Oliver Moore: Organic veg bucks loss leader trend

Organic is back in growth. The organic market is now worth €110m, up 9% and €9m since this time last year. 
Oliver Moore: Organic veg bucks loss leader trend

That’s according to Cliona Lynch of Kantar, who presented her findings at last week’s Bord Bia organic seminar in Athlone.

Lynch’s other key take home messages were:

Organic product shopper numbers are up, and those shoppers are making more trips and buying more items. The top five growth categories for organic are veg, fruit, cereals, cooking oils and bread.

The organic shopper is weaker with families. SuperValu is the new No.1 retailer for organics but Dunnes and Aldi are leading market growth.

According to Lynch, the boom times are back and with it the discerning consumer . This consumer is concerned once again about all manner of issues, from obesity to fair trade.

And organic shoppers seem especially concerned: they are more likely than others to seek out Irish, local, fair and healthy products, the research suggests.

Growth was flat for the last five years, so this jump of 9% is significant. Growth is across the board - driven by more shoppers making more trips and picking up more packs on each trip.

However, they are paying less per pack (or item) – a significant 5.3% less.

Along with the top five products outlined above, the next five (i.e. from 5th to 10th) are eggs, honey, fish, biscuits and milk.

In the market leading vegetable sector, carrots, potatoes, onions, tomatoes and broccoli are the most frequently purchased.

The specifics of retailers and their relative performance may not interest a farming readership especially, but it is worth noting the growth of Supervalu.

Once far behind in third behind Dunnes Stores and Tescos, this retailer has really turned things around.

This holds too for organic, where it is now the top for the value of organic sold through it – though Tesco is top for volume.

To some extent, this means that there is less of a cost-price squeeze in Supervalu. Also their strategy of developing food brands from indigenous companies offers a route to market for Irish organic brands too.

While there are, as the phrase goes, reasons to be cheerful, from a farming perspective, what does it all mean?

It’s certainly good news that organic veg is back. In a context defined by 49c options in the discounters, and now elsewhere, for organic veg to be doing well once again is noteworthy.

However, organic meat and milk sales in Ireland do not seem to be growing significantly.

The notion that families are buying less needs probing. In fact, family is divided into three categories, whereas empty nesters - people at the age whereby children have left home - is just one category.

That people are living longer is making this empty nester category very big and broad indeed.

Guess what? The best performing category of family is 45+ or, very close to the same age as empty nesters. Also, people are starting families later anyway.

It is perhaps more the case that the true divide is simply old vs young, or, youngish. People in their later 20s and early 30s are still being hit far harder by the recession and austerity, with precarious jobs, no pensions, no public sector protections and of course massive Celtic Tiger era mortgages.

In this context, it’s no wonder people in their late 20s and early 30s, who have the added financial burden of young children, are not buying organic food as much as the retired teachers who taught them.

Nevertheless, there is certainly some good news for organic producers in these figures, especially for those growing veg.

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