Organics - UK - November 2007

Table of Contents

• Issues in the Market
• Definition
• Four key points:
• Market in Brief
• Consumer trends boost market growth
• Supply fails to meet demand
• Dairy provides organic model
• Box schemes flourish
• The ethical organic consumer -- competitive or complementary?
• Health claims to drive consumer take-up
• Internal Market Environment
• Key points
• Paying the price of organic food
  • Figure 1: Agreement with selected lifestyle statements, 2003-07
• Health and food labelling
  • Figure 2: Agreement with selected lifestyle statements, 2003-07
• Premiumisation
  • Figure 3: Agreement with selected lifestyle statements, 2003-07
• Provenance is prized...
• ...as is the environment
• The media, food production and food scares
• Supply issues
• Organic conversion
  • Figure 4: UK land under conversion vs fully organic land, 2005 and 2006
• Shortage of British producers
• Broader Market Environment
• Key points
• Demographic changes
• AB socio-economic status is growing but more slowly
  • Figure 5: Changes in socio-economic status, 2002-07 and 2007-12
• Population age
  • Figure 6: Changes in the UK demographic profile, by age, 2002-07 and 2007-12
• Organic -- scientifically healthy or a lifestyle choice
• Organic Brussels
• Competitive Context
• Key points
• Shopping is the new politics
  • Figure 7: UK retail sales of ethical foods, 2002-06
• Ethical dilemma
• When two become one?
• Local sourcing preferred
• Too much chicken choice
• Healthy competition
  • Figure 8: UK growth rates of healthy foods, 2002-06
• Strengths and Weaknesses in the Market
• Strengths
• Weaknesses
• Market Value and Forecast
• Key points
• Booming organic growth
  • Figure 9: UK retail value sales of organic food, 2002-07
• Availability drives growth
• The future
• Good growing conditions
• Capitalising on food trends
• But what about the economy?
• The science of organics
• Opportunities for land conversion
• Continued strong growth set to take market value pass £2 billion in 2011
  • Figure 10: UK sales of organic food, 2002-12
• Greater switch over from conventional foods into organics
• Factors used in the forecast
• Segment Performance and Forecast
• Key points
• Market breakdown
  • Figure 11: UK retail sales of organic food, by type and value, 2003-07
• Fruit and vegetables
  • Figure 12: UK retail sales of organic fruit and vegetables, by value, 2002-07
• Outpacing conventional market growth
• Prepacked dominates
  • Figure 13: UK retail sales of organic fruit and vegetables, by type and value, 2003-07
• Fruit buoyant
• Green light for vegetables
• Healthy potential
• Organic dairy products
  • Figure 14: UK retail sales of organic dairy products, by value, 2002-07
• Dairy doubles
  • Figure 15: UK retail sales of organic dairy products, by type and value, 2003-07
• Dairy desserts and yogurts
• Milk
• Cheese
• Butter, cream and ice cream
• Brands are key to future growth
• Prepared foods and groceries
  • Figure 16: UK retail sales of organic prepared foods and groceries, by value, 2002-07
• Prepared to grow
  • Figure 17: Segmentation of organic prepared foods and groceries market, by value, 2007
• Ambient groceries
• Chilled food eg ready meals
• Frozen foods
• Chocolate
• Meat and poultry
  • Figure 18: UK retail sales of organic meat and poultry, by value, 2002-07
• Organic meats represent quality
• Premium choice
• Demand outstrips supply
  • Figure 19: UK retail sales of organic meat and poultry, by type and value, 2003-07
• Beef
• Pork
• Poultry
• Lamb
• Cooked/processed meats and meat products
• Fish
• Organic bread and cereals
  • Figure 20: UK retail sales of organic breads and cereals, by value, 2002-07
• Breads
• Cereals
• Baby food and infant formula
  • Figure 21: UK retail sales of organic baby food and infant formula, by value, 2002-07
• Baby foods get bigger
• Eggs
  • Figure 22: UK retail sales of organic eggs, by value, 2002-07
• Egg supply fragile
• Segmented sector represents competition
• Forecast
• Continued strong growth set to take market value pass £2 billion in 2011
  • Figure 23: Forecast of UK retail value sales of organic food, at current prices from 2007-12
  • Figure 24: Forecast of UK Retail value sales of Organic food, at 2007 prices from 2007-12
  • Figure 25: Forecast of UK retail value sales of organic foods, in euros, 2007-12
• Greater switch over from conventional foods into organics
• Dairy and Meat & Poultry will be the fastest growing segments
• Change of shares within the organics food market
  • Figure 26: Percentage share of segments within the UK organics food market, 2002-2012
  • Figure 27: Percentage share of segments within the UK organics food market
• Factors used in the forecast
• Product Positioning
• Key points
  • Figure 28: Price positioning in specified food sectors, 2007
• Organic and premium head to head
• Companies and Products
• Companies and brands
• Fruit and vegetables
• Geest (Bakkavör)
• Organic Farm Foods
• Riverford Organic Vegetables
• Dairy products
• OMSCo
• Rachel' s Organic
• Yeo Valley
  • Figure 29: Organic yogurt and fromage frais market share, 2006
• Prepared foods
• Duchy Originals
• Green & Black' s
• Kallo Foods
• Meat and poultry
• Bernard Matthews
• Helen Browning Organics
• Organic bread and cereals
• Doves Farm
• Jordans
• Baby food and infant formula
• HiPP
  • Figure 30: Organic baby food market, by brand, 2006
• Organix
• Eggs
• Deans Foods
• Others
• Seeds of Change
• Brand Communication and Promotion
• Key points
• Adspend is low
  • Figure 31: Main monitored media advertising expenditure on organic foods, 2003-07
• Adspend grows
• Few big spenders
• Big brands dominate
  • Figure 32: Top organic spenders' main monitored media advertising expenditure, 2006
• Own-label relies on brand awareness
• Channels to Market
• Key points
• Multiples lead the way
  • Figure 33: UK retail sales of organic food, by outlet and value, 2005-07
• Retailers get into boxes
• Retailer commitment
  • Figure 34: Summary of grocery retailer organic target/initiatives, October 2007
• Box schemes
• Independents
• E-tailing
• Consumer 1 -- Who -- Usage and Frequency?
• Key points
• Purchase of organic foods
  • Figure 35: Organic foods purchased in the last 12 months, 2007
• Fruit and veg provide entry point
• Women and ABs shop organically
• North of the Watford Gap
  • Figure 36: Purchasing prevalence of any organic food, by gender, region and socio-economic group, September 2007
• Convenience organics profile is not so distinct
• Repertoire analysis -- Who are the keenest organic consumers?
  • Figure 37: Repertoire of organic products bought, September 2007
  • Figure 38: Propensity to buy seven or more organic foods, by newspaper readership, household income and supermarket used, September 2007
• Retailer commitment encourages purchase
• Consumer 2 -- Attitudes Towards Organic Foods
• Key points
• To buy or not to buy
  • Figure 39: Reasons for buying organic food, by number of organic products purchased, September 2007
• Healthy reasons to buy
• Collective ethics
• Who buys for what reasons?
• Older and younger consumers
  • Figure 40: Reasons for buying organic food, by specific age groups, September 2007
• Competitive arena
  • Figure 41: Agreement with statements about organic vs non-organic food, by number of organic food groups purchased from, September 2007
• Location, location, location
• Over-55s go alternative
  • Figure 42: Agreement with statement ' Where I buy my food from (eg farmers' market, farm shop, local butcher/greengrocer) is more important than it being organic' , by age, socio-economic group and newspaper readership, September 2007
• But what about fair trade?
• Appendix
• Internal market environment
  • Figure 51: Fully organic farmed land in the UK, 2006-07
  • Figure 52: Agreement with selected lifestyle statements, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car usage, 2007
  • Figure 53: Agreement with selected lifestyle statements, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car usage, 2007
  • Figure 54: Agreement with selected lifestyle statements, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car usage, 2007
  • Figure 55: Ever shop at a farmers' market, by gender, age, socio-economic group, marital status, lifestage, presence of children, Mintel' s Special Groups, working status, tenure, region, ACORN category, technology usage, household size and car usage, 2007
• The consumer 1 -- Who, usage and frequency?
  • Figure 56: Propensity to buy any organic food, by gender, age, region, socio-economic group, newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007
  • Figure 57: Organic foods purchased in the last 12 months, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007
  • Figure 58: Organic foods purchased in the last 12 months, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007
  • Figure 59: Organic food purchased in the last 12 months, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007
• Repertoire of products bought
  • Figure 60: Number of different types of organic foods bought in the last 12 months, by gender, age, region, socio-economic group, daily newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007
• The consumer 2 -- attitudes and motivations
  • Figure 61: Attitudes towards organic foods, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007
  • Figure 62: Attitudes towards organic foods, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007
• Competitive arena
  • Figure 63: Attitudes towards organic food, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007
• The consumer 3 -- reasons for not buying
  • Figure 64: Reasons for not purchasing organic food, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007
  • Figure 65: Reasons for not purchasing organic food, by gender, age, region, socio-economic group, daily newspaper readership, Sunday newspaper readership, household income, presence of children, Internet usage, supermarket usage, mobile provider and TV reception, September 2007