Opportunities for organics as market returns to growth

Opportunities for organics as market returns to growth

Lauren We
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Lauren Webb, client executive at Kantar Worldpanel UK, gives Produce Business UK readers an exclusive insight into the workings of the organic fruit and vegetable retail market in the UK over the last 12 months, highlighting the opportunity to attract more shoppers to the growing category

View the full presentation here

If we look back over the past five years, the organic produce retail market in the UK has fluctuated over time. However, in the latest 12 weeks ended February 28, 2016 sales value and volume have reached their highest levels in the last half-decade.

This peak has been achieved following overall strong growth throughout 2015. Organic produce has far outperformed the non-organic market in both value and volume terms on a consistent basis and has made a statement of intent following a disappointing performance in 2014 for produce sales overall.

Spend = £213m
Penetration = 57.1%
Frequency = 6.4 trips
Volume per trip = 0.9kg

What’s the growth pattern?

If we concentrate on the latest 12 months, the organic produce market is now worth £213 million, having grown by 15.6% in sales value, compared with the year earlier.

The market has seen slight price deflation – a theme we have witnessed across most produce categories. However, volume growth has far outweighed this.

The market has been driven by the 57.1% of households who have bought organic produce, as these shoppers have bought more per trip and returned to the fixture more often.

Is there potential for more?

There is still an opportunity to attract more shoppers to the organic market market. This point is significant when looking at the type of shoppers that have driven growth. Repeat shoppers who are engaged with organic produce have been key to sales, which is great for the category.

Nevertheless, there has been little growth from new shoppers in the last year, which could be an important group in order for this growth to continue. Over the past year the market has predominantly benefitted from existing shoppers spending more than they did the previous year, as well as shoppers switching spend from non-organic to organic produce.

Who are organic produce shoppers?

They are more likely to be from older, affluent two- to four-member households, with a strong over index in London. They are a very valuable shopper; spending £302 a year on produce, which is £122 more than the non-organic produce shopper.

More affluent
55+ years old
2-4 person households
London

This reflects their outlook on life. Some 76.7% of organic produce shoppers agree with the statement: ‘I try to lead a healthy lifestyle’, while almost 40% claim to not work to a ‘strict budget’. Ingredients also appear to be key to their lifestyle, with 62% considering themselves ‘a good cook’.

Which are the best selling and performing items?

Staple produce items like bananas, carrots, apples, tomatoes and berries are the best-selling organic produce items – all seeing strong growth. Bananas are the overall leader, worth some £29m in sales value.

Bananas
Carrots
Apples
Tomatoes
Berries

Out of the top 10 largest organic products, broccoli saw the strongest growth of 35.9% during the last year, while mushrooms were the only type to see a decline (-7.6%).

The best-performing organic produce items (over £1m) follow the ‘health’ food theme, which has dominated the total market, with kale and avocados making up the top two, followed by lemons, oranges and dates. 

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