Where will Irish organic food find new markets in 2010 and beyond? It appears that the European market for organic products is surprisingly strong at present.
According to Amarjit Sahota, director of Organic Monitor, the UK based research and consultancy company, estimated overall growth in Europe was between 2 and 6 per cent in 2009. This is a drop from the double-digit growth rates of previous years but it is still unusually strong for a premium priced category.
The picture for organic food sales in 2009 was varied across Europe. Some some countries, such as the UK and Spain, suffered badly, whereas Scandinavian countries fared better.
Both the UK and Spain suffered from the global economic recession badly, and this is reflected in the organic market in each of these countries.
However, according to Sahota, the attitude of retailers played an important part too: expecting a downturn in demand for organic products, many retailers in the UK and Spain discontinued organic lines.
This contributed to a significant reduction in sales figures between August and March, but that since then, the market has stabilised.
There have also been signs of growth more recently in these two countries, which prompted retailers to admit that they were overly hasty in discontinuing organic lines.
For example, a recent survey from market research firm Mintel in the UK shows that nearly 40% of consumers claim they haven�t changed organic product purchasing habits because of the recession and only a mere 3% have stopped buying organic products altogether.
�Heavy users of natural and organic food and drink are most likely to indicate they�ve traded down to less expensive organic options,� notes David Browne, senior analyst at Mintel.
�However, less-frequent consumers of organic products have shown that they haven�t shifted their behavior. This is good news for the organic food and drink market, as this group may begin to buy more once recession-related fears begin to fade.�
Outside of the UK and Spain, many markets held firm for 2009: Italy, Germany and France all posted positive growth in 2009.
And in Sweden and Denmark, Organic Monitor said double-digit growth occurred in 2009 thanks to greater economic resistance to the recession and a more steadfast attitude from retailers.
Organic food sales from supermarkets and department stories in Denmark rose to �671m in 2008, marking a 29 per cent vertical rise on the year before, according to the Danish business daily Borsen.
According to Organic Monitor, growth rates for organic are strong in Scandinavian countries because of a combination of consolidation, culture and the economic backdrop.
�Their economies have not been as affected by the financial downturn as the UK, Germany, Spain and other European countries,� according to Sahota.
In addition, Scandinavians � and the Nordic culture � in general appear to be more conscious about environmental issues, he continued.
"Despite the very high cost of living, they don't seem to mind paying more for good quality products," says Sahota of the Scandinavian consumers. This culture contrasts with the 'discounting phenomena' in Germany and the UK in particular.
Consolidation has also been a factor. Between 2006 and 2007, many product ranges were re-vamped.
"After a period of slow growth and consolidation, growth kicks in and investment follows," explained Sahota, suggesting that Scandinavia is currently at the top of the cycle, an 'upturn' that contributed to the high double-digit growth witnessed in 2008.
The agri-food sector in Ireland is heavily export focused, so it is important for the sector to be aware of the trends across Europe. Traditionally, the UK has been a strong market for Irish organic products.
However, there are signs that the market's focus has begun to change towards mainland Europe. It is likely that another strong Irish delegation will travel to the world's biggest organic food trade fair, BioFach, which runs from 17-20th February in Germany . Last year's event led to significant new markets being accessed by Irish organic companies.
For more, see: BioFach
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