Wal-Mart’s decision to open an organic “supercentre” in the US has been mirrored at its UK subsidiary Asda, which intends to treble its organic range this year. Supermarkets are keen to increase their share of the market, which is no longer the preserve of affluent “foodies” and appeals to a diverse section of the population.
The UK’s grocers face further competition from leading US organic retailer Whole Foods Market. The owner of the Fresh & Wild chain will enter the UK next year and is seeking an advertising agency and marketing director (<I>MW</I> January 26). But for the time being, Sainsbury’s and Tesco are battling to become the top organic produce seller. According to TNS Worldpanel, Tesco had a 28.3% share, against 26.1% for Sainsbury’s, in the year to February 27. But in the 12-week period to the same date, Sainsbury’s had pulled ahead, leading Tesco by 31.9% to 29%.
Sainsbury’s relaunched its range as SO Organic last year, but is being challenged by an online, Greenwich-based organic specialist of the same name, which claims the supermarket has “copied” its brand. The independent company is considering legal action, while Sainsbury’s is pleading ignorance over “name-stealing”, saying there is no overlap in product offering.
The future looks generally rosy for organic sales. TNS Worldpanel reports the market has increased by 18% over the past year, to &£915m. All the major food retailers have seen rises of more than 10%, with Tesco up 23%, Waitrose 19%, Sainsbury’s 17% and Asda 13%. Marks & Spencer saw the highest growth, some 26%, but, like Tesco, cannot comment as final results are due. Sainsbury’s senior brand manager of organics Ruth Bailey explains: “Research showed organic had become mass-market. Several years ago it was seen as a bit worthy, with a niche buying group. But the majority of people who buy organic produce now do so for health reasons, such as parents wanting to protect their families’ health.”
A spokesman for Asda adds: “Customers across the board are buying organic and we plan to treble our range of products. Shoppers will notice a step-change in the number of products in store and be able to distinguish them more easily.”
Supermarkets are not alone in making hay out of the new trend. Soil Association market information manager James Cleeton says: “Independents and direct sales are growing even faster. Box schemes are seeing huge growth. But supermarkets are not jumping on the bandwagon. By stocking organic, and putting effort into expanding and marketing their ranges, they have legitimised it.”
Yet the market faces barriers to further expansion. Exploding demand could cause supply issues, as Stewart Samuel, senior business analyst at grocery industry think-tank IGD, points out. “Six out of ten buyers would buy more if it was available in greater categories, but it’s not always there. The Government is prioritising expansion of organic land to encourage farmers to produce more.”
Retail bosses are aware of provenance issues. Waitrose marketing director Christian Cull says: “Often organic food is equated to being local. Some customers think if it’s not local it ceases to be really organic.”
Ultimately, the speed at which the organic market continues to grow is at the mercy of consumer opinion. Bailey adds: “UK sourcing is important to us, because it is important to customers. ‘Knowing where my food comes from’ is a phrase we hear a lot.”