Organic market to grow but to sustain greater focus needed on education
October 31, 2003,
Datamonitor.com/organic-research.com: The European
organic food and drink market will see impressive growth
over the next five years, predicts Datamonitor a market
analyst in a recent report. But the analysts warn the
high could be short lived without increased focus on consumer
The European natural food and drinks market, driven by
extremely strong growth in certain sectors, will surpass
the 20 billion Euro mark by 2007. In excess of 50% of
the natural market is accounted for by organic food, sales
of which are forecast to grow at an annual average rate
of 10.4% over the same period.
The organic food and drinks market in the UK is set to
grow by almost 75% between 2002 and 2007, when it will
be worth GBP1.6 billion. The UK is the second biggest
organic market in Europe but it is still a long way behind
Germany, where the market was worth GBP2.1 billion in
The number of loyal users of organic products in the UK
is set to grow from 2.4 million in 2002 to 11.4 million
in 2007. Organic meat is set to have the largest gains
and the market is predicted to more than double, from
GBP152 million in 2002 to GBP351 million in 2007. Organic
ready meals are forecast to grow at a compound annual
growth rate of almost 17% over the same period. Consumer
demand for better tasting and higher quality food and
drinks has also lead to steady growth in the UK fresh
foods market, which will grow to exceed GBP25 billion
between 2002 and 2007.
Loss of trust in the food industry has been a great growth
factor for organic and natural products. Consumers are
increasingly conscious about safety of foodstuffs, methods
of production and the ingredients used. The bulk of consumers
of organic products are mainly between the ages of 25
and 55, peaking between 36 and 45. Key life events, such
as childbirth, menopause, empty nesthood and senior lifestyles,
are also 'trigger points' for natural food adoption.
Research indicates that over 50% of consumers trust organic
and natural products more than conventional food and drinks.
This has contributed to the positive development of the
natural, and fresh, food and drink markets and provides
a rationale for marketers continuing their activities
in this area.
Although the UK organic market is showing impressive growth,
high prices are limiting demand. Price premiums associated
with organic food and drinks represent one of the most
important deterrents against buying organic foods, and
although consumers have an interest in foods produced
in an ecologically sound manner they are equally not willing
or able to pay the current prices for these products.
Manufacturers and retailers should seek a price premium
of 10-20% above conventional food counterparts, something
which would be deemed acceptable to occasional and non-users
of organic products.
Another obstacle to market growth is that consumer perception
of improved taste and quality of such products varies
considerably. The view that organic produce is tastier
than conventional food and drinks is not widely proven
in the eyes of consumers. A clearer understanding of nutritional
and health benefits would also increase their consumption
of natural food and drinks.
Consumers need to be more educated about organic produce
and its benefits both to health and to the environment.
Only this will impact on perceptions of and attitudes
towards the current high price and may help present an
argument that consumers are getting a good deal when all
of the effects on human, animal and environmental health
are factored in. Effective imagery and branding will become
vital, especially in attracting new consumers. The onus
is on manufacturers and retailers to develop more sophisticated
product offerings that actually fulfill consumer expectations.
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