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UK organic market tops £3bn after sales grow 5.2%

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The UK organic market has passed the £3 billion mark for the first time, after delivering sales growth of 5.2% in 2021.

The figures are contained in the 2022 Soil Association Organic Market Report, which is published today. 

Welcoming the report, Soil Association business development director, Clare McDermott, said 2021 was the “tenth year of sustainable growth” from the UK organic sector. 

While representing a slowing of the exceptional growth seen in 2020, organic’s continuing strong performance in 2021 helped move its share of total food sales to 1.8% (up from 1.6% in 2020). 

Home delivery leads retail growth 
In terms of retail channels, home delivery – including box schemes and online – was the standout performer, growing at 13% (to be worth £558 million). Here, box schemes such as Riverford and Abel & Cole, have seen successful in nudging customers towards more frequent purchasing and a larger number of items. Meanwhile, Amazon, listing over 8,500 Soil Association certified products, is now the UK’s largest retailer of organic (searching ‘organic food on amazon.co.uk produces over 30,000 results).

Independent retailers, while having a “mixed year”, grew at a very respectable 9% to be worth £447 million, partly thanks to the expansion of specialist chains such as Planet Organic and Better Food. Independents also reported an increase in younger customers coming back into store looking for provenance and traceability. 

Supermarket growth was slower at 2.4%, but that looks better when compared to the negative growth (0.2%) seen in the same period for conventional food. Growth in organic food service was however fairly sluggish at 3.3%.

Looking at share of organic sales by channel, supermarkets captured 64.5% of the market (down from 66.3% in 2020), home delivery took 18.3%, independent retailers 14.6% and food service 2.6%.

Baby food boom 
Dairy, produce and ambient grocery took the top three positions in the ranking of organic category by value at 25.5%, 22.2% and 16% respectively. But the strongest growth in 2021 came from beers, wines and spirits (16.9%) and baby food and drink (16.1%).

Non-food categories also showed continuing strong growth in 2021. Organic beauty and wellbeing was up 15% and is now worth £138 million, while organic textiles piled on 39% higher sales in 2021. 

Saying, but not always doing
Research by the Soil Association shows that 71% of consumers have become more concerned about the environment since the pandemic. 86% want food produced in more natural ways, and 56% of shoppers are concerned about the impact of food packaging on the environment.

‘No pesticides’ tops a ranking of shoppers’ reasons for choosing organic, followed by ‘better for the environment’, ‘perceived better quality’, ‘taste is better’, ‘better for animal welfare’ and ‘perceived health benefits’. 

But the research throws up challenges for the organic sector. Many consumers who say the want to make the most sustainable food choice don’t necessarily regard organic as the best way to do it. The research also identifies a significant ‘say-do’ gap (where shoppers talk abut the importance of sustainable choices but don’t always make them). Here, organic businesses need to find ways to “interrupt shoppers’ auto pilot to make their products a habitual choice”, says the Soil Association. 

While there was a 12% increase in the area of land being converted to organic, the total area of land farmed organically remained “largely flat” at 0.8%.

Future prospects 
The Soil Association says the organic market is more resilient than ever and is expected to continue to grow. With health and sustainability identified as long-term trends, and a bigger focus on healthy and sustainable diets to help address the climate crisis, there are big opportunities for organic businesses who respond to changes with agility. 

Despite major challenges for exporters in the post-Brexit trading environment, new growth markets are emerging (Asia-Pacific, for example, is proving to be a particularly fertile territory) as the global Britain agenda is prioritised. Around 12% of Soil Association Certification clients are active exporters. 

Organic supply chain connectivity is identified as both a challenge – “the disconnect between finished product and retail activity and farming activity” – and an opportunity. An “over dependence on imports” is also identified as a weakness, and something that could become a more pronounced problem as the EU pushes ahead with its 25%-organic-by-2030 target for organic farmland.  

“Despite challenges across all aspects of production, supply and the market, organic businesses have shown phenomenal resilience and responded to (continually increasing) shopper demand for products that support both health and the environment”

Clare McDermott said: “Despite challenges across all aspects of production, supply and the market, organic businesses have shown phenomenal resilience and responded to (continually increasing) shopper demand for products that support both health and the environment. Shoppers are increasingly looking for products that reflect their values and organic is meeting that need.  

“The wider organic choice available online is bringing new shoppers to the category. Box scheme sales continue to be strong as shoppers look for provenance and traceability in their choices and over a fifth of organic food and drink sold through supermarkets is now online**.   

“With shoppers in the UK now spending £60 million a week on organic, there is a huge opportunity for organic businesses to innovate both in channel and product and continue growing the market.” 

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