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Organic food is moving from niche to the mainstream, with the major supermarkets stocking more of their shelves with organic products and increasing their own-brand variety of organic items. After a recession led retraction in revenue over the five years through 2012-13 the industry is expected to return to growth over the five years to 2017-18 as consumers regain their taste for organic produce as the economy recovers.
London, United Kingdom (PRWEB) January 14, 2013
Until the recession hit, demand for organic food was strong. According to IBISWorld industry analyst Kiera Outlaw, “Organic food is moving from niche to the mainstream, with the major supermarkets stocking more of their shelves with organic products and increasing their own-brand variety of organic items”. Consumers are demanding food that is considered healthier and more ethical and environmentally friendly.
IBISWorld expects revenue will contract an annualised 5.5% over the five years through 2012-13 to £1.64 billion. Industry revenue contracted once the recession took hold of the UK economy and consumers traded down to lower-price food. Industry revenue is anticipated to continue to contract as the UK economy remains sluggish. In 2012-13, revenue is anticipated to decline 0.9%.
In accordance with this overall decline, organic food sales remain relatively low compared with food that is more conventional. For example, IBISWorld expects that organic food sales will account for just 1.2% of total supermarket revenue in 2012-13. Industry revenue includes retail sales of organic food by supermarkets, speciality food stores, farmers' markets and shops, and box schemes. However, many of these retail outlets sell a variety of food products. There are a variety of organic food retailers, but supermarkets are the major retail channel for the industry.
Industry revenue is anticipated to return to growth over the five years through 2017-18. Outlaw adds, “Consumers are anticipated to regain their taste for organic produce as consumer confidence improves and the economic recovery gains momentum”.
IBISWorld research indicates that the Organic Food industry in the UK has a medium level of market share concentration, with the top three players accounting for over 55% of the market in 2012-13. The industry has become increasingly concentrated as the sheer size and supply chains of major players makes them formidable players within the industry. Major companies include Tesco, Sainsbury's and Waitrose (John Lewis).
For more information on the Organic Food industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Companies in the industry retail organic food and drink. The term organic refers to farming practices, and the subsequent food items produced, which prohibit the use of artificial fertilisers and pesticides. While organic farming and food processing are excluded, they are nonetheless important in the supply chain.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on many UK industries. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in London, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.co.uk or call (020) 3008 6568.
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