Going organic: how the horsemeat scandal has boosted the organic industry

While organic was previously seen as a specialist market, it has recently become more popular thanks to food scares, big retailers and organic advertising campaigns. Organic sales continue to soar as the Soil Association’s organic market report for 2013 found that global sales of organic food and drink this year reached almost $63bn.

Whilst organic is now taking off, it was not always this way; during the height of the recession organic products suffered a damaging drop in sales.

Chair of the Organic Trade Board (OTB), Paul Moore, explains: "When the campaign started the [organic] market was down about 13%. What happened was at the time of the recession a lot of big retailers suddenly decided that organic wasn’t part of their agenda. There were some significant losses in distribution and of course that drove the market down."

The OTB, a not for profit organisation comprised of leaders from the UK’s food industry, along with other industry bodies, set out to build the market back up by spreading the organic message to consumers and manufacturers.

We speak to Moore about the OTB’s ‘Organic. Naturally Different’ campaign and how the board is encouraging manufacturers to go organic.

Organic industry campaigns

After lacklustre sales during the recession, the organic industry has decided to pick itself up. The most recent campaigns include Organic September, which this year saw the launch of the ‘Small Changes, Big Difference’ campaign and ‘Organic. Naturally Different’, organised by the OTB.

The latter used humorous adverts and a clever social media campaign in an attempt to speak to and not lecture consumers. Moore states that the organisation realised quite quickly that they needed to "talk directly to consumers" in the campaign.

The campaign, which was shortlisted as a finalist for the Grocer’s Best Outdoor Advert 2012, is in its third year and has already had a striking effect on the general public. The OTB surveyed the general public and found that 80% said the outdoor ads would be very likely to encourage them to buy organic more often.
"Between the campaign, the activities of organic businesses, certifiers etc., the market is now back in growth," exclaims Moore. According to Kantar Worldpanel, organic food and drink sales rose 4.2% in the 12 weeks to 9 June 2013.

Moore continues: "That’s a genuine growth within the market and that’s been driven by companies like Waitrose, Sainsbury’s, Ocado online and all of those businesses; [they are the] ones that have been offering a range of organic products and they seem to be doing really well with it. We’re in a much more stable and I think more hopeful position than we were 3-5 years ago."

The organic industry’s main stumbling block has always been the stereotype that organic products are extortionately more expensive than non-organic products, but this is not always the case. Moore cites an example in the dairy section where organic dairy products are rarely the most expensive on the market because there are other high-end products out there.

To counteract the stereotype that organic is too expensive for the average family, the OTB purchased enough food for the average family for a week. According to the Office of National Statistics the average amount spent on food each week is £53.50 per week for an average household of 2.4 people.

The relatively small amount of money allowed the team to purchase a sizeable pile of organic food. Moore described the sight as "incredible" as the amount of food showed that this level of purchasing could easily feed the average family or larger.

Improving understanding of the organic industry

The barrier between the general public buying organic is also due to the fact that many people still do not understand what organic means. Moore says: "If you’re buying into organic it’s not a lifestyle choice, you just understand how things operate within that system. You’re buying the best you can possibility do."

Organic is a term defined by law that must meet a strict set of standards on what farmers and manufacturers can and cannot do. Organic farmers usually operate in terms of ‘best practice’ so they are limited to what they can use in terms of herbicides and pesticides for example.

Moore states that the main benefit of organic food is that it comes from a source that consumers know is legitimate and safe as farmers are legally bound to operate in certain ways. Feeding regimes, stocking densities, processing practices and much more are controlled by organic law.

In our busy day-to-day lives we may not always know the history or ethics of a manufacturer if we are in a rush, looking for a loaf of bread. The term organic is seen as an easy, efficient way to seek out legitimate manufacturers.

This effect is also beneficial for manufacturers and a point that Moore is keen to stress. The idea of ‘best practice’ can also be aligned with many conventional farmers who work hard to make sure they are a reputable source of quality food. The issue comes when manufacturers are not certified as they may potentially have to spend more money on marketing trying to explain to consumers individually that their products come from reputable sources. With organic this is already implied so the manufacturer does not need to worry.

"Manufacturers are interested in producing the best products possible for the customers at a price point and so forth," Moore argues. "I think organic gives them that chance to add value to their products in that when they produce it … and it’s got organic certification on it, they’re already at that point where consumers will understand that this manufacturer is taking this road down towards best practice all the time and how he then treats his products is all like a halo effect that comes from organic."

What makes an organic product?

The idea of buying organic is sometimes bigger than the concept itself, leading to both consumers and manufacturers getting confused about what makes an organic product.

In July 2013 seven brands who manufacture ‘organic water’ were told by an Australian consumer watchdog that their products could no longer be labelled as organic as water cannot be organic. The Australian Competition and Consumer Commission (ACCC) described the practice as "misleading" and "deceptive".

"Credence claims such as "organic" can be used to justify higher prices and create a competitive advantage for the user. As such it is essential that they are only used correctly," ACCC Deputy Chair Delia Rickard said.

A few manufacturers involved in the case argued that the word ‘organic’ was part of their brand rather than a description of the product. Moore agrees that there are certain areas of the organic industry and law that need to be "tidied up" and the industry needs to make an effort where there are claims that cannot be substantiated to explain to consumers.

Moore states: "I don’t think that a consumer would look at water and say well you call that organic and I think you have to look very hard at what is valid in the minds of the consumer."

According to organic standards, water cannot be described as organic. Robert Sexton, chief executive of the Soil Association Certification, explains: "The term organic can only be used in relation to plant and livestock products. Water is neither of these and no EU legislation or private standards allow for water to be described as organic.

"Water is regarded as a non-organic component of organic food products. It is a permitted processing aid. It is never presented as a certified ingredient of an organic product."

The effect of horsemeat on the organic industry

Although the recent horsemeat scandal shocked the general public and sent the food industry into a tailspin, it did have an unlikely positive effect on the organic market. Sales of organic are continually rising and major supermarkets have also seen a rise in sales of organic food, with Waitrose citing a 6.6% growth in the latest quarter in 2013.

The general public were so put off by the horsemeat scandal that more people turned to organic food where traceability was not an issue. "If you take our experience in terms of all the food scares, every time there is a food scare we get a lift in sales in organic and it’s because organic tends to operate in that area of best practice," states Moore.

Organic has bounced back after an extraordinary low after the recession that saw sales fall of 8% in 2011/2012. While the organic industry in the UK is still quite small it has had a dramatic effect on the food industry, especially in terms of food labelling and traceability.

Only a decade ago there was a remarkable difference in the way that ingredients are listed on products. Now to fit in line with the general public’s attitude to natural and healthy products colourings, preservatives and flavourings have largely disappeared from products.

Moore claims this is a reaction to the "sudden growth in organic interest, in clean labelling and best practice. I think industry has reacted to that … and products have benefited from it."

The interest in natural and traceability has meant that the line between an organic product and conventional product is not as obvious as it was before. Moore argues that it is impossible to tell whether this has made the organic industry’s job harder but that the values of organic still remain they are just further down the chain and deeper into consumer psyche, which Moore claims is "a more difficult message to communicate but nevertheless it’s still very firm".

Whether or not it is harder or easier to promote organic products is hard to say. What we do know is that organic is the safety blanket people crave when things go wrong.