UK’s organic food industry seeks European-style growth
The terms “organic” and “sustainable” are now prominent on the menus of fashionable restaurants and food shops in the UK, even though a few decades ago they were hardly used. Yet organic products are still a small fraction of the overall food market, and regular buyers remain largely an affluent few.
Guy Singh-Watson, the founder of one of the UK’s largest organic vegetable box delivery companies, hopes this will change. “I just hate the fact that the food choices we make have become defining of status and class,” he says.
Mr Singh-Watson started selling organic vegetable boxes directly to the public from his family farm in Devon, south-west England, in the 1980s. At that time, organic farmers were mainly “freaks on the fringes,” he recalls, and the term sustainability was hardly used.
Riverford is one of Britain’s best-known organic delivery box services. It turned over almost £60m in 2018, selling around 50,000 vegetable boxes a week, according to the company. The business attributes a 36 per cent rise in sales since 2013 to consumers’ increased willingness to pay for sustainable and seasonable products — particularly when combined with the convenience of home delivery.
Despite the success of companies such as Riverford, Mr Singh-Watson feels that the organic industry has yet to become “really mainstream” in the UK. Last year organic products made up 1.5 per cent of total food and drink sales and the market was valued at £2.2bn, according to the Soil Association, a UK food and farming charity.
One limit to the consumer appeal of organic products is that they tend to be more expensive. Mr Singh-Watson estimates that an average box of organic vegetables retails for about 30 per cent more than a supermarket equivalent of non-organic produce.
For certain products, such as chicken and pork, the retail price can be almost double because of the high cost of organic grain, he says.
“You have got to expect to pay more,” Mr Singh-Watson says. “As anyone would, certainly in northern Europe. You are paying for it being grown on a small scale, for the reduced environmental impact — [and] for loads of external costs which are not considered in our simplistic, neoliberal way of looking at the world.”
Many British consumers are unwilling to do so, however. Most of Riverford’s customers are wealthy and well-educated — “an astonishing number” have second degrees — although some also come from lower income backgrounds, the company says.
Some 72 per cent of UK shoppers say organic products are too expensive, according to a Kantar Worldpanel survey published in November. Also, most consumers of organic foods are light buyers, the survey found: 81 per cent spend less than £40 per year on the category.
Elsewhere in Europe, organic foods are more entrenched and have more support from consumers and governments, says Clare McDermott, business development director for the Soil Association’s certification arm.
She cites Amsterdam, where the city government serves organic food across some public sector canteens, and Denmark, which has policies to try to give lower income groups access to sustainable food.
“In the UK, particularly [after the recession], organic was perceived as something that was niche and nice to have,” says Ms McDermott. “A food for affluent people, rather than [being] something about best agricultural practice and improving the food we eat.”
Organic food as a proportion of total food sales in France is at least three times greater than in the UK; in Denmark the ratio is more than six times.
“We are probably the least supported [organic food market] in Europe,” says Mr Singh-Watson.
But that may be starting to change. In November, the London borough of Tower Hamlets announced it would serve healthier free school meals, of which 15 per cent of ingredients will be organic. Organic products are also increasingly present in more affordable mainstream grocery chains including Morrisons, Asda and the Co-Op.
After a downturn caused by the financial crisis of 2008, organic food is experiencing its sixth consecutive year of growth in the UK. Supermarket sales of organic food and drink rose by 4 per cent this year, according to the Soil Association. At the same time, however, frozen organic products were down 11 per cent and household products down 48 per cent, according to Kantar.
If consumers continue to buy more organically produced food, it will be good news for Riverford and other fresh organics delivery companies. Mr Singh-Watson is confident that more people will join the cause and that Britain can expand its organic market like other European countries — even if there is an eventual limit to the industry’s potential growth. Soil Association Certification hopes that organic food will become 10 per cent of the market — around the same ratio as in Denmark today.
“You don’t get the whole market all at once,” says John Ikerd, professor emeritus of agricultural economics at the University of Missouri in the US. “When markets change you have somebody who wants something different and is willing to pay a premium price for it — and, as that market grows, the prices go down.”