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Global Demand for Organic Products on the Uptick

BRISTOL, United Kingdom—Global sales of organic products continue to defy the economic downturn, growing by 8.8% in 2010 with growth continuing into 2011, according to a new market report from The Soil Association. The report also found 8 out of 10 households (83%) bought organic products in 2011.

According to the “Organic Market Report 2012," strong growth has continued in the United States, which is the world’s leading organic market, and all major European organic markets with the exception of the United Kingdom where overall sales were down by 3.7% in 2011. Sales of organic products in China have quadrupled in the last five years, and Brazil is reporting an annual growth rate of 40%. Organic sales in Asia are predicted to grow 20% annually over the next three years.

The report noted the main cause of overall market decline in the United Kingdom was a 5% drop in multiple retail sales, which account for 71.4% of organic food sales. Reduction of choice, lack of communication about the reasons to buy organic products and a lack of investment in private-label organic ranges are the key factors of the decline. Despite the tough environment, there are a number of U.K. organic success stories, including baby food (+6.6%); lamb (+16%); poultry (+5.8%) and cosmetics (+8.7%). Innovation in retail has benefited the sector with sales through box schemes, home delivery and mail order up by 7.2%.

Outside the retail sector, the restaurant and catering sector grew by 2.4%. Notable successes in 2011 include an increased organic food in schools, nurseries and hospitals through the Soil Association’s Food for Life Partnership and Food for Life Catering Mark.

Data also revealed local and direct sales of organic fruit and vegetables and retail sales of organic fruit held their own, despite a drop in sales of organic vegetables and salads through multiple retailers. Dairy products and fresh fruit and vegetables continue to be the most popular organic categories accounting for 29% and 23% of sales, respectively.

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