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| ORGANIC FOODS |
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| Executive Summary |
| Organic Foods
Since the end of the Second World War, the business of food production has changed from a localised, or even self-sufficient operation, into a global industry. As the world’s population has increased and space, in many cases, is at a premium, so different methods of farming and food processing have evolved, assisted by developments in the chemical industry. These methods include intensive farming, the use of pesticides and fertilisers, hydroponic cultivation and, controversially, genetic engineering.
Organic farming, where food is guaranteed to be free from chemicals, has strengthened its position in the market almost as a backlash against what is perceived as interference with nature. It has been brought to the forefront over the last decade, particularly in the ongoing BSE crisis. Organically reared animals are not fed antibiotics, growth hormones or artificial food and graze on land that must have no residual pesticides. Fruit and vegetables are treated with neither pesticides nor chemical fertilisers.
When consumer interest began to take off in the early 1990s some multiple retailers, such as Asda, test-marketed organic foods, only to pull out when sales did not meet expectations. However, growing concerns, in recent years, over the origins and growing methods of foods have resulted in a resurgence of interest and there are, of course, its exponents who maintain that, aside from any other considerations, organic food quite simply tastes better than intensively farmed, forced and processed foods.
In response, the major grocery retailers have rejoined niche operators and are increasingly encouraging their suppliers to adopt organic methods of production and banning genetically modified (GM) produce. For example, the name of Iceland Group Plc was, from an early stage, synonymous with a stance against GM food, winning the chain the Retail Initiative of the Year Award in 1999. It also claims to be the first retailer to try large scale marketing of frozen organic vegetables. However, the company has recently admitted that its policy decision to move to 100% organic vegetables was a mistake and a move that its customers simply were not ready for.
This is somewhat surprising as Friends of the Earth maintain that other supermarket chains are increasing their ranges. For example, in its campaign ‘More Choice Because its Your Choice’, J Sainsbury found that a significant proportion of its customers wanted to see more organic foods despite their being considerably more expensive. The multiple consequently introduced many more lines in new packaging, making organic produce more easily identifiable.
However, the entry of the multiple retail trade has always been seen as a mixed blessing by the movement. While it is necessary for any significant growth, restrictions that supermarkets often place on, for example, the size and shape of fresh produce, are at variance with the very concept of organic production. Furthermore, adverse publicity regarding their demands on suppliers have put them in a bad light to the extent that their practices were the subject of an investigation by the Competition Commission.
Supermarkets currently account for almost three-quarters of the value of sales of organic food, but there has also been a phenomenal growth in the number of farmers’ markets where local producers sell their own products, organic or not, directly to the public. The National Association of Farmers’ Markets was formed in 1999 to raise public awareness of such events, to support existing markets and to promote new ones.
If the retail market is undergoing a change in structure, so too is the production of organic food with the entry of the huge multinational food producers such as H J Heinz Company and Mars. This will inevitably change consumer perceptions of organic produce and not necessarily for the better.
However, the entry of large operators has also helped extend the choice of organic produce available and has contributed particularly to the growth in sales of ready meals and multi-ingredient foods.
The industry is still of the firm opinion that there is insufficient support for farmers wanting to convert to organic farming and that a policy of sustainable agriculture will require more financial support and more resources devoted to research.
The amount spent specifically on supporting organic farming in the UK out of the total agriculture budget is, according to the Soil Association, about half the European Union (EU) average and the UK is one of only three European countries that has not provided maintenance payments after the five year conversion payments.
With demand far outstripping supply, the majority of organic food is imported into the UK and its production offers great potential for developing countries. Indeed, organic food production is inextricably linked with the concepts of fair trade as well as with compassion in farming and has some influential advocates, perhaps most prominently HRH The Prince of Wales. What began as an alternative culture, with something of an earthy, ‘hippy’ image has become more mainstream, illustrated by the increasing involvement of the huge, multinational food processors.
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