I'm currently doing a three parter on the economy and organic in the examiner. For the bang up to date stuff on this ever changing dynamic, you'll have to get it in the examiner each thursday! (See today's examiner for the most recent figures on the organic market)
My next posting will focus on producers and others in the organic agri-food system. Here's a version of what was there last week:
The current economic situation, which is likely to hold for the foreseeable future, is a new economic climate for organic food producers and consumers alike.
Undoubtedly, consumers are a lot more careful about what they buy now. Consumers are now more likely to try a bit harder to get better value.
Recent research by Bord Bia pointed to growth all through 2008, with slower though still real growth more recently.
�Our research in other areas would suggest that consumers are moving back to standard brands, and away from premium brands.� According to Lorcan Bourke of Bord Bia.
�Having said that, I wouldn�t loose the overall impression of growth. Some organic products has made it into the mainstream shopping basket as part of the weekly shop�
Lorcan points to recent research, which suggests some positive trends:
�In terms of the total potential market, 61% are now open to organic food�.
The research suggests that there are three broad categories within this 61%.
There is a total adult grocery shopping population of 2 million people.
Within this, believers, or a hard core of committed consumers, account for 17% of the market. This is 350,000 people.
Those who seek organic for a specific reason (�health managers and status seekers are the categories used in this research) are 28% or 550,000 people.
While the last group, defined as �aspirational improvers� in this research are 7% or 140,000. This group is made up of people who would like to buy more organic but think they can�t afford it. Often, this is young people with large families on a tight budget.
Another 9%, or 170,000, who don�t yet purchase organic, are considered �evolving considers�.
Lorcan points to the fact that the incidence of buying organic in the last 6 months, (i.e. up to end of August 2008) was 52%. In 2003, that was just 41%. Also, 45% of all shoppers purchased something organic in last month � the equivalent figure in 2003 was just 20%.
UK research also paints a positive picture in the early part of 2008, but suggests significant tailing off more recently.
UK organic fresh fruit and vegetables box schemes are holding steady, but involve more imports as people grow a slightly greater proportion of their own food and use the box scheme for, ironically, more exotic imports.
The organic egg market seems to have been particularly hit in the UK. Many UK consumers have changed over to free range for at least the present. The production differences and thus eventual mark up is quite significant in organic as compared to either conventional or free range eggs.
However, experts in the UK suggest that rising farmer costs, inter supermarket competition and a poor summer are all blamed for contributing to a confused climate for shopping, where all higher end produce is in limbo at present.
In the current economic climate, consumers may start to buy less convenience and value added foods, and may eat out less. Also back garden growing, cooking at home more from scratch with primary products, more affordable cuts, portions and brands are all re-emerging.
This is not necessarily all bad news for organic producers, though it is a different dynamic.
Consumer moves from one retailer to another is also noteworthy. One effect is that LIDI now carry many organic lines. However, with the exception of Irish organic minced beef and milk from northern Irish organic farmers, many of the organic products in the German discounter are imported.
Harvest time comes around yet LIDI still stock an array of imported organic fresh fruits and vegetables, as though season was irrelevant.
(I'll post more about the egg thing in Ireland next posting!)
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