Organic Food, Organic Food Consultant, Organic Food Manufacturing, Fairtrade Food and Drink

Summary – US Organic Market Update

simon — Tue, 27 Mar 2012 16:41:21 +0000

My thanks to Anthony Rickards @ Planet Organic for forwarding this presentation, which was delivered at this year’s Expo West trade show by Bob Anderson and Jessica Poingt of the Organic Trade Association.

Key statistics

US organic market worth around $32 Billion
Organic food sales grew +11% over the preceding 13 weeks (non-organic food sales grew by 0.6% in the same period)
Supermarkets account for 54% of sales, natural and speciality stores 39% and exports 7% (this could increase as a result of the mutual certification recognition deal announced at Biofach)
Private label penetration varies from 40% (meat and fish) to around 15% (snacks)
High growth categories are seen as fresh fruit and vegetables and household products: meat, poultry and seafood are rated medium whilst packaged and prepared foods are seen as low growth.
72% of parents recognise the USDA organic seal (up from 65% in 2009)
Organic buyers are twice as likely to be graduates as non-buyers
40% of families report they are buying more organic products than they were a year ago

Opportunity Knocks! How a Downfall in Organic Sales Is Good For Independent Retailers

simon — Tue, 06 Mar 2012 12:25:04 +0000

In March the Soil Association released their Organic Market Report 2012 . The headline figure (seized on by the media) was that sales of organic products in the UK fell by 3.7% in 2011 to £1.67 billion. However equally interesting was that sales through box schemes, home delivery and mail order increased by 7.2% to £167m. So it appears as though committed organic shoppers looked increasingly to specialist retailers as the supermarkets reduced choice and availability of organic products The main cause of the markets overall decline was a 5% drop in multiple retail sales driven by a challenging year on the high street, continuing cuts in ranges and shelf-space and a lack of investment in own-label organic ranges. Supermarket own-label sales are down 9.5% but organic brands only dropped by 2.9%. Top reasons for consumers buying organic are “fewer chemicals” (62%), “natural and unprocessed” (57%) and “healthier for me and my family “(52%). Frustratingly the UK remains the only organic market in decline: sales are up elsewhere with the USA +8%, Netherlands and Sweden both +13%, France +12% and Brazil +40%

So organic brands outperformed the overall market whilst supermarket own-label underperformed relative to the organic market as a whole. For the first time in recent years the supermarkets share of the organic market has shrunk (although they still account for over 70% of total UK organic sales). The report ‘s author Martin Cottingham concludes that “the independent retail sector and those supplying it are more optimistic about the outlook for 2012 than the supermarkets and their suppliers. Among the three leading supermarkets in the organic market only Waitrose anticipates growth, while Tesco and Sainsbury’s anticipate a decline”

So who is best placed to capture those organic sales? Your local specialist natural food retailer! Now is the time to emphasise the wider choice of organics you stock compared to a typical supermarket. The Organic Market report suggests that 80% of households bought organic last year: make sure they buy at least some of it from you!

PS You can download the full Organic Market report here:
www.soilassociation.org/LinkClick.aspx?fileticket=5QS24GNSZTA%3d&tabid=116

Report: Soil Association Annual Conference 2012

simon — Mon, 05 Mar 2012 11:24:14 +0000

Over 500 delegates gathered in London on Friday 2^nd March at an extremely well-organised and informative one day conference under the title ”Facing the future: Innovation in food and farming”.

Here are the two most interesting parts of the day.

Presentation from Julian Walker-Palin, Head of Corporate Sustainability, Asda

Consumer research conducted with 5,300 Asda shoppers:

Main reason given not to buy Green products “too expensive”
94% bought ‘healthy’ products
74% bought ‘green products
Customers will spend “a few pence” more on an ethical product: top are Fairtrade, Energy Useage, Animal Welfare
Fairtrade, Local and Organic products all thought to be of equal quality
26% thought Asda could be greener by selling more organic products
100% of female shoppers and 99% of male shoppers had heard of organic
Organic was thought to be pesticide free, produced to strict rules, free from additives
51% of shoppers thought organic should be priced the same as non-organic, 34% thought it should be twice as expensive, 6% thought it should be half the price of non-organic

2. Soil Association Organic Market Report 2012

Sales of organic products in the UK fell by 3.7% in 2011 to £1.67 billion
Sales through box schemes, home delivery and mail order increased by 7.2% to £167m
Committed organic shoppers looked increasingly to specialist retailers as the supermarkets reduced choice and availability of organic products
The main cause of the markets overall decline was a 5% drop on multiple retail sales driven by a challenging year on the high street, continuing cuts in ranges and shelf-space and a lack of investment in own-label organic ranges (own-label sales are down 9.5% but organic brands only dropped by 2.9%)
The organic sectors that grew in 2011 were lamb (+16%), baby food (+6.6%), and poultry (+5.8%)
Among the three leading supermarkets only Waitrose anticipates growth while Tesco and Sainsbury’s both anticipate a decline
Top reasons for consumers buying organic are fewer chemicals (62%), natural and unprocessed (57%) and healthier for me and my family (52%)
UK remains the only organic market in decline: sales are up elsewhere with the USA +8%, Netherlands and Sweden both +13%, France +12% and Brazil +40%

Frying Tonight! Cooking with Cocoa Butter

simon — Tue, 07 Feb 2012 08:33:00 +0000

A couple of weeks ago I was walking round the extensive warehouse of HB Ingredients when I spotted a large cannister of something called Mycryo, made by Callebaut. “That” said my host Carl Martin “is cocoa butter and it is brilliant for frying eggs. Try it”. So I did, and Carl is right.

When you open the 600g pack you see a free-flowing cream-coloured powder: 100% deodorised, spray-crystallised cocoa butter. Tip a little into a frying pan, crank up the gas and off you go. Carl is right – it is great for fried eggs. The smoke point is high and it leaves no taste. After some trial and error I achieved the best results with some marinated tofu that I had coated in flour and then shallow fried. The coating that resulted was crispy and tasty.

Callebaut recommend Mycryo for cooking meat or fish where you coat the piece in Mycryo before placing in a pan with no other oil present. As a vegetarian I will let others check that out.

With plenty of cocoa butter around this strikes me as a really good way of using some of the surplus. I don’t rate Mycryo as a name but otherwise I think this is a very interesting product.You can find more information at www.mycryo.com/callebaut.

The Squeezed Middle: How Independent Retailers Can Benefit From Changing Shopper Behaviour

simon — Tue, 13 Dec 2011 12:10:45 +0000

I was interested to learn that the three UK supermarkets growing fastest at present are Aldi, Lidl and Waitrose. That is two discounters who major on low prices and a limited product selection plus our most up-market food retailer. What do they have in common?They are all very single-minded in what they do. Unlike Asda, Sainsbury’s and Tesco these shops do not offer basic, medium and top-tier ranges: everything is pretty much the same price-range (Aldo and Lidl cheap, Waitrose reassuringly expensive. And yes I know that the Waitrose Essentials range exists but it is not positioned as a low price option). So being clear with your price positioning seems to work.

Is it all about people with not much money going to Adli and Lidl and people with lots of money going to Waitrose? My own experience is that this is an oversimplification. The Lidl I visited last week had plenty of Mercedes in the car park and customers who were selectively buying high quality, low priced items such as single origin, high cocoa solids 100g chocolate bars. The after effects of the economic recession have made shoppers more promiscuous – they are less likely only to shop in one supermarket. It may be that we are moving towards the German model where you are seen as canny if you get your loo rolls from a discounter and your baguette from the local French deli.

What can the natural food retailer take from this? Low cost is attractive to customers but it is not the only option. Having a clear and well-signposted price position is important, whether you are low cost / no frills or whether you justify higher prices through a higher-quality shopping experience. Perceived value remains the key.

Some Notes from the Soil Association Organic Briefing 26.09.11

simon — Wed, 28 Sep 2011 14:18:54 +0000

Held at the Rudolf Steiner Centre, London

OCADO

Lawrence Hene

Head of Grocery Retail

Ocado (www.ocado.com)

1.1Market Share

Organic is 10% of sales and still in growth (11% year-on-year: however total business grew by 20%)
Ocado has less than 0.5% total retail shares but 5% of organic sales, ie over-trades on organic x10
Believe that future growth will come from brands not own-label
Total range to expand to 40,000 SKUs, 10% to be organic

1.2 Reasons For Outperformance

Wider range – 1391 organic SKUs versus Waitrose (1067), Tesco (634), Sainsbury’s (439)
More organic brands (1100 vs 300 Duchy/Waitrose own-label)
Availability of information and content onsite
Better customer profile

1.3 Customer Profile

Average shop = 50 items
Over 40% of customers are under 40, almost 10% are over 60
60% of customers have household income below £60k
14% have a baby
Under half of customers live within the M25
Coverage of UK is now 72% of consumers
20% of sales now made via mobile phones (early adopters)
Organic sales are 7-11% of total sales across the UK
79% of customers buy at least 1 organic item
27% of customers buy at least 5 organic items
Organic brands outperform organic own-label (Waitrose and Duchy)

1.4 Adding new lines

Possible from Feb 2012
Write to LH as the first step
Sampling a good launch vehicle (highly targetted)
Transactional websites possible from next year
Website to be personalised “soon”

2 Ed Garner, Kantar

Data generated by recording what 25,000 UK households actually buy (do rather than say)

2.1 Current UK retail scene

Growth is coming only from discounters (+12% year-on-year) and Waitrose (+9%)

2.2 UK organic sales

Year-on-year organic performance (%)

Asda –22

Morrisons –25

Sainsbury’s –2

Waitrose –5

Tesco –7

Overall –8

Organic chocolate now worth £31m per year (w/e August 7 2011)

Challenge: niche organic fixture or mass market run of store?

2.3 Organic penetration

85% of households buy organic in a year
63% of buyers account for 13% of sales
8% of buyers account for 54% of sales

Top 4 organic brands have sidelined organic claim to be replaced by:

Sustainable (Duchy)
Sense of place (Yeo Valley)
Health (Rachel’s)
Luxury (Green + Black’s)

3. Helen Browning – new Soil Association strategic plan

“Healthy soil, healthy people, healthy planet.”

Themes

Facing The Future
Good Food For All
Enabling Change

“Celebrate the complexity of organics”

SW 27.09.11

Confessions of an organic vegetarian

simon — Fri, 20 May 2011 07:45:27 +0000

Meat Free Monday (and Tuesday and Wednesday and Thursday and Friday and…)

There is nothing more illogical than an organic vegetarian, but that is what I am. Organic farming relies upon animals to add fertility to the land during the rotation of fields. It is technically possible to farm organically without animals (so-called stockless systems) but it is more difficult. And if farmers rear organic animals then it is logical that organic consumers need to eat the resultant organic meat.

I opted out of meat-eating during my student days around 30 years ago. My main motive was poverty – my student grant (in the days when it was possible to have one) could buy me nasty cheap meat or OK fruit and veg. Subsequently I discovered that I didn’t really like the taste or texture of meat. Much later I started reading about the cruelty involved in intensive animal production. At no point did I consider the environmental impact of meat eating, but this is something that we now all must do.

It has been estimated that to produce 1kg of animal protein it takes 10 times more land than it takes to produce 1kg of vegetable protein. So it will take ten times more land to feed a carnivore than a vegetarian.

And that’s why we are all going to have to do a lot more than give up meat one day a week (aka Meat Free Mondays, www.meatfreemondays.com ). Include the fact that ruminants such as cows emit greenhouse gases from their many stomachs and a vegetarian diet looks like the only way forward for the planet. In fact a vegan diet would be optimal, as dairy production carries the same sort of environmental baggage as meat production.

So maybe it will be meat or dairy once a week as a special treat. Which would be the way that most people in this country used to eat. Back to the future!

Rise of organic food stalled by recession

simon — Tue, 05 Apr 2011 14:33:49 +0000

Martin Hickman www.independent.co.uk

Monday, 4 April 2011

A £100m hole was knocked in sales of organic food last year as shoppers opted for cheaper produce in the economic downturn.

Overall, sales fell by 5.9 per cent from £1.84bn to £1.73bn, according to research by the Soil Association, the country’s biggest certifier of organic products.

The fall – outlined in the organisation’s 2011 Organic Market Report, to be published today, dashed the Soil Association’s prediction made last year of a 2 to 5 per cent recovery in 2010. However, it was half the 12 per cent slump in 2009, which ended 16 years of uninterrupted growth.

The fall also slowed in the second half of the year to around 2 per cent and continued to bottom out this year, according to the Organic Trade Board, which is running a £2m advertising campaign to promote organic food as tastier and kinder to animals and the environment.

Organic rules ban artificial fertilisers and pesticides and lay down higher standards for the keeping of pigs and poultry.

Amid concerns about the environment and food quality, the organic movement experienced a boom in the mid-noughties, with sales rising by up to 30 per cent a year.

However, as shoppers adjusted to a harsher economic climate last year, sales of organic fresh fruit and vegetables and dairy – which account for more than half of all organic sales – fell by 6.3 per cent and 2.7 per cent respectively. Fresh meat was down by 5.8 per cent.

Organic ready meals crashed 36 per cent, which the Soil Association put down to people cooking more cheaply from scratch.

By contrast, organic baby food continued its strong growth, jumping 10.3 per cent, and organic textiles – made fashionable by H&M and Zara – increased by 7.8 per cent.

The amount of land in organic production fell by more than 10 per cent, from 4.8 per cent to 4.2 per cent of all farmland, and the number of producers slipped from a record high of 7,896 to 7,567.

Production of organic vegetables and organic milk fell but cereal production increased, buoyed by high grain prices and strong demand for milling wheat.

The big supermarkets still clocked up £1.25bn in sales, 72 per cent of the total, but that was down by an above average 7.7 per cent on the previous year. Box scheme and mail-order deliveries grew by 1 per cent to £156m, probably because those customers have a stronger commitment to the movement.

The Soil Association pointed out that 86 per cent of households now bought organic products.

Despite the overall drop, the Soil Association was quietly confident about the future, saying that Tesco, Sainsbury’s, Morrisons and the Co-op expected sales to level off this year while Waitrose and Marks & Spencer predicted a small rise.

“The outlook for 2011 is cautiously optimistic,” it said. “Despite fragile consumer confidence in the wider economy, the report shows positive signs of resilience and recovery for the organic sector overall.”

Huw Bowles, the chairman of the Organic Trade Board – funded by producers such as Yeo Valley and Organix – said the economy had been the main reason people had reduced their spending. “A couple of years ago, people thought it was the end of the world and nobody would be able to afford organic, but as time has gone on, people have realised that organic is still here and that the reasons to buy organic are still still valid,” he said. “People are probably not buying as frequently and as much as they were two years ago.”

Roger Mortlock, the deputy director of the Soil Association, said it would be “rash” to make predictions for the future. “The instability caused by climate change, population growth and resource depletion mean that business as usual in food and farming is not an option.”

Local Is The New Organic…Not

simon — Wed, 09 Mar 2011 13:38:12 +0000

“Local Is The New Organic” is a headline from a recent edition of The Grocer. And there is no doubt that many people would like it to be so, especially supermarkets. It is much easier and cheaper to source potatoes ‘locally’ than organically. It also helps that there is no legal definition of the word local so, to paraphrase Alice in Wonderland, it means what you want it to mean. The honourable exception here is Waitrose who define local food as that sourced no more than 30 miles from the store. Local can refer to a village, town, county, region or even country, and I have seen all these descriptions used to justify the use of the word local on UK food and drink.
I don’t want to see South African apples on sale in my local greengrocers when UK apples are freely available. I am delighted at the renaissance in beer, bread and cheese that has resulted in the revival of artisan UK brewers, bakers and cheesemakers. I chair the judging at the Quality Food Awards ( www.qualityfoodawards.com ) and our Local category goes from strength to strength – every year it highlights the terrific food and drink available from small UK producers.

But what is inherently sustainable about local? Nothing. The 3,770 cow mega-dairy that was planned for Nocton could have been described as local if you were unfortunate enough to live in the vicinity. Locally sourced products are good for keeping food miles down, but this is just one facet of the sustainability challenge. And I want the whole thing – low input (preferably organic), Fairtrade, cruelty-free, sustainably packaged and from a company of whose ethics I approve. Where does local fit in? As one aspect of a much larger picture

Preparing for Change In the Ethical Landscape

simon — Tue, 08 Mar 2011 12:35:28 +0000

Footprint Forum, London, March 7^th 2011

Footprint Forum is organised by Foodservice Footprint whose remit is to address the environmental aspects of the foodservice process (more at www.foodservicefootprint.com ). Yesterday they organised an event at the NFT to consider how ethical marks and accreditation are having an impact on foodservice. Here are the some of the more interesting things I heard said

Wolfgang Weinmann, Cafedirect

Ethical onpack labels have proliferated in recent years – there are now over 90 in common use
This has lead to great confusion within industry and with consumers
Labels are NOT the answer to everything because they only deal with products and sourcing – what is needed is to look at the full sustainability impact of an entire organisation which must encompass sourcing, processing and how the organisation interfaces with other stakeholders (employees, investors, suppliers, consumers)
Sourcing should include a direct investment in helping producers achieve higher quality of crops and long term supply relationships (“sustainable supply”)
Processing is nor currently covered by labels – we need a “cradle to grave” approach where the inside of the product is consistent with the outside
There has been much progress made by ethical labelling over the last 20 years – now we need to move on from being product-led to whole company evaluation

Shefalee Loth, Which? Magazine

Recently carried out some research with consumers and ethical labels (survey plus focus groups)
Surprised by low level of understanding re the various onpack logos
Fairtrade logo known and understood by about 80% of consumers but the others much less so
Consumers feel there are too many schemes, streamlining number of accreditors would be good
Popular were schemes that encompass more than one aspect of a product eg Red Tractor
Consumers want logos that are independent, verifiable and underpinned by scientific evidence (supermarkets own schemes not popular)
40% of consumers want an ‘omni-label’ that covers everything

Bill Vorley, International Institute for Environment and Development

Local is currently a very strong driver, this leading to conflicts between supporting small farmers in the South vs supporting local farmers in the North (however there is nothing inherently sustainable about local food, however it is defined)
Despite this big companies making strong commitment eg Unilever 100% sustainable procurement by 2020, Walmart to triple sales from emerging economies, Co-op to source everything that can be Fairtrade by 2013
Four possible options for companies going forward: adopt labels and standards, set targets, initiate informed debate with stakeholders as to what they want, adjust fundamental business model to ensure sustainability

Panel Discusion

“Ethical certification started off in retail. Food service needs it’s own certification schemes with lower costs per unit and more appropriate documentation requirements.” (Anil Alim, BaxterStorey)
“Some companies like Cadbury’s see working more closely with farmers as a way of securing a long-term ingredient supply in times of shortage – the Fairtrade status is almost a bonus. Interesting development is Albert Heijn’s ‘Pure and Honest’ which represents a bundle of sustainable standards – expect more of this. Ethical schemes need to show impact on the ground. We expect more collaboration between schemes being developed in new industries.” (Karin Kreider, ISEAL)
“We will have to strip cost out of the certification and label initiatives and develop a low-cost alternative to certification.” (Bill Vorley, IIED)

SW 08.03.11