We hear from Soil Association Certification’s Development Manager, Tessa Hart, on the sales landscape for organic food and the supply chain opportunities for wholesalers.
Soil Association Certification is the UK’s largest and most experienced organic certifier, offering a range of organic and sustainable certification schemes across food, farming, catering, health and wellbeing, textiles and forestry.
The headline figures from the Soil Association Certification’s Organic Market Report make happy reading for anyone involved in organic. The UK market has entered its 9th consecutive year of growth, with sales increasing by 4.6% in 2019, ahead of a flat overall market for food and drink sales. Soil Association Certification licensees’ sales have exceeded the steady growth of the organic market, with an 8% rise in sales.
One of the more reassuring factors is that growth has continued across the board. Supermarket sales continue to represent the bulk of organic sales in the UK and sales in the big multiples grew again in 2019 by around 2.5%*. High penetration categories that are helping to drive this growth include Dairy, Produce and Packaged Grocery and Wine.
Whilst businesses continue to face many challenges from the rapidly changing situation, the organic market still looks set to surpass the £2.5bn sales mark by the end of the year, with organic sales rising significantly in March and April and continuing to outperform non-organic.
Impact of Covid-19
We cannot ignore that shopping habits have changed quite dramatically over recent months with an absence of food service causing an increase in home cooking. Alongside the obvious demand across retail outlets, organic businesses have seen an unprecedented increase in online sales direct to the customer and through organic veg box schemes, with wholesalers being a key part of the supply chain throughout the UK.
In addition to the loyal customer base for organic, which has been steadily growing with increased awareness of environmental impact and health choices, we are seeing that online is attracting a new group of shoppers who are looking for a wider range of organic availability online. Home delivery and box schemes sales increased by 11.2% in 2019; a trend which is set to continue this year with some wholesalers now also looking to sell to customers directly.
This increased demand for good range availability online is reliant upon robust certified organic supply chains and an outlet for brands to be able to get their product onto ‘virtual shelves’.
Thriving in the independents
Organic continues to expand its hold within independent retailers, with more range and more availability through health stores, specialist food shops, farmgate and farm shops, showing a 6.5% increase in this channel. A huge 82% of independent shops we surveyed were focusing on zero waste in their stores and in the current environment people are shopping locally. There is strong demand for organic through these retailers, providing opportunities for wholesalers within the organi supply chain.
Concerns about our impact on the planet dominated 2019 and prompted changing consumer habits. With the current spotlight on the fragility of supply chains and food integrity, organic provides a sustainable, certified and trusted method of production, and is ideally placed to meet the continued changing needs of shoppers.
With the organic market consistently stronger year on year, certification provides your business with the ability to offer a range of organic products to your customers.
For businesses interested in certification, Soil Association Certification offers an experienced and expert technical team to support you throughout the application process. Our business support package includes trade and supply chain insight and opportunities, as well as a range of events and marketing support to communicate the benefits of organic effectively.
* Nielsen Scantrack Total Coverage Food and Drink (supermarkets and convenience stores) 52 weeks ending 28th December 2019