|Title:||United Kingdom retail sales of organic foods by branded and private-label products in pounds sterling and percent change for the year to May 13, 2012|
Start of full article - but without data
Organic: XX w/e XX May 2012 BRANDS OWNLABEL TOTAL [pounds y-o-y% [pounds y-o-y% [pounds sterling]m sterling]m sterling]m
Fresh & XXX.X -X.X XXX.X -XX.X XXX.X chilled
Ambient XXX.X X.X XX.X -XX.X XXX.X grocery
Alcohol XX.X -XX.X X.X -XX.X XX.X
Frozen X.X X.X X.X -XX.X X.X
TOTAL XXX.X -X.X XXX.X -XX.X XXX.X
Fresh & -X.X chilled
Ambient -X.X grocery
Oh what a cruel irony that even organic growth seems to be a fanciful aspiration for the organic category these days. One of the biggest recession casualties, its sales have been falling since 2008 and show no signs of bottoming out--at least as long as the downturn continues. Indeed, they have slumped X% to EXXX.Xm over the past year, an even steeper decline than they experienced in 2011 [Kantar Worldpanel XX w/e XX May 2012].
It's little wonder that more and more brands have moved away from proudly proclaiming their organic status to instead citing it as one of many attributes. Rachel's and Yeo Valley are just two of the big names to have lopped 'organic' from their names over the past few years and in a few weeks Tideford Organics will also be pared back to plain old Tideford.
These brands have not stopped being organic. Nor are they trying to hide the fact that they are. It's simply that organic doesn't resonate with consumers as much as it once did, or as much as other claims do. But are the brands' attempts to play down their organic credentials really the way to restore the category to growth? That shoppers find organic a confusing concept is well-established; that the sector appears to be in long-term decline, even more so, although some experts are hopeful that an upturn in the economy will also signal an upturn in its fortunes.
Right now, the reality is that with a few notable exceptions such as babyfood, most shoppers aren't prepared to pay a premium for organic. It doesn't help that although some suppliers have tried to close the price gap with promotions (a factor that has enabled organic fruit to hold its own, according to the Soil Association), many are struggling to keep prices down.
"Organic products need to be competitive and this is very difficult to achieve when the cost of raw materials has in many cases doubled in the last couple of years," says Pev Manners, MD of Lincolnshire-based Belvoir Fruit Farms, which makes organic cordials and presses. "The organic message can seem less attractive to the hard-pressed consumer." Indeed, in an exclusive survey of iXo consumers carried out for The Grocer by MMR Research Worldwide, only XX% agreed it was worth paying more for organic. Many simply don't see the benefits, says MMR, noting that consumers rate 'organic' as less important than XX other credentials, including 'healthy', 'high in vitamins', Fairtrade, 'free range', 'locally produced', and-speakng volumes about the lack of clarity in the organic message--'natural' and 'free from pesticides'.
"There are lots of ways of communicating organic. It's confusing for shoppers to understand because there are so many messages," says Cranks Bread marketing manager Karen Wilson. "Organic seems to have lost its way with shoppers. It has lost focus."
Yet it is not focus, arguably, that the category needs at the moment, especially not on an attribute associated in many consumer minds with higher prices. The reason more brands are emphasising multiple benefits is not just to give consumers a more compelling reason to splash the cash, but also to play down the premium message.
"Brands are not moving away from organic, they are building values into their brands rather than relying on organic to be the only value," says a Soil Association spokeswoman.
In the current economic climate, "being organic isn't enough," agrees MMR research director Luisa Robertson. "Brands that don't capitalise on the overarching benefits risk losing out."
Fortunately, there are plenty of benefits to emphasise, says Ian Jalland, founder of organic Leicestershire farm shop Brockleby's. "Organic products should all have a good story behind them," he says. "Provenance, origin, animal husbandry and how the food is made are all important."
It's about presenting a more holistic picture of what organic means, adds Nick Barnard, co-founder of cereal company Rude Health. "Organic is one aspect of the final product," he says. "When we select ingredients we look beyond organic to the farm, the source, the complete picture."
Of course, brands can change their messaging without necessarily undermining their brand identities. For own-label it's not so easy. Play down or remove the word 'organic' and what's to differentiate Asda Organics or Sainsbury's SO Organic from standard own-label ranges?
That's why, as brands focus marketing on other messages--think Yeo Valley's boy band pushing its West Country roots, or Graham's The Family Dairy's decision to refresh its pack design in June to emphasise quality and provenance--the mults are keeping the focus on organic.
Take Sainsbury's, for instance, which is gearing up to support the Soil Association's Organic September campaign. The Organic Trade Board's 'Organic. Naturally different' message--a change of tack from last year's 'Why I love organic'--will be highlighted on a new hub on Sainsbury's website and through instore activity. "We will be promoting across key categories and featuring recipes, foodie tips and more," says Lisa Preece, Sainsbury's assistant SO Organic brand manager.
Consumers do understand the benefits of organic in many sectors, she insists. "It's been a good year so far for organic meat, fish and poultry and fresh produce, highlighting Sainsbury's strengths of quality and taste. Both sub-categories also lend themselves well to consumers' top reasons for buying organic, including high animal welfare and sustainable farming methods."
But some industry insiders say the very fact that organic own-label ranges exist muddies the waters. "Consumers tend to be sceptical of own-label organic brands," claims Lynette Sinclair, MD of Tideford Organic Foods. "Psychologically there is a mismatch within big company offerings. Customers prefer to align themselves to smaller brands, which they feel share their concerns."
It is perhaps no coincidence that own label, which makes up XX% of the market's value, is being hit harder than the brands. Across the organic category, own-label sales are down XX.X% year-on-year [Kantar Worldpanel], making branded sales (down just X.X%) look relatively healthy. Indeed, two areas of branded are actually in growth--ambient groceries, up X.X%, and frozen, up X.X%. For own label, both are in decline.
Across both brands and own label, however, there is one category where organic credentials seem to give suppliers a massive edge: babyfood. MMR's research indicates that XX% of consumers with children in their households look for organic products while shopping--markedly higher than the XX% of those who do not have children. "In baby, organic is an expectation," says Anna Rosier, MD of Organix and chairwoman of the Organic Trade Board.
With Organix, the clue's in the name--but not all organic babyfood brands focus on organic credentials ahead of other values. "Organic is just one piece of the picture," says Paul Lindley, founder of Ella's Kitchen. "Our recipes, packaging format, refusal to add refined sugar, fillers or concentrates sets our products apart. This delivers trust."
To this end, Ella's Kitchen rolled out its 'Good in every sense' strapline last year, and backed it up in November by enlisting former S Club X singer and celebrity mum Rachel Stevens to record five 'Tasty Tunes' encouraging kids to eat their greens.
Organix, too, has been investing in marketing. It rolled out its first TV ad last year, and introduced a second in April 2012. "The TV campaign has allowed us to build our awareness, combined with press, online and social media, and build a strong presence in-store to support the growth of our brand," says Rosier.
The brands have also been pushing the NPD envelope. Andrew Curzon, marketing manager for dairy producer Rachel's, attributes the company's recent success--value sales are up XX.X% to EXX.Xm [SymphonyIRI XX w/e XX June 2012] -to its focus on innovation. It rolled out a range of three fat-free big pots in April, and introduced a 'double face' to all its big pots in July (see pXX). "This has increased our branded presence by XoX/X", he claims.
Other pieces of notable NPD include: Fairtrade brand Biofair's new red quinoa line, Pinhill's organic muesli mix and Plum's range of world cuisine-inspired baby meals, all launched in June; Belvoir Fruit Farms' five new cordials, inspired by classic British drinks, launched in February; and Organix's veg and oat snack bars, launched under its Goodies brand in January. Not to be outdone, Ella's Kitchen moved into chilled desserts for the first time in May, and was first to market with a range of dry cereals in 'spouches'--pouches with a spout--in July. "Our use of innovative packaging certainly helps account for sales," says Lindley.
Tideford, meanwhile, will accompany its September relaunch with the introduction of six chilled soups, plus microwavable porridge pots in vanilla and cinnamon variants.
With so much NPD going on from the brands, it is no surprise that the Soil Association believes things are looking up for organic. "The decline has slowed significantly during the last two years versus the previous two," says a spokeswoman. "We do not expect any further sharp declines."
Time will tell. But if organic growth does return, it could, ironically, be at the expense of. the 'o' word itself.
* In the past year, the UK organic market has declined in value by X%. This is an improvement on the longer-term trend, although it is a steeper fall than last year's X.X%.
* The decline in fresh & chilled, the largest part of the market, has been driven primarily by dairy and fresh produce, both of which have fallen by X%. All key organic markets have declined somewhat, however, pointing to a wider issue than marketspecific problems.
* Simply put, shoppers are buying organic less often than before. Low consumer confidence and relatively high inflation has put pressure on consumers and we have seen shoppers trade down to cheaper products across grocery.
Stephen Lavery, Kantar Worldpanel
TAKE HOME SHARE
Organic: XX w/e XX May 2012 BRANDS OWNLABEL TOTAL ...