2015 Organic Market Report shows strong growth and a bright future

The Soil Association 2015 Organic Market Report was published last week and the cautious welcome with which the 2014 report was received (the first to show market growth for 5 years) has blossomed in to full blown optimism.

The organic market in Wales and the West¹ is following this trend having grown by 1.4% to £96.3m. Overall the UK sales of organic production in 2014 were up 4% to £1.86billion compared to the previous year, all the more remarkable in the context of a 1.1% decline in the food and drink market.

Organic eggs and poultry are enjoying a particularly strong revival with 15.8% and 8.2% increases respectively across the UK and 18.8% and 7.7% in Wales. Dairy in Wales and the West is up by 6.2% compared to the UK’s 7.7% and this against a decline of 3% in the non-organic market.  The growth of the market for organic fruit in Wales has outpaced the UK, showing 7.5% compared to 6.4%, but vegetables and salads have decreased slightly in both Wales and UK.

Tony Little, Better Organic Business Links Project Officer said: “The recovery from the recession is, of course the main driver behind the figures while the motivations for buying organic food remain pretty much as they have been over the last 10 years: concerns over risks posed by pesticide residues and GM food; the environmental benefits of organic farming; animal health and welfare. The catering market has increased by a staggering 13.6% in the last year on the back of the success of the Soil Association Catering Mark which is rooted in a desire to improve the quality and sustainability of food in public institutions such as schools, hospitals and care homes. Aberystwyth University has already gained a bronze standard as it benefits from its very own on-site farm and greenhouses, guaranteeing a short supply chain and low food miles. In the retail sector it is the independents and direct marketers who are seeing the strongest growth; 8.7% and 11.7% for independent retail outlets (shops, farm shops, farmers markets) and box schemes/ online retailers respectively, compared to just 2.2% for the supermarkets.”

However the red meat sector continues to decline in the UK, down 9.2% for lamb and 3.6% for beef, with Wales and the West seeing a contraction of 15.6% and 8.5% respectively in the market.  During this period farmers have received a premium for their beef and lamb and both the drop in consumption and premium paid are likely to be the result of a shortage of organic red meat.  This was reflected in discussions when key organic businesses came together in Cardiff earlier in the month to start thrashing out a strategic direction for organic food and farming in Wales.

The fragility of the UK market for red meat is a challenge, and businesses are responding by diversifying markets, both in terms of geography and routes to market. The burgeoning export market is increasingly important for Welsh lamb and beef and many businesses are beginning to focus on this sector of the market.  At home the growth of the catering market and the independent/ direct sales/ online marketing present big opportunities. From a demand and supply perspective, the situation will be alleviated by a drop of 18% and 24% in beef and lamb respectively, a trend linked to the reduction of the area of organic land in Wales over the last couple of years.

Textiles deserve a mention and, in a Welsh context, wool in particular. Wool output dropped by 17%, again a reflection of the contracting production base, but, for the first time in many years, producers of the finer grades of wool enjoyed a 15p/ Kg organic premium.

Tony Little added “All in all this report is confirmation that the organic sector is back on a firm footing after some difficult years. Sales are up significantly in areas where the overall food markets are down. Significant opportunities are emerging both home and abroad. There are still challenges, of course, but this report points to a brighter future for the organic movement.”

Download the full report here.

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