Despite ongoing recessionary pressures and a bleak economic outlook, the organic food industry is expected to grow at a compound annual growth rate (CAGR) of 4.7% to £2.07bn over the next five years, according to a new report.
Research carried out by specialist agency C amp;M Research Services showed growth within the organic food industry would be fuelled by “environmental, animal welfare and health concerns”. C amp;M added that disposable income levels, consumer sentiment, as well as the price and availability of organic food would have an effect on demand.
Demand for organic food in the UK has declined slightly due to consumers trading down to less expensive food options. According to US researcher IBISWorld, industry revenue is anticipated to continue to contract as the UK economy remains sluggish. In 2012-13, revenue is anticipated to decline 0.9%.
However industry revenue is anticipated to grow over the five years through 2017-18 at an average 4.7% to reach £2.07 billion. Consumers are anticipated to regain their taste for organic produce as consumer confidence improves, trends towards authenticity and provenance grow and the economic recovery gains momentum.
Josh Stride of the Soil Association said: “As consumers become increasingly aware of the impact their food choices have on other people and the environment as well as their own health, the desire for high animal welfare and avoiding pesticides are also higher on the food agenda. With this awareness consumers want to be sure that what they’re purchasing is aligned with their values so they can effectively vote for the food and farming systems they want to support every time they shop.” #8232; #8232;
An estimated 77,500 shops sell organic food in the UK – including supermarkets (the biggest sector), convenience stores, farm shops and speciality food retailers.