Organics - UK

Published by: Mintel International Group Ltd.

Published: Nov. 1, 2007

Table of Contents

Issues in the Market

Definition

Four key points:

Market in Brief

Consumer trends boost market growth

Supply fails to meet demand

Dairy provides organic model

Box schemes flourish

The ethical organic consumer - competitive or complementary?

Health claims to drive consumer take-up

Internal Market Environment

Key points

Paying the price of organic food

Figure 1: Agreement with selected lifestyle statements, 2003-07

Health and food labelling

Figure 2: Agreement with selected lifestyle statements, 2003-07

Premiumisation

Figure 3: Agreement with selected lifestyle statements, 2003-07

Provenance is prized…

…as is the environment

The media, food production and food scares

Supply issues

Organic conversion

Figure 4: UK land under conversion vs fully organic land, 2005 and 2006

Shortage of British producers

Broader Market Environment

Key points

Demographic changes

AB socio-economic status is growing but more slowly

Figure 5: Changes in socio-economic status, 2002-07 and 2007-12

Population age

Figure 6: Changes in the UK demographic profile, by age, 2002-07 and 2007-12

Organic - scientifically healthy or a lifestyle choice

Organic Brussels

Competitive Context

Key points

Shopping is the new politics

Figure 7: UK retail sales of ethical foods, 2002-06

Ethical dilemma

When two become one?

Local sourcing preferred

Too much chicken choice

Healthy competition

Figure 8: UK growth rates of healthy foods, 2002-06

Strengths and Weaknesses in the Market

Strengths

Weaknesses

Market Value and Forecast

Key points

Booming organic growth

Figure 9: UK retail value sales of organic food, 2002-07

Availability drives growth

The future

Good growing conditions

Capitalising on food trends

But what about the economy?

The science of organics

Opportunities for land conversion

Continued strong growth set to take market value pass £2 billion in 2011

Figure 10: UK sales of organic food, 2002-12

Greater switch over from conventional foods into organics

Factors used in the forecast

Segment Performance and Forecast

Key points

Market breakdown

Figure 11: UK retail sales of organic food, by type and value, 2003-07

Fruit and vegetables

Figure 12: UK retail sales of organic fruit and vegetables, by value, 2002-07

Outpacing conventional market growth

Prepacked dominates

Figure 13: UK retail sales of organic fruit and vegetables, by type and value, 2003-07

Fruit buoyant

Green light for vegetables

Healthy potential

Organic dairy products

Figure 14: UK retail sales of organic dairy products, by value, 2002-07

Dairy doubles

Figure 15: UK retail sales of organic dairy products, by type and value, 2003-07

Dairy desserts and yogurts

Milk

Cheese

Butter, cream and ice cream

Brands are key to future growth

Prepared foods and groceries

Figure 16: UK retail sales of organic prepared foods and groceries, by value, 2002-07

Prepared to grow

Figure 17: Segmentation of organic prepared foods and groceries market, by value, 2007

Ambient groceries

Chilled food eg ready meals

Frozen foods

Chocolate

Meat and poultry

Figure 18: UK retail sales of organic meat and poultry, by value, 2002-07

Organic meats represent quality

Premium choice

Demand outstrips supply

Figure 19: UK retail sales of organic meat and poultry, by type and value, 2003-07

Beef

Pork

Poultry

Lamb

Cooked/processed meats and meat products

Fish

Organic bread and cereals

Figure 20: UK retail sales of organic breads and cereals, by value, 2002-07

Breads

Cereals

Baby food and infant formula

Figure 21: UK retail sales of organic baby food and infant formula, by value, 2002-07

Baby foods get bigger

Eggs

Figure 22: UK retail sales of organic eggs, by value, 2002-07

Egg supply fragile

Segmented sector represents competition

Forecast

Continued strong growth set to take market value pass £2 billion in 2011

Figure 23: Forecast of UK retail value sales of organic food, at current prices from 2007-12

Figure 24: Forecast of UK Retail value sales of Organic food, at 2007 prices from 2007-12

Figure 25: Forecast of UK retail value sales of organic foods, in euros, 2007-12

Greater switch over from conventional foods into organics

Dairy and Meat & Poultry will be the fastest growing segments

Change of shares within the organics food market

Figure 26: Percentage share of segments within the UK organics food market, 2002-2012

Figure 27: Percentage share of segments within the UK organics food market

Factors used in the forecast

Product Positioning

Key points

Figure 28: Price positioning in specified food sectors, 2007

Organic and premium head to head

Companies and Products

Companies and brands

Fruit and vegetables

Geest (Bakkavör)

Organic Farm Foods

Riverford Organic Vegetables

Dairy products

OMSCo

Rachel’s Organic

Yeo Valley

Figure 29: Organic yogurt and fromage frais market share, 2006

Prepared foods

Duchy Originals

Green & Black’s

Kallo Foods

Meat and poultry

Bernard Matthews

Helen Browning Organics

Organic bread and cereals

Doves Farm

Jordans

Baby food and infant formula

HiPP

Figure 30: Organic baby food market, by brand, 2006

Organix

Eggs

Deans Foods

Others

Seeds of Change

Brand Communication and Promotion

Key points

Adspend is low

Figure 31: Main monitored media advertising expenditure on organic foods, 2003-07

Adspend grows

Few big spenders

Big brands dominate

Figure 32: Top organic spenders’ main monitored media advertising expenditure, 2006

Own-label relies on brand awareness

Channels to Market

Key points

Multiples lead the way

Figure 33: UK retail sales of organic food, by outlet and value, 2005-07

Retailers get into boxes

Retailer commitment

Figure 34: Summary of grocery retailer organic target/initiatives, October 2007

Box schemes

Independents

E-tailing

Consumer 1 - Who - Usage and Frequency?

Key points

Purchase of organic foods

Figure 35: Organic foods purchased in the last 12 months, 2007

Fruit and veg provide entry point

Women and ABs shop organically

North of the Watford Gap

Figure 36: Purchasing prevalence of any organic food, by gender, region and socio-economic group, September 2007

Convenience organics profile is not so distinct

Repertoire analysis - Who are the keenest organic consumers?

Figure 37: Repertoire of organic products bought, September 2007

Figure 38: Propensity to buy seven or more organic foods, by newspaper readership, household income and supermarket used, September 2007

Retailer commitment encourages purchase

Consumer 2 - Attitudes Towards Organic Foods

Key points

To buy or not to buy

Figure 39: Reasons for buying organic food, by number of organic products purchased, September 2007

Healthy reasons to buy

Collective ethics

Who buys for what reasons?

Older and younger consumers

Figure 40: Reasons for buying organic food, by specific age groups, September 2007

Competitive arena

Figure 41: Agreement with statements about organic vs non-organic food, by number of organic food groups purchased from, September 2007

Location, location, location

Over-55s go alternative

Figure 42: Agreement with statement ‘Where I buy my food from (eg farmers’ market, farm shop, local butcher/greengrocer) is more important than it being organic’, by age, socio-economic group and newspaper readership, September 2007

But what about fair trade?

Appendix

Internal market environment

Figure 51: Fully organic farmed land in the UK, 2006-07

Figure 52: Agreement with selected lifestyle statements, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel’s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car usage, 2007

Figure 53: Agreement with selected lifestyle statements, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel’s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car usage, 2007

Figure 54: Agreement with selected lifestyle statements, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel’s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car usage, 2007

Figure 55: Ever shop at a farmers’ market, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel’s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car usage, 2007

The consumer 1 - Who, usage and frequency?

Figure 56: Propensity to buy any organic food, by gender, age, region, socio-economic group, newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007

Figure 57: Organic foods purchased in the last 12 months, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007

Figure 58: Organic foods purchased in the last 12 months, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007

Figure 59: Organic food purchased in the last 12 months, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007

Repertoire of products bought

Figure 60: Number of different types of organic foods bought in the last 12 months, by gender, age, region, socio-economic group, daily newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007

The consumer 2 - attitudes and motivations

Figure 61: Attitudes towards organic foods, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007

Figure 62: Attitudes towards organic foods, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007

Competitive arena

Figure 63: Attitudes towards organic food, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007

The consumer 3 - reasons for not buying

Figure 64: Reasons for not purchasing organic food, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007

Figure 65: Reasons for not purchasing organic food, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007

Abstract

Since 2002, the UK market for organic food has grown by 70% to £1.5 billion in 2007. During this time, organic foods have become mainstream, aided by wider availability and growing consumer interest in premium and ethical food markets.

Indeed to some extent the organic market has become a victim of its own success, unable to supply demand for its products, although the Soil Association and retailers are working hard to address this.

In the mean time, other ethically positioned foods have arrived on the block and these also appeal to the organic consumer base - especially locally sourced foods. Nevertheless, health is the main attraction of organics and, armed with new scientific evidence to back its super nutrition claims, the organic food sector looks to be in extremely good health.

This report covers the UK retail market for organic food produced according to organic principles and standards. This includes fruit and vegetables, meat and poultry, dairy products, fish and seafood, eggs, prepared foods and groceries, cereal products, baby and toddler foods and infant formula. It includes organic foods that are fresh, frozen or ambient.

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