Transcript Organic_Response_SusannePadel_Powerpoint

In time of recession, can organic
food be a reality for the
majority?
Susanne Padel
Institute of Biological
Environmental and Rural
Sciences
Outline
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10 year trends of the organic sector
Who is the organic consumer?
Some more recent trends of the organic
market
Can organic food be a relality?
www.fibl.org
Organic agricultural land by region (2007)
Global organic market 19992007
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97% of consumer demand
in North America (43%) and
Europe (54%).
Asia, Latin America and
Australasia are important
producers and exporters
Supply problems for fruits,
vegetables, beverages,
cereals, grains, seeds herbs
and spices
Growth at lower rate is
expected to continue
UK organic certified land area since
1997
thousand ha
800
700
600
NI
Scotland
Wales
England
500
400
300
200
100
0
'97 '98 '99 '00 '01 '02 '04 '05 '06 '07
UK Organic sector development
since 1997
2000
6000
1800
Land area (thousand ha)
1600
Retail value (£ million)
5000
1400
No of holdings
4000
1200
1000
3000
800
2000
600
400
1000
200
0
0
97
98
99
'00
'01
'02
'03
'04
'05
'06
'07
Organic market and sales channels
1800
1600
Farmers markets
1400
1200
Box & mail
(producer)
Box & mail (retail)
1000
800
600
Independent retail
400
200
Supermarkets
0
2004
2005
Source: KeyNote (2008)
2006
2007
Who are the organic
consumers?
We used to think
 Higher social class and education
• 2/3 are A,B,C1 (compared with 1/2 in population)
Fewer children and older
 Mainly living in London, South East, South
West and Wales
But appeal has widened
 Manual and casual workers, students and
pensioners now account for 50% of
consumers
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Why people buy organic?
(% consider very important)
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Quality and taste (31)
No GM ingredients (26)
High animal welfare standards (25)
Avoiding food with pesticides (25)
Avoiding artificial colours & additives (23)
Wanting to know where food come from (22)
Fair prices and wages for farmers &workers (20)
Farming methods encouraging wildlife (20)
Impact of production and transport on greenhouse gases
and climate change (14)
(Source: Market Tools/ZOmnibus for Soil Association, January 2009)
Two broad segments of consumers
Regular/committed (15%)
 Claim to buy more then 40%
of food as organic
 Well educated; health aware
 Range of income levels
 Believe in organic product
quality
 Seek other attributes
•
•
•
Environment
Animal welfare
Fair trade and local
Account for > 80% of spend
Occasional (30%) and rarely
(48%)
 Claim to buy between 35% and
10% as organic
 More price & convenience
sensitive
 More sceptical about some claims
 Less knowledge
Account for < 20% of spend
Knowledge and availability remains
a problem
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¼ of those that don’t buy regularly would
like to know more.
Organic products are bought unknowingly
People believe to buy organic if in fact
they are not (e.g. on farmers markets,
natural)
Limited knowledge legal status of ‘organic’
and annual inspection/certification
requirements
More recent trends
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Market has grown by 1.7% between
2007 and 2008 (£2.1 billion)
Nine out 10 households buy organic food
• increases in the last 5 years
Broader appeal
Average spending has fallen
• from £51.30 to £50.55
Dairy products (29.5% of sales)
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Above average growth (07-08)
• +10% milk
• +11.5 cheese
• +1.5 yoghurts
Now the largest sector
Commitment from key players
to communication campaign
Comparatively low premiums
Fruit & veg
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(26.2 % of sales)
Available in supermarkets but
also box schemes, local shops,
farmers markets
Reductions in consumer spend
during 2008
Heavy reliance on imports
• Despite steady increase in
horticultural land area in the UK
Meat
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(<10%)
Above average growth rates
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•
+13% for red meat and
+17% for poultry
Downturn in supermarket sales in late 2008
• Lower value cuts and products (beef burgers)
• Cheaper outlets
• Affected by grain price increases
• Animal welfare important ‘Chicken out’ campaign
Wildlife
Difficulties balancing
Fair price
Taste
Quality
Health
Animal
welfare
Climate
change
Local
food
Labelling jungle?
Expected responses to the recession...
Different types of shopping
Fun
Source :Bord Bia Research – Feeling the Pinch
Shopping Habits will Change…
Fun
•
Shoppers will first try to reduce cost of Vital essentials
–
Promotions, Own brand, Discounters
•
And will then cut out Fun expenditure
•
Reluctant to cut back on Lifestyle or Sanity purchases
– Some affordable luxuries may actually increase!
Source :Bord Bia Research – Feeling the Pinch
% main shoppers (all mentions)
Specific food purchases –environmental and
ethical
65%
60%
55%
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
I have
specifically
bought…
25 27
15 15 13 15
18
18
14
...food that has
been produced
locally in the area I
live
2003
23 25
24
19
12 13 12
18
12 11
11 9 11
9
...organic food
2004
18
2005
...foods that support
Fairtrade
2006
2007
2008
8
11 11
14
...foods with high
animal welfare
standards
2009
Source: IGD Consumer Unit, 2009
MyReports
© www.igd.com/analysis
Summary and conclusions
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Consumers have reviewed spending on
premium organic foods
People continue to seek ways to make a
difference
Organic market largely driven by
committed regulars
Can organic food be a reality for the
majority?
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Availability remains a problem
Expensive image, not always reality
• Checking prices
• Premiums vary between outlets
More home cooking and less
convenience food and changes in diet
We need clear messages about the
wider benefits of organic food