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The UK’s organic market is now worth a record of just over £3bn after sales grew 5.2% in 2021, the Soil Association’s Organic Market Report 2022 revealed. The sector “significantly” outperformed non-organic sales, as the group found that Brits were spending almost £60m on organic products each week.
Clare McDermott, Soil Association Certification’s business development director, said the organic industry had showcased its resilience. “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,” she said.
What’s behind the organic sector’s growth?
Over 2021, the report reveals particularly strong performance for online and box schemes, which together delivered growth of 13%, worth £558m. “The wider organic choice available online is bringing new shoppers to the category,” Clare explained. “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.”
Online purchases of organic food and drink have grown a massive 54% since 2019. The report revealed that customers who bought organic online and used box schemes following the pandemic have continued these new shopping habits.
Hannah Shipton, managing director of the organic delivery service Abel & Cole, said: “2021 proved to be a strong year for Abel & Cole, with customers sticking with us, and joining, as lockdown eased, reflecting the exceptional growth of the organic market. With increasing consumer awareness of the need to shop sustainably, we expect to see this interest grow, and we plan to widen the range of organic products to continue inspiring positive shopping choices.”
The organic opportunity is great for independent retailers too, as they recorded 9% growth in sales in 2021, topping supermarkets (2.4%) and foodservice (3.3%). However, the Soil Association admits it’s a mixed picture, as some city-centre-based indie retailers were negatively affected by more people working from home, while local shops benefited from the change.
In supermarkets, the Soil Association discovered that the top four organic categories were growing ahead of their non-organic equivalents – these included: dairy, produce, ambient grocery and meat, fish and poultry.
Other ‘hero categories’ were tea and coffee, with nearly £1 in ever £10 in supermarkets spent on organic, and beer, wine and spirit sales, which were up 16.9% in 2021.
Indie retailers should also consider the value in stocking non-food organic products, as sales of certified organic and natural beauty products grew 15% in 2021, while organic textiles rose a whopping 39%.
It comes as the trends of health and sustainability convert more customers to climate and nature-friendly options. “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,” Clare said.
Challenges on the horizon
Despite the organic industry’s phenomenal growth in recent years, the latest figures from Defra reveal that the total area of land farmed organically remained the same from 2019 to 2020, despite a 12% rise in the area of land being converted to organic.
“The challenge for UK farmers and supply chains now is to step up to meet the demand presented by the strong growth in the organic market,” the Soil Association report said. “Land in conversion is not increasing sufficiently fast enough and there is a need to develop robust UK supply chains. At present more ingredients and products are being imported to support increased demand which is not what anyone wants. There needs to be robust supply chains – and our research shows consumers want to buy British.”