Retailers Key to Driving Organic Market Growth

The Soil Association's market report for 2014 shows a 4% rise in sales of organic products, a welcome return to growth for organic devotees.

The performance by type of product has been well documented. Sales of eggs were up by 16%, yogurts by 14%,chicken by 8%, and milk by 3%.Veg sales were down 2% as were sales of red meat and sausages, which dropped by 6%.

The strongest sectors for organic produce are dairy, which accounts for 28% of all spending on organic foods, and baby foods where over half of all sales are organic.

Attention has been drawn to the role of brands in driving growth. Yeo Valley sales are quoted as being up by 13%, and there is talk of good performances from Rachel’s yogurts, and Green and Black chocolate.

Less well documented is the pivotal part that retailers play in the fortunes of organics.

Milk growth is being powered by sales in Aldi and Lidl, which jumped by 410% and 166% respectively. And sales of fruit and vegetables were propped up by these two retailers both of whom now stock organic variants. Aldi claims that their organic offer saves shoppers 30% versus prices in bigger supermarkets. Ocado, the online grocery retailer saw sales grow by 14%, broadly in line with their overall sales trends. Riverford Organics, the online box delivery service posted an 8% growth in the year to May 2014, taking their sales to £44.4 million, and Abel and Cole, also in the box business,  reported sales of £65 million, which according to owners Wm. Jackson represented “strong growth”.

Conversely, mainstream supermarket performance was patchy, with the best results coming from Waitrose, up 3.5%

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What this all may suggest is that the organic label on its own is not enough to guarantee a secure future. Sales success seems to be down to a combination of operating in the right categories, choosing a strong and committed retail partner, and ideally, building a powerful brand where being organic is just one aspect of what makes the consumer want to pick it off the shelf.