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Opportunities in organic as UK consumers buy local, online & ‘box schemes’

Despite its challenges, the Covid-19 pandemic has driven opportunity in UK organic food and drink, prompting more local and online purchases, including of ‘box schemes’ which often incorporate organic produce, according to UK organic certifier, the Soil Association.  

UK shoppers are now spending almost £60 million every week on organic food and drink – a sector which has consistently grown for 10 years, said Claire McDermott, business development director for Soil Association Certification.

Her comments in a recent blog post follow the recent publication of the UK Soil Association’s Organic Market Report 2022 – supported by Triodos – detailing the UK organic sector’s first ever break through the £3 billion mark in 2021.

The growth in 2021 was a 5.2% uplift year-on-year, up 23% in total since 2019 – a consistent two-year outperformance of the non-organic market as consumers increasingly prioritise health and the environment, she said.

The figures show the sector’s “exceptional resilience” in the face of Covid-19 and continued Brexit impact which has “left many businesses reeling” from disrupted supply chains and labour shortages, “especially for those that have seasonal peaks,” the Soil Association’s group CEO Helen Browning said in the report.

Organic offers the chance to ‘tell the story behind the product’

In fact, despite hurdles, the pandemic drove opportunity for organic food and drinks, McDermott pointed out, prompting big growth in local and online purchases.

This includes box schemes, for which sales increase 13% in 2021 to £558m, she said, adding that over one in four organic products are now sold online, with online shops now available for many organic brands.

“During the pandemic people started to shop in different ways, looking to their local producers and online shopping boomed. In the last year alone online and box schemes have seen sales increase by 13% to £558m but when you look at the growth since 2019 when sales were £362.9m it is massive 54% - in just two years.”

McDermott went on to say that a growth in online retail “affords organic the chance to show off a bit,” proving the space to display bigger ranges and “to tell the story behind the product by explaining where it’s come from and what care has been taken to create them”.

Although online commerce is growing for UK organic, the supermarkets still command 64% of the organic food market, however, McDermott said.

“Their sales increased by 2.4% in 2021 including home delivery and Sainsbury’s, Waitrose & Partners, Tesco and M&S really got behind organic giving increased space and marketing across the year as well as a big focus for Organic September; the key month for organic.”

Pandemic-driven sustainability and healthful consumer mindsets to continue

Both McDermott and the Soil Association’s group CEO, Helen Browning marked continued opportunities in the UK organic space now that it has broken the £3bn barrier, with food and other products becoming more readily available in tandem with continued consumer demand.

“It’s clear that organic has a key role to play in restoring the health of nature, people, and the planet – and shoppers really do seem to be realising that. We have a growing and committed core of customers who are increasingly prioritising sustainability and health, and as life returns to a more normal footing, sticking with those choices,” said McDermott.

“Health and the environment have really become embedded as long-term trends in people’s thinking – people want to know where their food is coming from, and they want guarantees that their choices will help restore nature and the climate.

“They want to know that they are spending their money in a manner that will not harm the planet and which will help wildlife to recover, will be good for the soil and kinder to animals across all aspects of their lives.”

Other opportunities in the field include large increases in the payments organic farmers receive from the UK government starting this year, McDermott said, as well as new financial incentives for practices that protect soils and wildlife, “which are at the heart of organic”.

Challenges: Rising costs, land shortages and climate target pressures

Nevertheless, both experts highlighted ongoing and incoming challenges for producers and processors in the organic space, including spiralling costs, land shortages, ongoing disruptions to supply chains and labour shortages, and continued pressure to meet climate targets.

“Rising costs are a concern for everyone both shoppers and businesses. But the more available that organic is, the more affordable and accessible it becomes to people. More websites, stores and supermarkets are increasing their ranges, which is a great sign,” said McDermott.

Numerous reports including the National Food Strategy, culminating in COP26, have also been laid out in the last year which add extra pressure to manufacturing and supply chains, said Browning, warning that – despite organic farmers and food producers being “ahead of the curve” – there is “absolutely no room for complacency”.

She warned that “big changes” are going to be required for all, and that organic producers and processors must continue to “lead the way”.

Innovation in farming: Regenerative agriculture, deferred grazing & no-till

Both experts called for continued innovation in farming and production techniques. Browning called out several ongoing promising schemes, including the implementation among many farmers of innovations such as deferred grazing, mob stocking – “which may lock carbon in our soils faster” – and living mulch/ pasture cropping systems emerging which avoid the need for ploughing in organic systems.

However, despite the promise of such regenerative techniques, “we do need to evidence what they can do in a UK context,” Browning warned.

“Then, we must make sure that all of our fabulous products show the positive impact they have on the environment, animal welfare and society. This needs to be clear for everyone, from retailers to consumers.”

Meanwhile, land conversion is not keeping pace with the fast growing organic sector, said Browning, meaning more ingredients are being imported. “We need UK manufacturers, especially of animal feed, to commit more wholeheartedly to UK first,” she urged.

McDermott also called on producers to ensure the widespread availability of organic food and drink despite “spiralling” prices. “The more available […] organic is, the more affordable and accessible it becomes to people,” she said.