Organic Food and Drink - UK - October 2013
“It is important for organic brands to communicate to shoppers in a more effective way the tangible, concrete benefits their products offer them. Given the vast amount of product information that is already competing for shoppers’ attention, clear, dynamic labels that can be understood at a glance are needed.”
– Emma Clifford, Senior Food Analyst
Some questions answered in this report include:
- What impact has the horsemeat scandal had on the organic food market?
- What barriers does the market face in capitalising on the predicted growth in consumer spending?
- How can brands more effectively communicate the benefits of the organic label?
- Will a change in EU organic regulation benefit the market?
The post-recessional landscape in the UK remains a challenging one for the organic label. While people are adopting a more positive outlook and consumer spending is tentatively picking up, the organic market is undoubtedly marred by perceptions of organic food being overpriced and the related scepticism over the palpable benefits it offers consumers. Therefore, overturning negative attitudes and justifying price points will be key in order for the market to reap the rewards from shoppers starting to loosen their purse strings as the economy regains momentum.
Nonetheless, the first green shoots of recovery are evident. After four years of successive decline – with the value of the market sliding by 27% between 2008 and 2012 – retail sales of organic food are forecast to edge up by almost 1% in 2013. This is expected to be driven by growth in both the dairy and baby food sectors and helped by sales of organic fruit and vegetables stabilising.
The extent of the impact the horsemeat scandal, and the spotlight it put on sourcing integrity, had on organic sales is difficult to gauge in real terms. However, a quarter of organic shoppers agreed that the scare made organic produce more appealing to them, indicating a tangible boost in interest.
Organic food sales are forecast to increase by a marginal 2% over the 2008-13 period, according to Mintel’s estimates. This highlights that the road ahead is likely to remain a challenging one for the market in the mid-term at least. However, the younger generation’s affinity for the organic proposition and their expansive repertoires inspire optimism for the long-term future of the market.
This report covers the UK retail market for food and non-alcoholic drink produced according to organic principles and standards. The main sectors covered include fruit and vegetables, meat and poultry, dairy products, fish and seafood, eggs, prepared foods and groceries, cereal products, baby and toddler foods and infant formula. It includes organic foods that are fresh, frozen or ambient.
Non-alcoholic organic drinks are analysed as part of the consumer research, but are excluded from the market size. Alcoholic drinks and sales of organic food through foodservice and catering outlets are excluded from the report.
It should be noted that market size data presented in this report represent Mintel’s best estimates of the organics market and its constituent sub-sectors.
Organic farming involves the development of management practices that aim to avoid the use of agrochemical inputs and to minimise damage to the environment and wildlife.
To be certified organic, products must derive from sustainable management practices that rely on crop rotation, biological pest control and use of natural fertilisers. Management practices avoid the use of artificial herbicides, pesticides and fertilisers, genetic modification and, for livestock production, the routine use of antibiotics, growth promoters and other drugs. For organic processed products, not less than 95% of the ingredients must be certified as organic. Products made with between 5% and 30% of non-organic ingredients can highlight the organic content – legally the label must state the percentage of total organic agricultural ingredients.
Organic production standards were first introduced in the early 1970s. The term ‘organic’ became strictly defined in European law in 1993 with the introduction of EC Council Regulation 2092/91, which ensured the strict regulation of organic food production. This EC Regulation sets minimum standards for organic production, which conform to those laid down by the International Federation of Organic Agricultural Movements (IFOAM). The Regulation also sets out the practices and inputs that may be used in organic production, covers inspection systems and also applies to processing, processing aids and ingredients in organic foods. Only organic foods originating from growers, processors and importers that are registered with an approved body and subject to regular inspection can be sold as organic.
To ensure that organic standards are adhered to, in whichever country the food is produced, the symbol or EU code number of a certification body must be clearly visible on the label of all organic foods. The new EU organic leaf logo became compulsory from 1 July 2012 on all prepacked organic food products that meet the necessary standards. Standards cover registration, certification, the environment and conservation, production, permitted and non-permitted ingredients, processing, packaging and distribution.
Organic standards are continually updated and are enforced by the certification bodies. Producers, manufacturers and processors of organic food pay an annual fee for registration with a certification body. All must keep detailed records to ensure traceability from farm to end product. Certification bodies are responsible for inspecting land and production processes, at least on an annual basis, to ensure that production follows the standards and principles laid down.
Imported products are subject to the same checks and guarantees as those produced in the UK. Products imported to the UK from other EU countries are subject to EU standards, which apply to all producers, processors and importers in the EU, which must be registered in their member state. For products sourced outside the EU, the exporting countries must demonstrate to the European Commission that their organic production systems satisfy those of the EU.
What you get
This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.
Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.
Mintel's proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.
Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.
Market reports provide appendices of data to support the research and insight produced. Our tables of data are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.
* This is a sample representation of the report layout and does not reflect the research included in this report.
Why buy from us?
Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.
Buy now and you'll have instant access to the information you need to make the right decisions.
Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.
A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.