Organic sales set to slip, says Mintel

By Caroline Scott-Thomas

- Last updated on GMT

Related tags Organic food Mintel

A new survey from Mintel shows that seeking out organic food is slipping down consumers’ ethical agenda as the credit crunch begins to bite.

According to the survey, nearly half of the UK’s organic shoppers – 48 per cent – will consider reducing or giving up buying organic food altogether in the year ahead.

As consumers tighten their purse-strings, other ethical choices such as animal welfare and fair trade are also putting pressure on the organic market. Buying locally-sourced food has become the most important ethical consideration for grocery shoppers, with 33 per cent of survey respondents saying that they seek out local produce.

This compares to 21 per cent who look for organic food, while 26 per cent said that fair trade was their top priority.

The UK organic market has grown by an average of 16 per cent every year for the past five years and Mintel’s latest prediction says: “In the coming years sales are forecast to dramatically slow and growth is unlikely to hit previous levels any time soon.” ​However, although growth in the sector looks set to slow down, there is still growth.

Mintel’s director of retail and financial research Richard Perks told “It is not a fall in sales but it looks increasingly likely. I think that organics are going to be seen as a luxury and there is already evidence that people are trading down to lower priced items.”

The organic message

Nevertheless, this slowdown could particularly compound problems for manufacturers of finished products.

Perks said: There has also been a move in recent years away from heavily processed, highly artificial foods towards better quality and fresher produce.”

He also said that good communication of the organic message is vital.

Now, more than ever, retailers and suppliers need to clearly communicate the ethical, environmental and personal benefits of buying organic.”

Mintel is predicting that although many organic categories will have difficulties in the months ahead, “organic stalwarts are not expected to give up on organics overnight,” meaning that premium quality organic products and well-established brands will withstand the market turmoil.

Perks said: “There is a part of the market which is going to hold up because it is bought for ethical reasons. Some people buy organic because they think it is good for the planet, but another, I think larger part, buys organic because they perceive it to be better for them.”

Mintel values the UK’s organic food and beverage industry at £1.6bn, while locally sourced food is worth almost three times that, at £4.8bn.

The consumer research was based on a survey of 2001 adults aged over 16.

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