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Independent.ie

Sunday 27 May 2018

Direct sales and push by discounters driving strong organic sales growth

The market for organic food and drink grew by 10.5pc last year, reports Grace Maher

Grace Maher

Grace Maher

The future looks bright for the organic sector. Bord Bia data on the retail multiples showed that the organic market grew by 10.5pc in 2017 and is now worth an estimated €162m.

It also showed that 68pc of Irish people buy organic food or drink monthly, or more often.

That is certainly encouraging news for producers, and as more retail channels become available to people it means increased penetration of both goods and local supply.

That said, there was a slight dip in sales in the last quarter of 2017.

In addition, there were some rumblings of potential over-supply in the beef market at the back-end of the year.

However, the organic market in Ireland has been in steady growth for the past three years, mirroring growth right across Europe and globally.

The sector proportionally has a higher number of operators who sell produce directly to the consumer, and Bord Bia attempted to capture information on those sales to get a more informed picture of the true value of the sector.

Direct sales including online, farmers markets and the independent stores accounted for a further €44m in sales, which shows the innovation in the sector and diversity in channels to market, including short supply chains.

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In Ireland, the discounters are witnessing growth in organic trade, and Dunnes Stores' strong performance comes through shoppers buying organic more frequently and in greater volumes.

As with most reports, the devil is in the detail, such as the top performing categories - fruit and vegetables account for 34pc of organic market sales, with dairy at 17pc. This is similar to countries with huge organic markets like Germany and the US, where the same categories top the polls.

Imports

Consumers want more local organic produce, as outlined in this report, and well established commercial organic growers are expanding to meet market demands.

However, we still need more growers to enter the sector to substitute our dependence on imports, particularly with seasonal produce that can be grown here.

The conventional horticulture sector is holding its own in terms of land under production, however the number of growers involved continues to decline from over 1,200 in the 1980s to approximately 175 growers nationwide now. With large retailers selling many vegetables and fruit as loss leaders, especially in the run up to Christmas, it can be an unstable market to attract new growers.

John Hogan, an agronomist who works with conventional and organic growers, summed it up nicely by stating that "if you give a grower enough of a return he will go at it again the next year, ensuring local supply; if not, he won't, simple as that".

Supply of local fresh produce comes at a price. The Bord Bia data shows that 76pc of consumers have indicated that they are willing to pay a little more for organic food, which is encouraging for organic producers and particularly for those looking to enter the sector.

Grace Maher is development officer with the Irish Organic Farmers and Growers Association (IOFGA), grace.maher@iofga.org


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