Organic Food Market: latest

Recent UK figures suggest a decline in sales of organic food, though an increase in land area managed organically. See here for more.

What's the story in Ireland? See below.

Volume up, value down. That's the story of organic food sales in Ireland, according to the latest TNS Bord Bia figures.

Volume refers to the amount of food being sold, whereas value refers to the revenue this food brings in.

The research, which covers the period up to December 2009, finds Ireland�s organic sector was valued at �105 million, with the volume increasing by 1.6% to 36,518 tonnes, compared to 2008 figures.

According to Bord Bia �Reflecting general price deflation across the food market during 2009, the value of organic sales declined by 10 percent.�

In value terms, the biggest winners were dairy products, yogurt, hot beverages and dried cereals. The foods that performed least well in value terms were fruits, breakfast cereals, fresh beef, hot beverages and milk.

In particular, the proliferation of new organic milk-based products is helping drive growth in the organic sector.

This is reflected in the stability of what is called penetration, or the range of households purchasing organic food.

To sum up what is going on in the organic market in Ireland right now: while people are spending less and spending less often, a stable number are buying a larger range of products.

This overall picture may not seem especially positive. However, it is a slightly better performance than the export-orientated food sector in general, which has seen both value and volume declines.

Irish food and drink exports experienced an estimated volume decline of 3 percent. The value of these exports declined by 12 percent last year, or by just under �1 billion, to stand at �7.12 billion.

There are of course many justifiable reasons for both markets to be suffering: global recession and deflation being the primary ones.

For Irish organic beef exports, the strength of Sterling is a constant issue: sales are reported to be recovering somewhat by the Leitrim Organic Farmers' Co-op, which has over 160 farmer members, following a tough time in December.

The organic sector has responded to the challenging market situation in a number of ways.

Reaching out to Continental Europe is one strategy. In general, both the German and French organic markets have remained relatively strong of late.

The seafood industry has been especially successful in accessing these Continental markets.

Up until 2007, the main Irish attendees at BioFach, the world's biggest organic food trade show, were from the Irish seafood sector.

All Irish salmon now has either an ecological or the full organic certification. Irish salmon exports to France rose by over 30% in the first half of 2009. Ireland now exports about 3500 tonnes of salmon to France per annum, to the value of �18million.

Along with seven seafood companies, this year's BioFach saw another seven Irish companies participating.

BioFach is widely regarded as the most important trade event in the international organic food and drink calendar.

However numbers attending and exhibiting were down slightly in 2010 from 2009:

In 2009, the event attracted over 46,000 European and International trade visitors from 130 countries, who saw over 2700 exhibitors. 2010 saw 43500 visitors from 120 countries experience just over 2500 exhibitors.

Nonetheless, in a sign perhaps of a culled though more efficient marketplace, a larger number of exhibitors surveyed expected follow up business from BioFach than in previous years.

The German market is especially strongly represented at BioFach, so Irish companies who exhibited at the show have potential access to Europe's biggest organic market, with an estimated annual sales turnover of �5.8 billion.

Specific Irish companies, many of whom exhibited at BioFach this year, have also begun to step up to the mark. Along with many in the seafood sector, The Good Herdsman, Beechlawn Organic, Solaris Botanical Teas, Just Foods and both Mossfield and St. Tola's Cheeses have all been working to both upscale and to develop export markets.

Undoubtedly, there are more challenges than in previous years. However, organic farmers and food businesses are performing well, considering the circumstances.

organic sales in Ireland up 11%, organic sentiment reasonable

The absolutely latest organic sales figures that I've managed to access, which I received today, through Bord Bia from TNS, suggest the following for January 2009:

Sales of organic groceries: up 11%

Sales of conventional groceries: up 2.7%

Isn't that amazing? Despite all the hype, despite people's presumptions, despite people presuming the UK reality must always be the Irish reality, sales of organic produce is up 11% on last January's figures.

What's more, only a specific set of barcoded products are tracked by TNS. Organic accounts for a significant ammount of unbarcoded sales (e.g. loose fresh fruits and vegetables at farmers' markets) .

In other words, the true figure of organic sales increases may be higher again.

(Pic from the Wiki creative commons)

Below is an article on the statements people make about future spends - these always have to be taken with a pinch of salt, as people always paint themselves well in polls (well as in frugal these days)

According to a recent TNS mrbi survey on consumer spending plans for 2009, all consumer products will be affected by the state of the economy.

The organic sector can perhaps take some solace from the fact that that out of 18 spending options, it is placed 6th from the top, with the top being the least changed consumer spend.

Concerts, renting DVDs and overnight stays all fare far worse. Organic food will not be affected as much as treats - going out to drink - or bigger spends and investments, such as electrical items for the house.

However this consumer self assessment suggests that the spend on organic food will be 2/3 the level of 2008.

In general, it can be taken that the consumer will be more careful and thoughtful, and will put off some of the very big and perhaps unnecessary spends.

It is hard to be certain about how this sentiment will transfer into the weekly shop as the year unfolds, as food is neither a luxury nor a big marquee spend.

The different types of organic food are not demarked in this survey. A generic desire to spend less on organic is not subtle enough to be of much use to the food producer: how different will the organic food spend be on meat and milk when compared to pizzas and popcorn?

In other words, will it be more likely that consumers will think in the same way about their organic food preferences as their conventional ones, by keeping the staples?

Another confusing notion is surveying 100% of people about what only 45% of people actually do - purchase at least one organic item each month.

When I put this to TNS, they stated that �the data has been repercentaged (sic) to exclude those that do not buy organic�.

This then becomes a lottery of self-assessed organic consumers, where the respondents� relative organic spend does not even get taken into account.

Much of the growth in organics in the current decade has come from committed organic consumers expanding their purchasing range of organic food, rather than for new consumers, so the survey gives us little steer on the likelihood of these sales being affected.

There are always issues with aspirational surveys such as this one: in other words surveys which outline what people hope they will do in the future.

Perhaps these sorts of surveys should come with the kind of health warning that comes on a box of 20 Major.

According to this same survey, a full 49% claimed that they would be spending less on cigarettes in the coming year.

What exactly this means to the surveyor and to the surveyed, and how they are reconciled, is a minefield.

According to TNS, �spending less on cigarettes does not mean stopping smoking, but maybe cutting down one or two cigs a day, or switching to a cheaper brand or buying more duty free/illicit.�

Does the smoker hope, as almost all do, that they will just smoke less or even quit? This survey was conducted in the resolution month of January, after all.

In surveys, people tend to paint themselves in a positive light. Frugality is now chic, so promising to yourself that you�ll spend less on organic food probably resonates well with the consumer�s new self image. This may or may not transfer over into behavioural changes.

It is surely noteworthy that organic was in the indulgence category of the survey.
This would come as news to many, especially in the staple end of the market.

If I have another month of organic turnip soup indulgence, with the turnip clocking in at 1.20 in Tescos, I�d hate to see hardship.

However, it is certainly clear that the mainstream consumer is thinking about things never thought of since before the Tiger, and the organic sector like all the others needs to be aware of this.

Value is a combination of quality and price. To convince people of the price, the quality has to be there.

A Micra costs less than a Merc. Everyone knows and understands this. Does everyone know and understand why organic food is good value?