Welcome to Wholesale Manager’s Natural & Organic feature.
Time was when only health freaks, hippies and a few fellow travellers were interested in natural and organic food. These days ‘Natural and Organic’ has hung up its Jesus sandals, and is firmly lodged in the grocery mainstream.
According to the Soil Association’s Organic Market Report 2015, UK sales of organic products increased by 4% in 2014 to £1.86 billion. As the report says, it shows remarkable growth in a year food prices fell 1.9%, and consumer food spending 1.1%.
Another interesting development highlighted by the report is the split between the different sales channels. The figures show 70% of organic sales going through multiple retailers. That is predictable enough, given the supermarkets’ dominance in much of grocery. Box schemes and on-line account for 11.6% and again that is to be expected, given on-line shopping’s continued rise in popularity as a consumer channel across the board and the skill and flair shown by the box scheme operators at local level.
But the big opportunity that Natural & Organic presents to wholesalers and cash & carries is in direct sales to caterers and the independent sector, two areas served well by wholesalers in other grocery categories. Natural & Organic is an area where attention to detail is critical, bearing in mind the short shelf life and perishable nature of these products. Cash & carries and delivered wholesalers already work closely with their customers at local level, and this is a ‘natural’ development area.
At present catering accounts for just 3% of the UK’s organic sales, as reported by the Soil Association, which is only to be expected, given that ‘Organic’ isn’t exactly a unique selling point on the average restaurant menu. But that could change if the celebrity chefs and other opinion leaders start singing organic’s praises.
The “Other independent retail” sector accounts for a healthy 15.4% of organic sales, or just under one sixth of the total. A large chunk is presumably farmers’ markets and other channels beloved of “foodies” with myriad suppliers and little opportunity for quality control. But as the nation migrates from the weekly “big shop” at the supermarket to several visits per week to the local convenience store, there’s nothing to stop the cash & carries and delivered wholesalers taking matters in hand and diverting a share of natural and organic sales to the retail customers they serve in the independent sector.