Organic market sees strong growth in indies despite challenging conditions
In a year in which FCMG businesses had to deal with the impact of the pandemic, Brexit, supply chain issues and labour shortages, the organic market continued to grow, with the market breaching the £3bn mark in the UK.
In its tenth consecutive year of growth, the organic market grew nearly four times as much in independents than in supermarkets between 2020 and 2021, according to research by Soil Association Certification.
In the group’s Organic Market Report 2022, it announced that sales of organic products in independents grew 9% (£36.9m) during 2021, from a total market of £409.8m in 2020 to £446.7m.
Meanwhile, in the multiples, sales of organic goods grew 2.4%, while the overall organic market in the UK grew 5.2%.
The report also revealed that the pandemic had varied effects on sales of organic products in independent retail.
“Sales in some city-centre retailers have been negatively affected by more people working from home,” said Soil Association Certification business development director Clare McDermott.
However, reduced visits to restaurants during the pandemic led to increased sales of organic wine in independent retail – particularly Malbecs and Proseccos.
Independent retailers who responded to the Soil Association Certification’s survey reported that sales of fresh and chilled organic products – including fruit & veg, dairy, eggs and meat – saw the strongest growth. This is reflected in the overall report as the only product category that saw sales shrink was ambient grocery.
Confirming this trend, wholesaler Cotswold Fayre has seen increased interest in organic products, particularly in chilled.
Ellie Gunn, chilled buyer at Cotswold Fayre said: “We have increased the number of organic chilled lines that we offer by almost 10%.”
Anecdotally, retailers reported that these trends were driven by “younger customers coming into independent stores looking for organic options because they want to eat healthily,” said the report.
The report also stated that the predominant reasons for consumers choosing to buy organic are health and environmental concerns.
The growth of this consumer group is behind independent retailers’ prediction that the sector will continue to grow in their stores by 6% in 2022, as reported by Soil Association Certification.
However, retailers are concerned about availability of organic products, supply chains and the effect inflation may have on sales, said the report.