Was the organic food revolution just a fad? Fear for farmers as shoppers tighten belts

Editor: Vickey Shen

Alibaba

27 Oct 2008 06:50:28 GMT

From new mums worried about their children's health to foodies seeking the very finest products, consumers have embraced organic food with more enthusiasm than most environmental trends.

But now the British love affair with organics has stalled in the face of rising prices and tightening budgets as mortgage and fuel bills bite and fears rise over job losses.

The market research company TNS keeps track of the shopping habits of 25,000 households and has watched organic sales rise tenfold in the last 10 years to more than £1.3bn a year, though this still accounts for only a few percent of total food and drink sales. But the latest figures show the biggest and most consistent fall in organic food and drink sales for a decade - by nearly a fifth from their all-time peak in February.

The steepest decline has been in eggs. Market research carried out for the Guardian by TNS shows organic egg sales down 18% in the four weeks to August 10, compared to the same period last year, as shoppers appear to be opting for cheaper, but still ethical, free range products.

Among the many affected farmers are father and son Dennis and Chris Ball, whose farm in south Wales switched to organic eggs more than a decade ago. The Balls are among a number of egg producers reported to be quitting their organic status. The final straw was a letter from their buyer saying it no longer wanted organic eggs because customers have been abandoning the sector en masse. "We thought it was getting too tight anyway," said Dennis Ball. "This letter really emphasised it and we said 'that's it'."

Noble Foods, the UK's biggest egg marketer, said the TNS research showed the fall in organic sales has been accelerating over the past year. Noble Foods has converted back some of its own farms and advised other producers to do the same because the company can no longer pay premium organic prices.

Beyond eggs, there is also evidence of conversions into organic production slowing sharply. A report for the National Farmers Union based on figures to March showed ongoing conversions into organic milk halved last year.

The Soil Association reports only "one or two places" leaving, but Helen Browning, the director of food and farming, said that its members tended to be smaller and more specialised. The implication is Soil Association members are less likely to be at the forefront of a mass retail trend.

Reasons for the decline vary widely: a poor summer for barbecuing; falling public confidence in the benefits of paying extra for organic produce; and even concerns that more land and labour-intensive organic production is exacerbating the recent surge in food prices. The single greatest issue cited by farmers and retailers alike, however, is the credit crunch. Organic food is just one of many examples of customers trading down.

At the Tortworth Estate farm shop near Bristol, manager Simon Ball said there had been a noticeable fall in sales of organic eggs and bread as customers trade down to free range and premium lines. "It doesn't sound like much but it all adds up," said Ball. "That's the little ways people are saving pennies at the moment."

In Wales, Dennis Ball says he is unlikely to convert back to organic production because it would be too time consuming and expensive: "Once the ground has been declared non-organic you shouldn't go back to it," he said. But the Soil Association believes most organic buyers will stay loyal. "These values are important to people still," said Browning.

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