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UK organic market tops £2 billion

Category: News
22 February 2017

The Soil Association’s 2017 Organic Market Report launched 21st February, reveals the UK organic market is now in its fifth year of strong growth and worth £2.09 billion. Total sales of organic increased by 7.1% in 2016 while non-organic sales continued to decline. Organic represents around 1.5% of the total UK food and drink market. More consumers are seeking organic – confirmed by recent research from England Marketing revealing 39% of shoppers buy organic food on a weekly basis. 80% of all consumers said that they have some knowledge about organic food.

Key trends include:

  • Supermarket sales of organic have grown by 6.1%
  • Independent retailers increased sales of organic by 6.3%
  • Sales of organic products through home delivery have grown by 10.5%
  • Sales of organic into the foodservice market have grown by 19.1%
  • The organic beauty and wellbeing sector grew by 13% to be worth £61.2 million
  • Soil Association textile licensees increased organic sales by 30% to £28 million

Clare McDermott, Business Development Director at Soil Association Certification said; “It’s a positive time for organic as it ticks lots of boxes for consumers. Organic is extremely relevant for trends towards eating better food, knowing where your food comes from, avoiding pesticides or antibiotics and ‘free from’ diets. Increasingly, we’re seeing consumers chose organic as a shortcut to a healthy lifestyle and this will continue. Despite uncertainty around Brexit for us all, it brings lots of opportunities too – particularly around export for British organic and more product innovation.”

Supermarkets account for 69% of total sales and shoppers are also ordering more organic products online where there’s a wider range of innovative options. Jeff Hodgson from Tesco said; “The Organic market is in strong growth which is predicted to continue this year. Organic food is becoming more important to more customers as we see new customers entering the market and existing organic shoppers increasing the size of their organic basket. A proportion of this growth is driven by customers seeing organic as a healthier choice.”

Organic food is more available than ever. Many high street chains like McDonalds, Jamie’s Italian, Nando’s and Pret are including organic products on their menus. More supermarket chains are offering wider ranges of organic choices and new independent food stores are growing rapidly. Meanwhile, the cost sector is in strong growth (+19.1%) with more schools, hospitals and workplaces serving organic food. Demand has been strongly driven by the Soil Association Food for Life Catering Mark with £15 million now spent on organic food - an increase of 66%.

UK sales are catching up with market growth rates around the world. The global organic food market is valued at $81billion and the UK represents around 4% of global sales. In many countries, British organic is seen as the best that you can possibly buy - particularly in the Far East, US and Europe. Overall, nearly half (49%) of Soil Association Certification licensees are exporting products with an estimated value of exports at £250m.

Organic farming in the UK remains buoyant and there are new opportunities for farmers. Soil Association Certification saw an increase in applications for certification from processors and producers – with the number of farmers applying for Soil Association Certification up 13.5%.

Sponsor Triodos Bank has been an active supporter of the organic sector for more than 35 years. It works with organic businesses from field to fork, from farmers and growers to processors and retailers. Triodos lends to more than 120 organic farmers in the UK.

Simon Crichton, Food, Farming and Trade Team Manager at Triodos Bank said; “We’ve helped farmers to finance 1,185 hectares of additional organic land in 2016, a threefold increase on last year. We’ve seen dairy doing well as are those who have direct relationships with consumers, whose confidence in organic has increased. There are a number of opportunities for organic farmers at the moment - but those looking to convert, need to have a solid market for their product. Clearly, having certainty around support payments would be of great assistance but agriculture has always had to take a long term view and organic methods are well placed for both environmental and financial sustainability.”

2017 also sees the launch of the Soil Association’s first market report on the organic beauty and wellbeing market, reflecting the continued growth in organic and natural beauty (+13% to £61.2 million). Soil Association certified beauty brands are also on the up, and have increased by 22% since 2016. Future predictions show there will be greater crossover between people who buy organic food and non-food items. More consumers will enter the organic market through buying health and wellbeing products. And equally, established organic food shoppers wil lbuy more organic health and wellbeing items.

Keywords: organic market report

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