UK retailers Tesco, Sainsbury, Waitrose, Asda, Morrisons, Co-operative and Marks & Spencers saw their collective organic sales drop by 3.8 percent last year, according to a report that found the number of UK organic producers and processors fell 4.9 percent in 2012 to 6,929.
The 2013 Organic Market report, produced by the Soil Association, said UK producers are struggling in the face of high feed and fuel costs, faltering consumer demand, unfavorable weather conditions, uncertainties over Europe’s common agricultural policy (CAP) reform and reduced support from major retailers and policymakers.
Producers’ confidence also weakened, a sign that more organic farmers will leave the sector. The latest producer survey found a fifth of Welsh organic farmers intend to leave the sector in the next 12 months and more than two-thirds are considering shifting to non-organic production within five years, according to the Organic Market report.
On the consumer side, the UK market for organic-certified products contracted 1.5 percent last year to £1.64 billion ($2.49) as the economic recession dampened demand, the report said.
There are signs of growth in the organic market this year, largely due to an increased commitment among young shoppers, a rise in online sales, an increase in non-food organic products and catering. Three leading organic home-delivery specialists, Ocado, Abel & Cole and Riverford, increased their combined sales by 10.3 percent in 2012.
While some major retailers reduced their organic products, independent retailers increased sales 0.7 percent, a development that could help balance out the market and boost confidence among producers and processors.
A separate survey of 1,003 consumers released earlier this month found non-genetically modified and sustainable “farm to table” products that can be traced back to local and regional farmers and producers have become more desirable. The 2013 MamboTrack Annual Natural and Organic Product Survey found shoppers are increasing their spending on organic foods and emphasizing the traceability of the foods they buy, to non-GMO, local/regional and fair trade sources. Third-party certifications and heightened media coverage are helping to drive interest in sustainable meat, poultry and seafood.