UK organic food sales fall, outlook challenging

Sales of organic food in Britain have fallen further over the last year, as consumers seek to save money in tough economic times, and recovery in 2012 will be difficult, the Soil Association said on Friday.
Sales in the 12 months to end-October fell around 5 percent, after falling 5.9 percent in 2010, although online businesses, independent shops and box schemes performed well, Finn Cottle, trade consultant at Britain's largest organic certification body, told Reuters in an interview.
Final sales figures for this year have not been published yet, but the industry was worth 1.7 billion pounds ($2.63 billion)in 2010, according to the Soil Association, with shoppers spending more than 33 million pounds ($51.07 million)a week on organic products.
"We're still not into a positive situation, but it's been relatively stable given the lack of consumer confidence generally," she said.
"I think it will be challenging to recover in 2012, but what we seem to be experiencing is that those channels where organic is strong, continue to be strong."
Organic sales have struggled to pick up in a year of record low consumer confidence in Britain, where unemployment recently hit a 17-year high. Consumers stop buying organic food and trade down to cheaper options when their household budgets are under pressure.
A committed core of 8 percent of consumers accounts for over half the market in organic food. Data for November and December was not available yet, Cottle said, but customers usually spend more in the run-up to Christmas, which could boost organic sales.
Cottle said supermarkets have not done enough to promote organic products, instead focusing on discount lines that appeal to consumers in an economic downturn.
"For 2012, we would really love that the supermarkets put organic back on their agenda again and they start refocusing on it," she said. Baby food, butter and yoghurt have performed particularly well this year. Organic red meat has also shown strong sales because it does not cost much more than non-organic meat and retailers have promoted it, Cottle said.
The organic industry must target occasional buyers and show consumers "this is not a fad" next year, she added. "It's a bit of a mixture as to what the outlook is," she said.
"There's everything to go after. We still have a 1.7 billion pound market and we're going to make sure that we maintain and grow it."