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Scotland's organic food and drink industry grows

Scotland's organic food and drink industry grows

Organic food and drink sales are on the increase, with this UK sector predicted to grow to £2.5 billion in 2020. Scotland needs to innovate and diversify to make the most out of market opportunities.

There are currently 560 organic producers and processors in Scotland, who account for 6.5% of all UK organic sales.

Organic sales in Scotland grew by 5.4% between March 2017 to March 2018, according to market intelligence firm Kantar Worldpanel. And the UK’s organic certification body, the Soil Association, reports that their Scottish-based certified licensees saw a 28% increase in organic sales in 2017.

This all points to a healthy future for the organic sector in Scotland, with Scottish businesses looking to grow their organic output in various ways.

Get on board with Organic September

The Organic September campaign is a marketing initiative that puts the organic sector in the spotlight. Led by the Soil Association, the month of September is dedicated to improving awareness of organic food. This includes shining a light on organic farmers, producers, brands and products.

It’s a month to open doors and show-off organic food and drink, and drive sales of organic produce across Scotland. It’s a time for independent retailers to offer sampling sessions, cooking demonstrations and in-store discounts.

The campaign proved so successful in 2017, with a sizeable 7.1% growth in sales for the month of September, that hopes are high for a repeat this year.

Showcase local and organic produce

According to Scotland Food and Drink Shopper Perception research, 47% of Scottish consumers are trying to buy more local food, compared to 39% across the rest of UK. In Scotland, almost 70% of the participants perceived products labelled as Scottish as being of better quality.

There is growing demand from consumers for farmers’ markets, online farm delivery boxes, local restaurants and shops that sell local and organic produce in cities. People want easier access to farmers and produce, and this is particularly important for millennials, who associate organic food with a healthier lifestyle.

According to the Organic Trade Association, 40% of millennials seek out organic because they are more aware of the benefits of including organic foods in their diets.

Explore organic sector opportunities

According to the Soil Association’s Organic Market 2018 report, produced in partnership with Nielsen, around 1.5% of the total UK food and drink market is organic. However, the organic market has seen substantial growth, with UK sales of organic products up 7.1%, making it worth £2.2 billion in 2017.

Looking at individual category growth, the dairy sector has the biggest share with 28.7% certified with organic, a growth of 3.1% year-on-year in 2017. Followed by fresh produce, like fruits and vegetables, which make up 25% of the organic market, up 6.5%. While meat, fish and poultry account for 10.2% of the total organic market, up 4.1%.

Interestingly, the canned and packaged category, which accounts for 16% share of the organic market, has grown by 5.2%, whereas chilled foods and deli makes up for just 3.4% of the market, but growing by a significant 21.3% in 2017.

Make the most of new organic sales channels

Supermarkets sell the most organic food, accounting for 67% of overall organic sales, worth £1.4 billion in 2017. Independent retailers make up 16.3% of total organic sales, while discount supermarkets are expanding their organic ranges, and growing their organic sales.

Home delivery services and the foodservice sales, have grown by 9.5% and 10.2% in 2017. In the near future, consumers who eat out more often, and demand increased food-on-the-go availability, are likely to make those sales channels an essential part of organic sector success.

Germany: the organic role model to follow

Germany is a key player in the global organic market. With a market worth £8.4 billion in 2017, up 9.9% year-on-year, there’s a lot to be learned from this European organic giant.

The biggest organic names in Germany are Bioland, Biopark, Naturland, and Demeter. Together, they represent different levels of organic production systems in the country. And joining these big names is, Bio-Siegel, The German Ministry of Agriculture’s state-regulated organic standard label.

Germany also has a range of organic supermarket chains, that sell only organic products. The biggest in the sector are Alnatura, denn’s Biomarkt, Bio Company, and Reformhaus. The denn’s Biomarkt chain alone had a turnover increase of 78% within four years during the period of 2012 to 2016.

What this all means for Scottish businesses

The UK organic market is predicted to grow up to £2.5 billion in 2020, and in the last six months of 2017, over 3,000 new products received Soil Association certification. Organic sales growth is expected to come from online channels as well as from restaurant revenues.

Investing in organic certifications and new product development contributes to the growth of organic food and drink in Scotland. If you’re interested in finding out more about the organic sector, or any other part of the Scottish food and drink industry, get in touch. 

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