Soil Association Organic Market Report 2011

04 April 2011

Sales of organic products fell 5.9% to £1.73 billion in 2010 with the rate of decline
slowing significantly throughout the year, according to the Organic Market
Report published today by the Soil Association. [1]

The outlook for 2011 is cautiously optimistic. Despite fragile consumer confidence
in the wider economy, the report shows positive signs of resilience and
recovery for the organic sector overall. The biggest success stories were sales
of organic beef (up 18%), organic baby food (up 10.3%) and organic textiles (up
7.8%).

The definitive guide to organic trade in the UK, the Organic Market Report shows
that shoppers spend more than £33 million a week on all things organic, and
that 86% of households now buy organic products. Dairy products and fresh fruit
and vegetables are the most popular categories, accounting for 30.5% and 23.2%
of sales respectively.

Although sales through multiple retailers fell by 7.7%, to £1.25 billion, Waitrose and
Marks & Spencer anticipate modest growth for 2011, while Tesco,
Sainsbury’s, Morrisons and the Co-operative predict level sales year on year.
Multiple retail accounted for 72.3% of the organic market in 2010.

Organically managed land decreased by 0.6% to 738,709 hectares and now represents 4.2% of
UK farmland, equivalent to more than the combined area of Somerset and
Wiltshire. The number of UK organic producers fell by 4.2% to 7,567 in 2010,
from a record high of 7,896 the previous year.

Further key findings in the report include:

• On average consumers bought organic products 15 times in 2010, compared to 16
times the previous year.

• Sales of a wide range of products started growing again, including butter, yoghurt,
beer and cider, herbs and spices, pulses and packet soups.

• Sales through independent retailers and catering accounted for the remaining
27.7% of the market, falling by 0.75% to £480 million. Box scheme and
mail-order sales grew by 1% in 2010 to £156 million – an encouraging result in
tough trading conditions.

• Production of organic vegetables and organic milk both fell in 2010 but
cereal production is on the increase, buoyed by high grain prices and strong
demand for milling wheat.

• Poultry and egg production are set to fall in 2011 because of a combination
of faltering consumer demand, high feed prices and the cost implications of
impending changes to the EU organic regulations.

• Organic products continue to attract shoppers from across the social
spectrum. Those in the more disadvantaged socio-economic groups account for a
third of spending overall.

Roger Mortlock, Soil Association deputy director, said:

“There is powerful evidence that consumers who care
about the diverse benefits of organic will stay loyal, even during these tough
economic times.Given the current uncertainties in the UK and global economy, it
would be rash to make any predictions for the future organic market. But the
instability caused by climate change, population growth and resource depletion
mean that business as usual in food and farming is not an option. As Caroline
Spelman, Secretary of State at Defra, remarked recently: ‘Organic farmers are
the pioneers of sustainable farming and have valuable lessons to pass on to the
rest of the sector.” [2]

Ends

Annual organic sales figures since 1993:

1993 = 105 million

1994 = 121 million (+15)

1995 = 140 million (+15)

1996 = 200 million (+42%)

1997 = 260 million (+30)

1998 = 390 million (+50%)

1999 = 605 million (+55%)

2000 = 802 million (+32%)

2001 = 920 million (+14)

2002 = £1 billion (+8%)

2003 = £1.1 billion (+10%)

2004 = £1.2 billion (+11%)

2005 = £1.6 billion (+30%)

2006 = £1.9 billion (+22%)

2007 = £2.078 billion (+7.3%)

2008 = £2.113 billion (+1.7%)

2009 = £1.84 billion (-12.9%)

2010 = £1.73 billion (-5.9%)

Olivier De
Schutter, the UN Special Rapporteur on the Right to Food, states:

“…current attempts to boost food production
with chemical fertilizers and the development of heavily mechanized large-scale
plantations are putting agriculture on the wrong track. Agriculture is already
directly responsible for 14 percent of man-made greenhouse gas emissions – and
up to one third if we include the carbon dioxide produced by deforestation for
the expansion of cultivation or pastures. And this figure will rise in the next
few years. Keeping blindly on the track of industrial agriculture is clearly
unsustainable and also detrimental to the right to food of millions of
small-holder farmers and other vulnerable communities.”