labels: Healthcare, World economy
Organic foods take a hit as recession eats into sales news
07 April 2009

After 15 years of steadily rising sales on rising awareness of green concerns, the organic foods industry seems to have got the thumbs down from recession-hit consumers in the UK. Eggs, poultry and vegetable sales plunged in the last few months of 2008 according to the Soil Association, the leading certification body for organic food.

However, the overall sales of organic food products increased 1.7 per cent to £2.1 billion in 2008. The increase, masks the strong growth during the first half and a sharp decline in the second half in the wake of the economic downturn on weak consumer support.

The Soil Association claims that sales of organic products fell in volume terms rather than value terms for the first time.

Lord Melchett, the association's policy director said that the industry faced a major problem in the last quarter of 2008 with poultry being particularly hard hit and a panic response from the public and retailers driving a sharp decline in eggs, chicken and vegetables sales.

Sales of organic chickens fell by 25 per cent in the final three months. Earlier a high profile welfare campaign by celebrity chef Jamie Oliver had boosted sales at the start of the year. Fears of hard times in the downturn kept people from paying the premium for their meat especially with the uncertainty.

Organic chicken at Tesco, for example is priced at £12 a pound. A free range bird, on the other hand costs £9 a lb and a standard chicken £6.40.

Another problem is caused by retailers withdrawing organic products from shelves to keep in step with the demand for more budget lines that are doing well in the economic conditions.

Though Lord Melchett insists a stabilisation in sales in recent months and predicts a 'modest growth' for the industry in 2009, organic experts do not see a recovery that soon. They fear that the poor year coupled with two consecutive wet summers may drive farmers to ababdon the organic movement.

Meanwhile there is more gloom for those who had seen the organic boom heralding a new model of a sustainable, localised food economy: super markets have taken in an even larger chunk of share of organic sales (now over 70 per cent) even as the amount of land under cultivation of organic fruit, flowers and herbs has shrunk more than 20 per cent since 2006. Around 90 per cent of organic fruit is now being imported into Great Britain.

Though the outlook seems to be bleak, Melchett is optimistic of a recovery once the economy starts looking up. He points to the underlying resilience of the organic market as committed consumers will not go anywhere else and stay organic.

This may indeed be a good reason for optimism as US organic sales have held well and even increased. Also global sales of organic food and drink had peaked at £23bn by the end of 2007, up 7 per cent and clearly UK sales had to flatten some time.


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Organic foods take a hit as recession eats into sales