Organic Food & Drink

Market Assessment 2008 Sixth Edition, May 2008

Publication Date	May 2008
Publisher	Key Note
Product Type	Report
Pages	160
ISBN Number	not applicable
Product Code	KEY00135

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Summary

The total organic foods and drinks market increased in value at retail level by an estimated 10.4% in 2007. Although this represented a slowing of growth, it was still significantly above the rate of yearonyear growth for the total grocery market. Within this, the main sectors i.e. vegetables and fruit; dairy products; breakfast cereals, bread, flour and baked products; and meat, meat products and fish have held their shares. Combined, they held an 80.7% share of the total organic foods and drinks market as at 2007.

The balance included organic baby and toddler foods, which in 2007 accounted for 45% by value of the branded baby foods market a share far exceeding that of any other organic sector. Overall, organic foods and drinks accounted for only 1.6% of total grocery sales by value in 2007.

The introduction of 'decoupled' government payments in 2005 to organic farmers and growers, no longer related to organic production, and other schemes, had created new interest in the market among farmers and growers. In addition, the Soil Association continues to promote the health, environmental and animal welfare benefits of organic farming and growing, and of organic produce.

The total area of organically managed land in the UK peaked in 2001/2002 (year to April) and has fallen significantly since then. However, in 2005/2006 and 2006/2007 (years to January), the percentage of 'inconversion' land rose and that of 'fully organic' land declined. As at January 2007, 47.6% of the UK's organic land was in England, 38.1% was in Scotland and most of the remainder was in Wales (accounting for 12.8%, with Northern Ireland representing just 1.5% of the UK total). The decline in the overall area of organically managed land is in part due to the overcapacity situation, principally for organic milk, which occurred in the early 2000s. A sizeable proportion had to be sold as 'nonorganic' produce (i.e. at lower prices), leading to losses among dairy farmers. This has tended to make farmers and growers wary about entering the organic market in future, albeit that it shows strong growth.

The organic foods and drinks market is characterised by large numbers of relatively small producers and processors. As yet, major food companies have not entered the market in any sizeable fashion. There is growing activity among primary organic foods producers (of vegetables, fruit, milk and meat) to operate as cooperatives, and as franchises, to supply the market, and these are also involved with directselling outlets, notably box schemes.

Sales via these have increased substantially, although this is in large part the result of major multiples entering the field in order to hold their shares within total distribution. The original pioneers in organic food sales, Sainsbury's and Waitrose, hold much larger shares in organic food and drink sales than in the overall grocery market.

Content

1. Introduction
Reasons for Updating The Report
Key Sources
Definition
- 2. Strategic Overview
Background and History
- The History and Role of The Soil Association
- The Organic Conversion Information Service (Ocis)
- Definition of Organic Farming
- Genetically Engineered (Modified) Crops and Foods
- Organic Products Certification Bodies
- Table 1: Certifying Bodies and Their Coverage of Land and Enterprises
- (%, Thousand Hectares and Number), January 2005
- Organically Managed Land
- Table 2: Organically Managed Land in The UK (Thousand Hectares and %),
- April 19972005 and January 2006 and 2007
- Table 3: Organically Managed Land Areas in The UK by Nation
- (Thousand Hectares and %), April 2005 and January 2006 and 2007
- Table 4: Organically Managed Land in England by Standard Region
- (Thousand Hectares and %), January 2007
- Use of Fully Organic Land
- Table 5: Fully Organic Land in The UK by Land Use (Thousand Hectares and %),
- April 2005 and January 2006 and 2007
- Table 6: Fully Organic Land Use in The UK X Arable Production
- (Thousand Hectares and %), April 2005 and January 2006 and 2007
- Table 7: Fully Organic Land Use in The UK X Horticultural Production
- (Thousand Hectares and %), April 2005 and January 2006 and 2007
- Numbers of Producers and Processors/Importers
- Table 8: Producers and Processors/Importers of Organic Foods and Drinks
- in The UK (Number), April 19952005 and January 2006 and 2007
- Table 9: Producers and Processors/Importers of Organic Foods and Drinks
- in The UK by Nation (Number and %), April 2005 and January 2006 and 2007
- Table 10: Producers and Processors/Importers of Organic Foods and Drinks
- in England by Standard Region (Number and %), January 2007
- Contents Organic Food & Drink
- Key Note Ltd 2008
Market Dynamics and Segmentation
- Factors Affecting The Market
- Challenges to Organic Farmers and Growers
- Government Policy and Assistance in Organic Farming and Growing
- Health Benefits of Organic Foods and Drinks
- Environmental and Animal Welfare Benefits
- The Move from Niche to Mainstream: Higher Selling Prices
- The Level of Imports
- Table 11: Imports of Primary Organic Foods by Major Multiples
- (% by Value Imported), 20042006
- Market Size
- The Total Market
- Table 12: The Estimated Total UK Market for Organic Foods and Drinks
- by Retail Value at Current Prices (gm at Rsp), Years Ending December 20042007
- Retail Sales by Sector
- Import Levels
Distribution
Competitive Structure
Advertising
The Consumer
Market Forecasts
- Table 13: The Forecast Total UK Market for Organic Foods and Drinks
- by Retail Value at Current Prices (gm at Rsp), Years Ending December 20082012
- 3. Market Size
The Total Retail Market
- Table 14: The Total UK Market for Organic Foods and Drinks by Retail Value
- at Current Prices (gm at Rsp), Years Ending April 19942003 and Years Ending
- December 20032007
- Figure 1: The Total UK Market for Organic Foods and Drinks by Retail Value
- at Current Prices (gm at Rsp), Years Ending April 19942003 and Years Ending
- December 20032007
The Retail Market by Sector
- Table 15: The Estimated UK Market for Organic Foods and Drinks by Sector
- by Retail Value at Current Prices (gm at Rsp and %), Years Ending December 20042007
- Figure 2: The Estimated UK Market for Organic Foods and Drinks
- by Sector by Retail Value (%), Year Ending December 2007
- Vegetables and Fruit
- Dairy Products
- Breakfast Cereals, Bread, Flour and Baked Products
- Meat, Meat Products and Fish
- Baby and Toddler Foods
- Chocolate
- Coffees, Teas and Other Hot Drinks
- Soups and Cooking Sauces
Soft Drinks and Fruit Juices
- Wines, Beers and Ciders
- Other Processed Organic Foods
- 4. Advertising and Promotion
Main Media Advertising Expenditure
- Table 16: Main Media Advertising Expenditure on Organic Foods and Drinks
- by Brand/Product (g000), Years Ending December 20052007
- Events
- 5. Distribution
Retail Sales by Distribution Channel
- Table 17: Retail Sales of Organic Foods and Drinks in The UK by Distribution Channel
- by Value at Current Prices (gm at Rsp and %), Years Ending December 20042007
- 6. An International Perspective
Global and European Markets
- Breakdown by Continent
- Table 18: The Worlds Organic Farmland by Region (Million Hectares and %), 2006
- Oceania
- Europe
- Latin America
- Asia
- North America
- Africa
- Europe
- Organically Managed Land
- Table 19: Organically Managed Land in The Eu25
- (%, 000 and Thousand Hectares), 2005
- Market Values
- 7. Pest Analysis
Political Factors
Economic Factors
Social and Environmental Factors
Technological Factors
- Contents Organic Food & Drink
- Key Note Ltd 2008
- 8. Consumer Dynamics
Overview
- Table 20: Summary of Levels of Agreement with Survey Statements regarding
- Organic Foods and Drinks (% of Respondents), February 2008
Tendency to Purchase Organic Foods or Drinks
- Those Who Sometimes Buy Organic Foods or Drinks
- Those Who Nearly Always Buy Organic Foods and Drinks
- Table 21: Those Who Sometimes Buy, and Those Who Nearly Always Buy,
- Organic Foods or Drinks (% of Respondents), February 2008
- Those Who Hardly Ever Buy Organic Foods or Drinks
- Table 22: Those Who Hardly Ever Buy Organic Foods or Drinks
- (% of Respondents), February 2008
Source of Purchase
- Farm Shops or Farmers Markets
- Box Schemes
- Table 23: Purchasing of Organic Produce from Farm Shops/Farmers Markets
- and through Box Schemes (% of Respondents), February 2008
Health Benefits
- Belief That Organic Products Are Healthier than NonOrganic Products
- Table 24: Belief That Organic Products Are Healthier than NonOrganic Products
- (% of Respondents), February 2008
Pricing
- Opinion That Organic Products Are Expensive
- Demand for Cheaper Organic Produce
- Table 25: Opinion That Organic Products Are Expensive, and Demand
- for Cheaper Organic Produce (% of Respondents), February 2008
Environmental and Ethical Concerns
- The Use of Pesticides in Food Production
- The Treatment of Animals in Farming
- Table 26: Concerns about The Use of Pesticides and The Treatment of Animals
- (% of Respondents), February 2008
- Belief That Organic Farming and Growing Methods Are Better for The Environment
- Table 27: Belief That Organic Farming and Growing Methods Are Better
- for The Environment (% of Respondents), February 2008
Distrust of organic Labelling
- Concern That Produce Described as organic May Not Be
- Table 28: Concern That Produce Described as organic May Not Be
- (% of Respondents), February 2008
The Role of The Government
- Opinion That The Government Should Do More to Support Organic Farmers and Growers
- Table 29: Opinion That The Government Should Do More to Support Organic
- Farmers and Growers (% of Respondents), February 2008
9. Company Profiles
Introduction
Producers, Processors, Manufacturers
and Suppliers
- Alara Wholefoods Ltd
- Alvis Brothers Ltd
- Table 30: Financial Results for Alvis Brothers Ltd (g000),
- Years Ending 31st March 20052007
- Arla Foods UK Plc
- Table 31: Financial Results for Arla Foods Ltd (g000), Years Ending
- 30th September 2005 and 2006, and 65 Weeks Ending 31st December 2007
- Cafedirect Plc
- Table 32: Financial Results for Cafedirect Plc (g000),
- Years Ending 30th September 20052007
- Clipper Teas Ltd
- Table 33: Financial Results for Clipper Teas Ltd (g000),
- Years Ending 30th June 20052007
- Deans Foods Ltd/Noble Foods Ltd
- Table 34: Financial Results for Deans Foods Ltd (g000),
- Years Ending 30th September 20042006
- Doves Farm Foods Ltd
- Table 35: Financial Results for Doves Farm Foods Ltd (g000),
- Years Ending 30th June 20052007
- Duchy Originals Ltd
- Table 36: Financial Results for Duchy Originals Ltd (g000),
- Years Ending 31st March 20052007
- Eastbrook Farm Organic Meats Ltd
- Table 37: Financial Results for Eastbrook Farm Organic Meats Ltd (g000),
- Years Ending 31st March 20042006
- Graig Farm Organics
- Green & Blacks Ltd
- Table 38: Financial Results for Green & Blacks Ltd (g000), Year Ending
- 28th February 2005, 44 Weeks Ending 31st December 2005
- and Year Ending 31st December 2006
- Hj Heinz Company Ltd
- Table 39: Financial Results for Hj Heinz Company Ltd (g000), Years Ending
- 30th April 2004 and 27th April 2005, and 53 Weeks Ending 3rd May 2006
- High Weald Dairy
- Hipp Organic (Hipp UK Ltd)
- Table 40: Financial Results for Hipp UK Ltd (g000),
- Years Ending 31st December 2004 and 2005
- W Jordan (Cereals) Ltd
- Table 41: Financial Results for W Jordan (Cereals) Ltd (g000),
- Years Ending 28th February 20052007
- Contents Organic Food & Drink
- Key Note Ltd 2008
- Kallo Foods Ltd
- Table 42: Financial Results for Kallo Foods Ltd (g000),
- Years Ending 31st December 20042006
- Langmead Farms Ltd
- Table 43: Financial Results for Langmead Farms Ltd (g000),
- Years Ending 31st December 20042006
- Omsco
- Table 44: Financial Results for Organic Milk Suppliers CoOperative Ltd (g000),
- Years Ending 31st March 20052007
- Organic Farm Foods Ltd
- Table 45: Financial Results for Organic Farm Foods Ltd (g000),
- Years Ending 31st March 20052007
- Organix Brands Ltd
- Table 46: Financial Results for Organix Brands Ltd (g000),
- Years Ending 30th June 20052007
- Pertwood Organic Farm (Lower Pertwood Organic Farm Ltd/
- The Pertwood Organic Cereals Company Ltd)
- Table 47: Financial Results for Lower Pertwood Organic Farm Ltd (g000),
- Years Ending 31st December 20042006
- Table 48: Financial Results for The Pertwood Organic Cereals Company Ltd (g000),
- Years Ending 31st December 20042006
- Rachels Organic Dairy (Rachels Dairy Ltd)
- Table 49: Financial Results for Rachels Dairy Ltd (g000),
- Years Ending 31st December 20042006
- Riverford Organic Vegetables Ltd
- Table 50: Financial Results for Riverford Organic Vegetables Ltd (g000),
- Years Ending 30th April 20052007
- Rocombe Organic
- Sedlescombe Organic Vineyard
- Seeds of Change
- September Organic Dairy Ltd
- Simply Organic Ltd
- Swaddles Organic
- R Twining and Company Ltd/Jacksons of Piccadilly Ltd
- Table 51: Financial Results for R Twining and Company Ltd (g000),
- Years Ending 17th September 2005, 16th September 2006 and 15th September 2007
- The Village Bakery (Melmerby) Ltd
- The Welsh Hook Meat Centre Ltd
- Table 52: Financial Results for The Welsh Hook Meat Centre Ltd (g000),
- Years Ending 31st January 2006 and 2007
- The Yeo Valley Organic Company Ltd
- Table 53: Financial Results for Yeo Valley Farms (Production) Ltd (g000),
- Years Ending 29th May 2005 and 28th May 2006, and 53 Weeks Ending 3rd June 2007
- Retailers Own Labels
10. The Future
Market Forecasts
- Table 54: The Forecast UK Market for Organic Foods and Drinks by Sector
- by Retail Value at Current Prices (gm at Rsp and %), Years Ending December 20082012
- Figure 3: The Forecast UK Market for Organic Foods and Drinks by Sector
- by Retail Value at Current Prices (gm at Rsp), Years Ending December 20082012
- 11. Further Sources
- Associations
- Publications
- General Sources
- Government Sources and Main Certifying Bodies
- Major Producers, Processors, Manufacturers and Suppliers
- Other Sources
- Bisnode Sources
- Key Note Research