How a downfall in organic sales is good for independent retailers

In March the Soil Association released their Organic Market Report 2012 . The headline figure (seized on by the media) was  that sales of organic products in the UK fell by 3.7% in 2011 to £1.67 billion.

However equally interesting was that sales through box schemes, home delivery and mail order increased by 7.2% to £167m. So it appears as though committed organic shoppers looked increasingly to specialist retailers as the supermarkets reduced choice and availability of organic products The main cause of the markets overall decline was a 5% drop in multiple retail sales driven by a challenging year on the high street, continuing cuts in ranges and shelf-space and a lack of investment in own-label organic ranges. Supermarket own-label sales are down 9.5% but organic brands only dropped by 2.9%. Top reasons for consumers buying organic are “fewer chemicals” (62%), “natural and unprocessed” (57%) and “healthier for me and my family “(52%). Frustratingly the UK remains the only organic market in decline: sales are up elsewhere with the USA +8%, Netherlands and Sweden both +13%, France +12% and Brazil +40%

So organic brands outperformed the overall market whilst supermarket own-label underperformed relative to the organic market as a whole. For the first time in recent years the supermarkets share of the organic market has shrunk (although they still account for over 70% of total UK organic sales). The report ‘s author Martin Cottingham concludes that “the independent retail sector and those supplying it are more optimistic about the outlook for 2012 than the supermarkets and their suppliers. Among the three leading supermarkets in the organic market only Waitrose anticipates growth, while Tesco and Sainsbury’s anticipate a decline”

So who is best placed to capture those organic sales? Your local specialist natural food retailer! Now is the time to emphasise the wider choice of organics you stock compared to a typical supermarket. The Organic Market report suggests that 80% of households bought organic last year: make sure  they buy  at least some of it from you!

By Simon Wright

Organic and Fairtrade brand specialist
Simon Wright is the founder of OF+ Consulting. A former technical director at Green & Black’s and Whole Earth he is one of the foremost brand advisers to the natural and organic sector.