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
London, United Kingdom (PRWEB) October 31, 2011
Demand for organic food is expected to strengthen in the United Kingdom over the five years through 2016-17, according to IBISWorld, the UK’s largest publisher of industry research. Environmental, animal welfare and health concerns will continue to drive demand for organic food. Other factors affecting demand for organic food will be disposable income levels, consumer sentiment, and the price and availability of organic food. IBISWorld estimates industry revenue will increase at an average 2.6% per annum over the five years through 2016-17, to about £2.02 billion. Sales are expected to increase, yet will remain relatively low as a share of retail outlets' total revenue.
According to IBISWorld analyst, Rachel Lohan, until the recession hit, demand for organic food was strong. “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,” says Lohan. “Consumers are demanding food that is considered more ethical, more environmentally friendly and healthier.”
IBISWorld estimates revenue in the UK organic food industry will contract at an average 3.5% per annum over the five years through 2011-12 to £1.78 billion. After strong growth from 2004-05 through 2006-07, industry revenue contracted over the following three years as the recession took hold of the UK economy and consumers traded down to lower-price food. Industry revenue is anticipated to pick up again as the UK economy slowly starts its recovery. In 2011-12, revenue is anticipated to grow 3.5%.
Despite this overall growth, organic food sales remain relatively low compared with food that is more conventional. For example, IBISWorld estimates that organic food sales will account for just 1.2% of total supermarket revenue in 2011-12. Industry revenue includes retail sales of organic food by supermarkets, speciality food stores, farmers' markets and box schemes.
IBISWorld estimates there are about 77,425 establishments selling organic food in the United Kingdom (including supermarkets, convenience stores, speciality food retailers, stalls and markets and box schemes). However, many of these retail outlets sell a variety of food products, including organic food. Supermarkets, like Tesco, Sainsbury's and John Lewis Partnership plc, which operates department stores and the supermarket chain Waitrose, are the major retail channel for the industry. IBISWorld estimates that employment attributable to the retail sales of organic food will be about 20,131 in 2011-12, representing an annual decrease of 2.0% since 2006-07. IBISWorld estimates that wages attributable to organic food sales will be £203.6 million in 2011-12, down 1.7% annually.
UK Organic Food Industry revenue is anticipated to grow over the five years through 2016-17 at an average 2.6% per annum to reach £2.02 billion. Consumers are anticipated to regain their taste for organic produce as consumer confidence improves and the economic recovery continues.
For more information, download the full report from IBISWorld on the Organic Food Industry in the UK
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