Organic Trade Board in the UK secures 10 million EU funding to grow organic food and drink sector

Transcription

1 Organic Trade Board in the UK secures 10 million EU funding to grow organic food and drink sector The Organic Trade Board (OTB) has been awarded 10.4 million by the EU to run a three year campaign to promote organic food in the UK and Denmark. Starting in January 2017, the OTB will work with brands, processors and retailers to drive growth in the organic food and drink sector. The OTB won the EU bid by demonstrating that the funding for the campaign will help grow retail sales of organic, increase employment in organic agriculture, and improve awareness and understanding of the benefits of organic food and drink. In the UK, the organic market is worth 1.4 billion p.a. and accounts for 1.8% of all grocery sales and grew by 5.6% in In contrast, the non-organic sector saw its sales contract by 0.6% in the same period. Yet despite the buoyancy of the market, the UK still lags behind its European counterparts in terms of annual per capita spend on organic. Britons spend approximately 28 per person on organic food each year compared with 162 in Denmark and 97 in Germany so there is much room for growth. 2 The new campaign run by the OTB will seek to accelerate growth of the organic food & drink market and to build retailer value, by partnering with Denmark who are global market leaders in organic penetration and market share. In 2015, the organic sector in Denmark grew by 11% and organic sales now account for 9% of all retail food sales. In the last six months of 2016 growth of organic reached 18% 3. The organic sector in Denmark is aiming to reach 25% of the retail food sector in the coming years and in some categories this has already been achieved. Organic accounts for over 30% of dairy sales in Denmark (compared with 10% in the UK). 4 Globally, there is growing consumer demand for organic food demonstrating significant growth opportunities for export. In 2014, the global market for organic food was $80 billion. The US is the largest single market, worth $43 billion and forecast to grow by around 15% by Nor is organic the preserve of the West, with China now the fourth largest market. 1 Soil Association market report, Nielsen Scantrack, 52 weeks ending 13 th August FiBL, AMI Organic Data Network Survey, Nielsen, GfK ConsumerScan, 2016

2 Commenting on the campaign, Paul Moore, CEO of OTB said The organic market is in a clear growth phase in the UK. We produce world beating organic food that is loved by more and more consumers. But there s still much more we can do we need to increase availability of organic products and that means convincing retailers that organic should be a key part of their sales strategy. That s where our partnership with Denmark will be crucial as we share the insights and strategy they have pursued to get more organic on shelf in the UK. The campaign has been match funded by sixty OTB member companies accounting for 70% of the UK organic market. These include retailers, such as Tesco and Sainsbury s, major brands such as Doves Farm Foods and Rachel s, as well as processors such as OMSCo and independent retailers and wholesalers. Together they have pledged 340k per annum. The EU match funding of 80% means annual funding will now stand at 1.7m per annum. "The opportunity for Sainsbury's to be part of this initiative is hugely welcome. As the first major retailer to launch our own range of organic foods in 1986, we are pleased to be able to support the work of the Organic Trade Board. We have no doubt this significant investment will continue to build on what is currently a growing market by helping our existing customers enjoy a broader range of organic foods whilst helping to attract new customers into the category. The growth we are seeing in the organic produce market is based on long term customer trends, such as a greater desire to understand how the foods they eat are sourced and produced" said Melanie Cherchian, Category Manager for Dairy, Packaged Food, Sainsbury s. As a direct result of what the industry has done, we have seen growth that has outstripped the non-organic sector. It has been amazing. Now, the OTB has gone one step further and has secured a record three year EU grant to continue to promote the benefits of organic. As the UK s leading importer and distributor of organic fruit, which is one of the fastest growing sectors of the organic market, we fully recognize the market opportunity for us and the OTB campaign will continue to play an important role in further developing that market. Adam Wakeley, CEO Ethical Fruit Company, Organic Farm Foods Catherine Fookes, OTB s Campaign Manager responsible for securing the EU bid said: This award will enable us to triple the investment in helping grow the organic food and drink sector. The Organic, Naturally Different Campaign succeeded in growing sales and changing attitudes to organic - many more consumers now understand its value. With the increased spend we will do even more to grow the market, including collaboration with major retailers, in-store promotions, shopper marketing, and national ad campaigns. Henrik Hindborg, Marketing Director at Organic Denmark: "Denmark has become the world s leading organic nation in terms of market share and overall consumption of organic foods. Organic Denmark estimates organic share at 10% of all food sales in 2016, taking organic from niche to mainstream. Following 10 years of consistent growth, half of all Danes now buy organic food every week. This has been achieved through a combination of effective organic policies and close cooperation with Danish retailers regarding development of the organic market.

3 "We are at the next phase of our development and this ground-breaking campaign is a key part in helping us achieve our further objectives. We are looking forward to working alongside our British counterparts and sharing our joint enthusiasm and expertise in helping maximise the opportunities available to us all from this - the largest international organic campaign." According to a Consumer Attitudes Report (commissioned by OTB in 2016), consumers increasingly understand the health, taste and environmental benefits of organic. Growing demand is driven in part by young consumers who are health conscious, engaged and increasingly educated about making choices that benefit themselves and the environment. Whilst the Danish and UK organic markets are at different stages of development, the consumer in Denmark and the UK has the same profile. The consistent strong demand for organic presents UK farmers with an opportunity. The latest US organic farm survey, (published in 2016) shows that over 14,000 organic farms sold $5.5 billion in organic food in 2014 a rise of 72% since Despite the massive growth in domestic production, the US is still a large net importer of organic produce and represents a real opportunity for British exports. To take advantage of this opportunity, there needs to be a step change in organic farming in the UK. Currently, only 548,000 hectares are organic accounting for less than 2% of total agricultural production. 6 By contrast, in Denmark there has been a 30% rise in total acreage converting to organic. 7 The organisations that certify organic land are reporting an increase in the numbers of farmers applying to become organic and UK organic production needs to increase to meet growing demand from domestic consumers and for export. From 2010 to 2016, the OTB has spent 3.2 million of industry and EU funds promoting the benefits and value of organic products, working across industry to deliver a program that has contributed to increasing sales of organic. This funding increases that money threefold. -Ends For more information, please contact: Chrissie Williams - Chrissie.williams@greenhousepr.co.uk - tel: Rachel Parkes Rachel.parkes@greenhousepr.co.uk - tel: Jenny Briggs jenny.briggs@greenhousepr.co.uk - tel: Notes to Editors 1. About the Organic Trade Board The Organic Trade Board was formed in 2009 and has one aim: to grow organic sales in the UK. With over 135 members and representing over 70% of the UK s organic market from brands, processors, co-ops and retailers we are the voice of the organic industry. 5 Certified Organic Survey , US Department of Agriculture & National Agricultural Statistics Service, DEFRA, Organic Denmark, 2016

4 2. The EU money has been awarded under the promotion policy: DG Agriculture and Rural Development, European Commission, governed by EU regulation no.1144/2014, other eligible products and schemes are all agricultural products excluding tobacco; also fishery products and EU Quality Schemes (including organic). 8 The EU funding is split between the two countries, with the UK receiving a budget of 7.2m, and Denmark receiving 3.2m a total of 10.4m over three years. 3. OTB s Fresh Look at the Organic Consumer Report Summary Further comment from the organic industry We are delighted at the news of the Organic Trade Board s successful bid in securing funding from the EU to continue to promote and support the organic industry in the UK. This is a fantastic opportunity to reach out and educate new shoppers and implement in-store best practice we have seen from other EU markets. With the organic market already growing at 5%, this could be a watershed moment for the organic industry to propel itself even further. Daniel Wheeler, Marketing Manager, Rachel s At G s Fresh Ltd our overall Organic sales have grown in As well as our core salad we have been very pleased with our brassica crops, mushrooms and onions. As the Organic market continues to expand and develop we must ensure we meet the expectations of all consumers especially those with young children who want a wider choice of products they can buy consistently. Post Brexit we see a great opportunity to work with other like-minded organic growers and suppliers to explore the export market more seriously with a range of products. Mark Haynes, Managing Director, GS-Fresh Ltd Securing the EU funding is a reflection of the work carried out by the OTB to date in delivering a generic campaign for the organic industry and helping to bring sales back to growth. With this announcement, it s not just achieving the funding from the EU, but doing so in partnership with Denmark, and whilst UK businesses have been facing great uncertainty, they have all contributed to the campaign, supporting future growth potential. At Organix, the health of the organic industry is the legacy we want to create healthy more nutritious choices for everyone. With 50% of baby food being organic we know that the entire Organic industry has every chance to continue to grow with the support of the Organic, Naturally Different Campaign. Anna Rosier, Managing Director, Organix 8 The content of this press release represents the views of the author only and is his/her sole responsibility. The European Commission and the Consumers, Health, Agriculture and Food Executive Agency (CHAFEA) do not accept any responsibility for any use that may be made of the information it contains.

5 Congratulations to the OTB on this significant boost to UK organic. To have this level of support is exceptional and working closely with Denmark will be very valuable. Our licensees run organic food businesses all over Britain and many of them have trading relationships across Europe. This is very welcome news to all of us in the organic sector and will help us build on the growth we ve seen in recent years. We will continue to work closely with the OTB and do all we can to help organic business succeed in the UK. Roger Kerr, Organic Farmers & Growers Chief Executive The Organic Trade Board s successful bid for continued EU support is fantastic news. Our recent research coupled with strong organic market growth (up 6% in the 52 weeks to 1 October 2016) shows there are huge opportunities for organic in the UK. Our research showed more and more people are worried about where their food comes from organic has the answers and this added boost from EU funding, secured by the OTB, will help make organic an even bigger part of retail in the UK. This will help everyone right through the supply chain, not just the members of the OTB, but all Soil Association Certification licensees, farmers, processors, brands and businesses". Clare McDermott, Business Development Director, Soil Association Certification