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According to Organic Food and Drink, a new Market Assessment published by marketing intelligence provider Key Note, the UK organic food and drink market continued to decline in 2011, after falling by 3.4% to £1.65bn in terms of value at retail selling prices (rsp). This follows 2 years of decline, with the market having suffered heavily in recent years from continued economic instability, which has resulted in many consumers reining in their spending and opting for cheaper, conventionally-farmed produce instead of more expensive organic goods. A lack of Government investment, as well as reduced shelf space in supermarkets and a lack of own-brand product development, are also contributing factors to the recent decline in the market.
However, the performance of the organic food and drink market in the UK is significantly different to that of the global market, which increased by 9.2% in 2010 to reach $59.1bn; up from $54.1bn in 2009, with a further increase expected to be reported for 2011, according to figures from the International Federation of Organic Movements (IFOAM). This growth has primarily been driven by strong growth in the US, Germany and France, while the People's Republic of China (PRC) has witnessed sales of organic products quadruple over the past 5 years; an annual growth rate of 40% was also reported for the Brazilian market, according to Organics Brasil. Further industry indicators suggest that all other European markets, aside from the UK, are set to see double-digit growth in 2012, partly due to a more favourable attitude towards organic products, as well as better Government support and retail investment. The UK's decline has primarily been put down to the lack of Government investment that organic farmers receive, as well as the abolition of the Advisory Committee of Organic Standards, along with England's Organic Action Plan in 2010, which sought to boost the market in the UK, as well as help promote the benefits of organic farming and organic products.
Despite this, recent market figures have suggested that the market stabilised somewhat towards the end of 2011, despite continued economic uncertainty. This, coupled with further investment in marketing campaigns promoting organic products in the UK, and the new EU/US trade agreement regarding organic produce, should help to boost the market over the next 5 years. As such, Key Note estimates that the organic food and drink market will experience relatively steady growth between 2012 and 2016, rising by 11.8% from £1.66bn to £1.86bn.
Press enquiries: Jack Sykes at Key Note at email@example.com or 0845 504 0452. Press/review copies of the report are available on request.