1. Nic Lampkin, Director Organic Research Centre, Elm Farm Susanne Padel, Research Associate Aberystwyth University

2. In the media spotlight Shoppers lose their taste for organic food The Guardian, Friday 29 August 2008 Organic food sales have fallen more than at any time in the last decade as shoppers try to cut costs and experts warn that consumers are more confused than ever about whether it is worth paying the higher prices.

3. Organic sales set to slip, says Mintel November 2008 A new survey from Mintel shows that seeking out organic food is slipping down consumers’ ethical agenda as the credit crunch begins to bite. According to the survey, nearly half of the UK’s organic shoppers – 48 per cent – will consider reducing or giving up buying organic food altogether in the year ahead.

4. Hard-up shoppers abandon organic and fair trade goods The Times, March 26, 2009 Organic food has fared particularly badly. In a Populus poll commissioned by the Times, only 23 per cent of consumers said that they intended to buy organic this year - down from 34 per cent last year. This compares with more than three quarters of consumers saying that they would buy food with less packaging, and two thirds saying that they would buy more healthier foods or more locally produced goods.

5. Conflicting views New results to be published next week will show: small increase in UK organic sales in 2008, growing strongly in the first six to nine months then falling back in the face of the economic downturn in late 2008 and early 2009 What is the real story? First, some background data

6. Global organic market 1999-2007 97% of consumer demand in North America and Europe. Asia, Latin America and Australasia are important producers and exporters Supply has tightened for fruits, vegetables, beverages, cereals, grains, seeds herbs and spices Market growth is expected to continue, but at lower rates

7. European organic market value M€

8. European countries with the highest sales

9. European countries with highest share of food sales

10. Value of the UK organic market (£m at current prices)

11. 2007 Market by sectors (Key Note 2008) Strongest growth in the dairy and meat market

12. Fruit and vegetables 34 % of organic sales (equal split between fruit & vegetables) First entry point for many consumers, Direct association with not spraying and home-grown, taste is important 10% increase in horticultural land in 2007 Some reports of price reduction in the autumn of 2008 to stimulate demand

13. Cereals and pulses Large part of production for feed market Supply and demand are not in balance Price fluctuations in 2008

14. Dairy Second largest sector (21%) Above average growth, mainly in milk sales and yoghurts and desserts Commitment from key players (Federation of Organic Milk Groups and DairyCo) Health claims are important for consumers Growth (lower rate) expected to continue, but supply unclear

15. Meat Above average growth rates of retail sales Beef (25% of meat market) undersupply in 2007, but increases in production Lamb (10% of meat market) seasonality & sales to non-organic outlets; increasing production may lead to oversupply Pork & bacon/ham (about 20% of meat market) Taste is important motive Two segments selling to multiples and direct sales Demand, but sales price is not always cost covering

17. Organic and conventional shopper footfall 2006-08

19. Organic and conventional meat sales compared

20. Meat price trends 2006 to 2008 in multiples (Source TNS)

21. Farm gate price Beef

22. Farm gate price Lamb

23. Volume of milk sales compared (DairyCo from TNS data)

24. Organic Farm gate Milk Price compared 2007 and 2008 (Source: Kingshay)

25. What is effect of credit crunch?

26. Two broad segments of organic consumers Regular/committed >80 % of sales Well educated Health aware Middle income levels Believe in organic product quality Seek other attributes Environment Animal welfare Social “Missionary zeal” Occasional < 20% of sale More price & convenience sensitive Cooking skills? More sceptical about some claims Little knowledge 90% of UK households claim to buy at least some organic products more committed consumers expecting to spend more than less on organic food in 2009

27. Competition for organic from other sustainability initiatives Natural Locally sourced Fair-trade Carbon footprints but Only organic has clearly defined standards and a European regulation

28. Need better communication Mintel: Consumers may review spending on premium organic foods if they do not fully understand the benefits, but a growing trend of people seeking ways to make a difference “What is needed is a unified voice from the organic industry, extolling the virtues of their products”. Justin King, chief executive of Sainsbury's: customers were increasingly concerned with animal welfare and husbandry standards but organic food producers had not done a good job in communicating what it “stood for”. Joint UK-Ireland EU-funded promotion initiative?

29. Sources Moakes, S and Lampkin, N (2009) Welsh Organic Production and Market Report Jan 2009, Organic Centre Wales, IBERS, Aberystwyth University. Lampkin, N., Measures, M. and Padel, S. (eds.) (2008). 2009 Organic Farm Management Handbook. Aberystwyth and Newbury: Aberystwyth University and Organic Research Centre Elm Farm. Market Assessment 2008: Organic Food & Drink, Key Note Ltd: Hampton. MINTEL (2008). Organics - UK - October 2008Report. London: Market Intelligence Unit of the UK Economic Intelligence Unit. Padel, S. and Foster, C. (2005). "Exploring the gap between attitudes and behaviour: Understanding why consumers buy or do not buy organic food." British Food Journal 107(8): 606-625. SA/WDA/OCW (2004). Organic Food: Understanding the consumer and increasing salesReport. Aberystwyth: Soil Association, Agri-food partnership, Organic Centre Wales, Welsh Development Agency, Welsh Assembly Government. Soil Association (2009) Organic Market Report to be published 6 th April www.soilassociation.org