously do not feel that point has arrived yet with FreeFrom as their recent major relaunch/redesign of the brand has been set in a greatly enlarged and enhanced FreeFrom section which they have struggled hard to de-ghetto-ise but which certainly still sits quite separate from the main store.

None the less, this tipping point may rapidly be approaching . Certainly soymilk and soya yoghurts are now considered to be regular products. Whilst the dedicated FreeFrom aisles in Asda and Sainsbury’s have worked well, as the sector matures it may be time for FreeFrom to be merchandised in the parent categories. A potential challenge here is that the products would then be bought by the category buyer, so FreeFrom training for buyers would be essential.

Last year Mintel estimated the size of the UK FreeFrom market as around £213 million per year at retail and forecast that the UK market for FreeFrom would reach £280m by 2012.  Growth is expected to come from “restricters”  rather than allergic or intolerant consumers. Only 30% of UK shoppers currently buy into FreeFrom, 10% because of a food intolerance and 20% because they see it as a healthy option. The way to reach the these restricters is to have FreeFrom merchandised as widely as possible throughout the store and well away from the current FreeFrom ghetto. Only then will retailers be able to capitalise fully on current consumer interest and product quality improvements.

Meanwhile, all of the majors are continuing to push the freefrom concept; Sainsbury’s with its February relaunch/rebrand; Waitrose with an own label brand last year for the first time; Asda and Morrisons with on-going NPD and Tesco by putting both their name and significant funding into industry awards which exclusively cover the FreeFrom sector.

One of the best scenes in the new film Food Inc (www.foodincmovie.com, go see) comes when Gary Hirshberg, CEO of US organic producers Stoneyfield Farm, is pictured walking the aisles at Natural Products Expo, the American equivalent of our own Natural Products Europe trade show. Gary points to each company stand in turn and lists out who has bought them. “Kelloggs, Palmolive…” , the list goes on. Gary himself sold to massive French dairy company Danone and is unapologetic about having done so, pointing out that big businesses enter the  organic sector by acquiring and growing small businesses and this increases the amount of land which is farmed organically and reduces pesticide use.

Talking at The National Health Conference in June 2008 US retailing guru Danny Wells was emphatic that the natural food industry’s role is to nurture small brands, give them space to grow but not to get too possessive when the same brands start appearing in supermarkets at lower prices. Danny’s view was that the forward looking natural food retailers should then concentrate on promoting successor brands not yet widely available through other channels.

The recent takeover of Cadbury’s by Kraft and the implications for Green & Black’s has intensified this discussion. I was taken aback by the vehemence of comments left by consumers on blogs and on Twitter. “Here in the office we’ve only just worked out that the Cadburys-Kraft buyout now also means that Kraft owns Green and Blacks. UGH.” “So you sold out to a multinational that has now been bought by another multinational. Now I know this, I shall not be buying Green & Black’s any more. Why should I give my money to a corporation whose products are mostly unethical? There are plenty of other Fair Trade brands out there.” Not everyone who buys a product worries about the ethics of the company that has produced it. Those consumers who are sufficiently engaged (or enraged) to air their views online may only be a tiny minority – we don’t know.

And the products have not changed – they are still natural, organic, Fairtrade. Every day shoppers come into natural food shops wanting to buy these products. They probably buy other things whilst they are in the shop. If they could not buy them they might go elsewhere. Who are we to deny customers the products they have been buying for years just because we take exception to the ultimate owners of the brand?

Clearly this conundrum is too much for my limited brain so I have put together a panel of four industry experts – two manufacturers, two retailers – to debate the issue at the Natural Products Europe show. The panel is Craig Sams (Green & Black’s), Colin Mace (Booja Booja), Peter Langsam (Planet Organic) and John Grayson (Earth Natural). There will be plenty of time for contributions from the audience so if you have strong views on this issue then please come along to the Pillar Hall in Olympia on Monday 12^th April at 1315 and join in the fun.

To give you a flavour of what we’ll be talking about I asked the panel for their initial thoughts. Peter Langsam, Buyer at Planet Organic is clear. “Let the customers decide. The natural foods and organic market has become challenging enough for independents. We sell food and health and body care lines that meet our strict product standards, whether they are from a tiny local artisan producer or a large multinational corporation.” Retailer John Grayson of Earth Natural veers more towards supporting smaller companies. “Being a small independent retailer is a constant balancing act. In an ideal world we would like to stock products exclusively from fully ethical small companies, but we cannot afford to turn away the significant business that bigger brands bring to us, nor to alienate customers who expect to find them in our shop!”. Craig Sams has a very different viewpoint. “A farmer grows organic wheat which benefits the environment, the climate and biodiversity: so  what if that wheat ends up in a Ritz cracker or in a loaf of artisan sourdough?  Organic farming gives us a sustainable future and helps us avoid unhealthful processing.  If multinationals support a better way of doing things why should we punish them for it?”.

Colin Mace tries to put the issue in perspective: “It is a wonderful achievement to run a successful shop offering organic, wholesome food that helps consumers meet their dietary needs and I admire any wholefood shop owner who aspires to do any more than this. One wholefood shop (or one chocolate company) cannot transform the world to the extent the idealists amongst us would wish, thus each of us choose from amongst our basket of priorities in guiding our decisions. The challenge lies in ensuring our choices are conscious, intentional and coherent.” Debating how we ensure our choices are ‘conscious, intentional and coherent’ will be quite a challenge, but I look forward to having a go – see you on April 12th !

From www.foodnavigator.com

The European Commission has today announced the winner of its contest to design a new logo to appear on all organic food and beverage products in the European Union: a leaf-shaped design from Germany that attracted 63 per cent of the votes.

The Commission turned to design students to come up with the new logo after the initial insignia was withdrawn for resembling too closely the logo of a supermarket chain. The three shortlisted entries were scrutinised closely to ensure there were no infringements, and some 130,000 people voted online for their favourite.

The winning design comprised twelve stars in the shape of a leaf (see below – winning design is on the left). This logo is said to be “a very straightforward sign containing two clear messages: Nature and Europe”. It was drawn up by German student Dusan Milenkovic, who receives €6000 in prize money. The identities and nationalities of the three final contenders have not previously been published, to prevent skewing the voting.

Agriculture and rural development commissioner Mariann Fischer Boel said:“This exercise has raised the profile of organic food and we now have a logo which everyone will be able to identify with. It’s a nice elegant design and I look forward to buying products carrying this logo from July this year.”

The new logo has to be inserted into the organic farming regulation’s annex in the coming weeks. It will then be compulsory on new organic products as of 1 July 2010, but industry has until 1 January 2012 before labels on all existing products need to be changed. National, region, or private labels will be allowed to appear on packaging alongside the common EU logo.

“As tends to be the case with EU regulation, the timescales are getting tight for implementation. Lead times on new products can be significant and if the logo is adopted only by April or May, it doesn’t give long before the July deadline for its introduction for new products to be suitably labelled,” Richard Jacobs, chief executive of UK control body, Organic Farmers & Growers, told FoodNavigator.com in December.

He added that the 18 month grace period for existing label stocks is “fortunate”.