The UK organic market is now worth GBP2.2 billion, growing 6 percent in 2017. It is following six years of steady growth, with organic accounting for 1.5 percent of the total UK food and drink market. Nielsen data showed an upward trend for UK supermarkets with Marks & Spencer and Iceland the strongest outside the discounters for the 12 weeks to January 27, 2018.
The Soil Association’s 2018 Organic Market Report – launched 7 February – revealed that 2017 sales of organic in independent retail grew by 9.7 percent, and for home delivery by 9.5 percent, with almost 30 percent of all organic sales now taking place online or on the high street.
"Supermarket sales of organic have also continued to increase, rising by 4.2 percent this year, while non-organic sales increased by just over 2 percent," the Soil Association said.
Clare McDermott, business development director, Soil Association Certification, said: "One of the biggest stories for organic over the past couple of years has been the rise of online shopping, and it’s a trend that shows no sign of slowing down. Driven by convenience, a broader range of choice, and by younger generations entering the market, it’s no surprise online sales are outperforming the traditional supermarket on organic.
"Online retail is also able to adapt and innovate at a faster pace than in-store, bringing new and trend-led products to market, and people an excellent that they can often find a better range online.
“Home delivery already accounts for almost 13 percent of the organic market and the expectation is that this could reach as much as 25 percent in the near future. It’s a good fit for organic too: the local, fresh, farm-to-door approach of box schemes is in line with the ethos of organic and appeals to consumers who value food provenance.”
Key growth areas highlighted in the report included:
* Produce, up 6.5 percent, had the highest value growth, equating to over GBP20m in sales
* Chilled foods had impressive growth at 21 percent, now accounting for 3.4 percent of the total UK organic market
* Dairy increased sales by around 3 percent, and still have the highest share of the organic food and drink market at nearly 29 percent
* The popularity of organic wine continues to grow, with sales of beers/wines/spirits increasing by over 8 percent.
Rose Price, head buyer at Ocado, said: “We know how important organic is to our customers, and that’s why we’ve spent the last year expanding our ranges of organic to meet rising demand. As a result of a recent Meet the Buyer event, we are hoping to launch over 100 new products during 2018. We see no end to the strong growth in organic, as the market has been buoyed by a new generation of shoppers looking to spend their earnings on food and drink that is not only better for them, but also for animal welfare and the environment.”
The Soil Association also released its annual Organic Beauty & Wellbeing Market Report, which revealed a 24 percent growth in certified organic beauty & wellbeing, making it the seventh year of consecutive growth for the sector.
Nielsen retail data for UK supermarkets found that shoppers spent 4.2 percent more on groceries during the four weeks ending 27 January versus the same period a year ago, as inflation continued. New Year's Eve benefited alcohol (spend up 10%) and soft drinks (8%) mainly, following an extremely good Christmas.
Excluding discounters, sales rose 2.7 percent, while volumes only rose 0.1 percent.
"Furthermore, half of those who have changed their shopping behavior are switching to cheaper grocery brands," Nielsen said.
Nielsen figures for the twelve weeks ending 27 January show Tesco had the most improved year-on-year performance among the big four supermarkets (sales up 3.4%), followed by Asda (2.5%). Marks & Spencer and Iceland (both up 3.7%) had the best growth figures outside of the discounters Aldi (up 12.6%) and Lidl (up 17.2%).