Good news for retailers - organic food sales in Europe have held up in the recession, and consumers do not seem to be put off by premium prices. North American retailers can take a cue from Europe as part of an optimistic entrance into 2010.
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By Guy Montague-Jones, 22-Dec-2009
Organic food sales in much of Europe have held up in the recession, bucking fears that the price premium would put off consumers, according to Organic Monitor.
Looking back at 2009, Amarjit Sahota, director of consultancy and research firm Organic Monitor, estimated overall growth in Europe was between 2 and 6 per cent. This is a drop from the double-digit growth rates of previous years but it is still unusually strong for a premium priced category.
Within Europe there were significant differences between countries. Sahota said growth rates varied according to the severity of the recession and the attitude of retailers.
UK and Spain
Organic sales were worst hit in the UK and Spain - countries which were both badly affected by the recession. Consumers traded down from premium organics to ordinary products, and switched allegiance to cheaper retailers where organics have a weaker presence.
But Sahota said retailer expectation that this would happen was perhaps just as important, if not more so, than an actual easing of consumer demand.
When the financial crisis erupted in autumn last year, UK retailers quickly reduced lines of organic foods in anticipation of a drop off in consumer demand. Sahota said this contributed to a significant reduction in sales figures between August and March, but that since then, the market has stabalised.
He added that growth was returning in some sectors, prompting retailers to admit to acting hastily when they cut back on organic orders at the tail end of last year.
Positive European growth
Meanwhile, in other countries organic food sales have continued to increase. Sahota said signs are that Italy, Germany and France all posted positive growth in 2009.
And in Sweden and Denmark, Organic Monitor said double-digit growth is expected for 2009 thanks to greater economic resistance to the recession and a more steadfast attitude from retailers.
Research from Organic Monitor suggests global organic food sales are now expected to top $50bn in 2009 - about $10m above 2007 levels.
Sahota said there has been no loss of interest in organics over the past year and that the market is set for full recovery in 2010.
Source: Dairy Reporter USA
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