in time of recession, can organic food be a reality for the majority?
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In time of recession, can organic food be a reality for the majority?. Susanne Padel Institute of Biological Environmental and Rural Sciences. Outline. 10 year trends of the organic sector Who is the organic consumer? Some more recent trends of the organic market - PowerPoint PPT PresentationTRANSCRIPT
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In time of recession, can organic food be a reality for the majority?
Susanne Padel Institute of Biological
Environmental and Rural Sciences
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Outline
10 year trends of the organic sector Who is the organic consumer? Some more recent trends of the
organic market Can organic food be a relality?
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Organic agricultural land by region (2007)
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Global organic market 1999-2007
97% of consumer demand in North America (43%) and Europe (54%).
Asia, Latin America and Australasia are important producers and exporters
Supply problems for fruits, vegetables, beverages, cereals, grains, seeds herbs and spices
Growth at lower rate is expected to continue
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UK organic certified land area since 1997
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100
200
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thousand ha
'97 '98 '99 '00 '01 '02 '04 '05 '06 '07
NI
Scotland
Wales
England
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UK Organic sector development since 1997
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97 98 99 '00 '01 '02 '03 '04 '05 '06 '07
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1000
2000
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4000
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6000Land area (thousand ha)
Retail value (£ million)
No of holdings
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Organic market and sales channels
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200
400
600
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2004 2005 2006 2007
Farmers markets
Box & mail(producer)Box & mail (retail)
Independent retail
Supermarkets
Source: KeyNote (2008)
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Who are the organic consumers?
We used to think Higher social class and education
•2/3 are A,B,C1 (compared with 1/2 in population)
Fewer children and older Mainly living in London, South East,
South West and WalesBut appeal has widened Manual and casual workers, students
and pensioners now account for 50% of consumers
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Why people buy organic? (% consider very important)
Quality and taste (31) No GM ingredients (26) High animal welfare standards (25) Avoiding food with pesticides (25) Avoiding artificial colours & additives (23) Wanting to know where food come from (22) Fair prices and wages for farmers &workers (20) Farming methods encouraging wildlife (20) Impact of production and transport on greenhouse
gases and climate change (14)
(Source: Market Tools/ZOmnibus for Soil Association, January 2009)
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Two broad segments of consumers
Regular/committed (15%) Claim to buy more then
40% of food as organic Well educated; health
aware Range of income levels Believe in organic product
quality Seek other attributes
• Environment
• Animal welfare
• Fair trade and local
Account for > 80% of spend
Occasional (30%) and rarely (48%)
Claim to buy between 35% and 10% as organic
More price & convenience sensitive
More sceptical about some claims
Less knowledgeAccount for < 20% of spend
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Knowledge and availability remains a problem
¼ of those that don’t buy regularly would like to know more.
Organic products are bought unknowingly
People believe to buy organic if in fact they are not (e.g. on farmers markets, natural)
Limited knowledge legal status of ‘organic’ and annual inspection/certification requirements
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More recent trends
Market has grown by 1.7% between 2007 and 2008 (£2.1 billion)
Nine out 10 households buy organic food•increases in the last 5 years
Broader appeal Average spending has fallen
•from £51.30 to £50.55
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Dairy products (29.5% of sales)
Above average growth (07-08) •+10% milk
•+11.5 cheese
•+1.5 yoghurts Now the largest sector Commitment from key
players to communication campaign
Comparatively low premiums
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Fruit & veg (26.2 % of sales)
Available in supermarkets but also box schemes, local shops, farmers markets
Reductions in consumer spend during 2008
Heavy reliance on imports•Despite steady increase in
horticultural land area in the UK
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Meat (<10%)
Above average growth rates • +13% for red meat and
• +17% for poultry Downturn in supermarket sales in late 2008
• Lower value cuts and products (beef burgers)
• Cheaper outlets
• Affected by grain price increases
• Animal welfare important ‘Chicken out’ campaign
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Difficulties balancingQuality
Health
Taste
Animal welfare
Local food
Fair price
Wildlife
Climate change
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Labelling jungle?
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Expected responses to the recession...Different types of shopping
Fun
Source :Bord Bia Research – Feeling the Pinch
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Shopping Habits will Change…
Fun
Source :Bord Bia Research – Feeling the Pinch
• Shoppers will first try to reduce cost of Vital essentials– Promotions, Own brand, Discounters
• And will then cut out Fun expenditure
• Reluctant to cut back on Lifestyle or Sanity purchases
– Some affordable luxuries may actually increase!
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© www.igd.com/analysis© www.igd.com/analysis
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...food that hasbeen produced
locally in the area Ilive
...organic food ...foods that supportFairtrade
...foods with highanimal welfare
standards
% m
ain
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2003 2004 2005 2006 2007 2008 2009
Specific food purchases –environmental and ethical
I have specifically bought…
Source: IGD Consumer Unit, 2009
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Summary and conclusions
Consumers have reviewed spending on premium organic foods
People continue to seek ways to make a difference
Organic market largely driven by committed regulars
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Can organic food be a reality for the majority?
Availability remains a problem Expensive image, not always reality
•Checking prices
•Premiums vary between outlets More home cooking and less
convenience food and changes in diet
We need clear messages about the wider benefits of organic food