Crunch time for organic food sales

Published on Sunday 23 November 2008 20:56

SALES of organic food could fall sharply as cash-strapped Scots seek out cheaper options, a new survey has predicted.

Almost half of shoppers said they would reduce or give up buying organic food in the next year, which could dramatically halt the rapid growth of the industry in recent years.

But Scottish farmers said last night they would continue to push the benefits of their products, as well as targeting customers looking to support local producers.

The appeal of organics has led to an average of 16 per cent rises in sales each year from 2003 to 2008.

The total UK organic food and drink market is now worth 1.6 billion, but some supermarket prices show a significant price jump for choosing organic or environmentally friendly options.

Organic bananas from a leading supermarket yesterday cost 2.12 per kilo, while the non-organic fruit was just 85p/kg. Carrots were also cheaper in non-organic form, costing just 50p/kg compared to 1.32/kg. And lamb was a third cheaper – 14.99/kg compared to 9.98/kg.

But market research firm Mintel suggests in a report out today that such growth will not continue, as consumers tighten their financial belts.

Richard Perks, director of retail and financial research, said: "British consumers are clearly beginning to question the value of organics and the added benefits they get from paying the premium price.

"On top of the effects of the financial problems, organic food is facing increasing competition from other ethical choices including fair trade and locally sourced foods."

Ross Paton, owner of the Torr Organic Farm in Auchencairn, Dumfries and Galloway, and chairman of the Caledonian Organics co-operative, said he had noticed a drop in cuts of beef but his organic milk was still selling well.

He said: "Prices for milk have not fallen to the farmer, and milk especially is a commodity that people get in a habit of buying. We are concerned about a downturn like everyone is, but we have to keep preaching the message about organics and hope people will buy it."

Bruce Bennett, owner of the Pillars of Hercules farm in Fife, said he hoped to weather any downturn thanks to the popularity of his shop.

He said: "We are pretty busy. Our cafe and farm shop have a lot of loyal customers. This is the local shop for a lot of people. A downturn might affect supermarkets more where there is more direct choice between organic and non-organic products. It's not the same kind of choice locally."

The Soil Association said greenhouse gas emission targets would make organic and "low-input" farming the norm in the long term, even if there was a short-term downturn.

A spokeswoman said: "We have to be realistic. We have seen a slowdown. We are supporting our producers, but organic food is not going to disappear just because there's a credit crunch."