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Health and Wellness Series: Organic Trends in the United Kingdom

October 2017

Health and Wellness Series - Organic Trends in the United Kingdom (PDF Version, 492KB) | Help with downloadable formats

Contents

Executive summary

According to the Strategic Market Assessment of the EU European Union report, health and natural products in the United Kingdom represents one of the most promising market opportunities in the European Union. Based on a rigorous analysis of market size, growth, and tariff reductions on European Union (EU) imports, the United Kingdom has been identified as an ideal opportunity for Canadian organic exporters.

The United Kingdom is the fourth-largest health and wellness (HW) market in the world. Within the HW market, the United Kingdom is the fifth-largest organic market in the world. In 2016, organics made up 6% of the HW sector in the United Kingdom, with a retail value of US$1.6 billion.

From 2012 to 2016, organics grew at a compound annual growth rate of 1.9%. In 2016 organic packaged food experienced positive value sales of US$1.4 billion, while organic beverages remained a niche market with a slow compound annual growth rate of 0.4% and retail sales of US$217.9 million.

Modern grocery retailers continued to be the leading distribution channel for organic products in 2016. Private labels continued to account for the largest share of the organic market and currently cover the majority of organic packaged food categories.

From 2012 to 2016, 3,234 organic products were launched in the United Kingdom. There were 2,671 product introductions in the food category, followed by the beverage category with 508 products, and the pet food category with 55 products.

Introduction

The United Kingdom is the fourth-largest health and wellness (HW) market in the world, after the United States (worth US$166.3 billion), China (worth US$107.0 billion), and Japan (US$48.9 billion). In the organics portion of the HW sector, the United Kingdom is the fifth-largest market in the world.

The HW sector grew at a 2.2% compound annual growth rate from 2012 to 2016, with retail sales amounting to US$28.1 billion in 2016. The continued interest in achieving a healthier lifestyle amongst UK consumers is driving the prevalence of HW packaged food and beverages in the United Kingdom. During the review period, the HW sector made up 22% of packaged food retail sales and 51% of beverage sales.

Organics made up 6% of the HW sector in the United Kingdom, with retail value sales amounting to US$1.6 billion in 2016. Despite rising scepticism, organics posted a compound annual growth rate of 2% from 2012 to 2016. When economic conditions are good, UK consumers are willing to pay a premium for organic products. However, when the economy is unfavourable, UK consumers are more likely to cut back on purchases of organic products than on purchases of any other type of HW products such as fortified/functional and free-from products.

Retail sales of beverages and packaged food in the United Kingdom (Total beverages and packaged food), from 2012 to 2012
US$ billion – fixed exchange rate
Beverages and packaged food 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Total 97.9 100.3 101.0 101.3 102.1 1.1
Packaged food 79.8 81.5 82.0 82.0 82.4 0.8
Beverages 18.1 18.8 18.9 19.3 19.7 2.1
  • * CAGR - compound annual growth rate
  • Source: Euromonitor, 2017
Retail sales of beverages and packaged food in the United Kingdom (Total HW beverages and packaged food), from 2012 to 2012
US$ billion – fixed exchange rate
HW beverages and packaged food 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Total 25.7 26.5 26.9 27.4 28.1 2.2
HW packaged food 16.5 17.1 17.3 17.7 18.0 2.2
HW beverages 9.2 9.4 9.5 9.8 10.0 2.2
  • * CAGR - compound annual growth rate
  • Source: Euromonitor, 2017
Top ten organic retail markets, from 2012 to 2016
US$ million – fixed exchange rate
Country 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Market share
(%)
World 26,907.6 29,074.0 31,663.9 34,173.3 36,681.6 8.1
USA 11,745.4 12,660.3 13,821.3 14,985.9 16,083.3 8.2 44
Germany 3,579.1 3,718.6 3,835.5 3,946.3 4,070.5 3.3 11
France 1,963.7 2,118.7 2,298.6 2,466.5 2,641.8 7.7 7
China 834.1 1,209.6 1,623.0 2,039.4 2,499.8 31.6 7
United Kingdom 1,481.5 1,514.0 1,549.4 1,574.6 1,596.8 1.9 4
Italy 947.9 1,030.3 1,192.8 1,346.7 1,487.4 11.9 4
Canada 931.0 975.6 1,030.4 1,099.6 1,176.0 6.0 3
Sweden 503.6 541.1 625.0 720.9 798.5 12.2 2
Netherlands 563.8 619.5 663.1 705.4 747.0 7.3 2
Denmark 594.0 607.8 629.0 655.8 692.3 3.9 2
  • * CAGR - compound annual growth rate
  • Source: Euromonitor, 2017.

Market environment

The United Kingdom economy registered low real GDP growth of 1.8% in 2016 and is expected to grow by 1.0% in real terms in 2017, mainly due to uncertainty caused by Brexit (Euromonitor, 2017). Despite this uncertainty, consumers continue to spend on food and beverages considered beneficial to health.

Demand for organics has dampened in the past few years as consumers are unconvinced about the health benefits of organic products and are put off by their high unit prices. Owing to these factors, organic products such as beverages remain a niche market in the United Kingdom and are more likely to be affected by poor economic conditions.

According to Euromonitor, prospects of higher inflation are expected to lead to a more cautious approach towards spending among UK consumers over the early years of the forecast period. One of the key issues for the organic packaged food and beverages in the forecast period will be the way in which the United Kingdom negotiates its exit from the EU. It’s likely that sales of imported products could be affected in the long term as unit prices could increase while products from the EU may need to meet additional requirements imposed by local organizations before they can enter the domestic market (Euromonitor, 2017).

United Kingdom GDP per capita and real GDP growth, from 2013 to 2020

Description of this image follow.

Description of the above image
Period Real GDP growth GDP per capita
2013 1.90 36,737.50
2014 3.10 38,221.90
2015 2.20 38,958.20
2016 1.80 40,037.30
2017 1.40 41,141.30
2018 1.20 42,498.90
2019 1.40 43,974.00
2020 1.50 45,462.80

Retail sales

In 2016, organics recorded retail value sales of US$1.6 billion, a 1.4% increase from the previous year. From 2012 to 2016, retail sales of organics grew at a compound annual growth rate of 1.9%. However, there was a steady decline in the retail sales volume during the same period. As a result, organics posted a negative compound annual growth rate of 1.6% from 2012 to 2016. The decline in sales volume is expected to continue during the forecast period, affecting both organic packaged foods and beverages. In the forecast period, retail sales of organic packaged food and organic beverages are expected to grow at a compound annual growth rate of 3.2% and 2.5%, respectively.

In 2016, organic packaged food represented 86% of overall organic retail sales, while organic beverages made up 14%.

Historic retail sales of organics in the United Kingdom, from 2012 to 2016
US$ millions – fixed exchange rate
Organic 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Total 1,481.5 1,514.0 1,549.4 1,574.6 1,596.8 1.9
Organic packaged food 1,267.4 1,299.9 1,334.3 1,358.0 1,378.9 2.1
Organic beverages 214.1 214.1 215.1 216.6 217.9 0.4
  • * CAGR - compound annual growth rate
  • Source: Euromonitor, 2017
Forecast retail sales of organics in the United Kingdom, from 2017 to 2021
US$ millions – fixed exchange rate
Organic 2017E 2018F 2019F 2020F 2021F CAGR* (%)
2017-2021
Total 1,644.2 1,696.5 1,749.3 1,802.3 1,856.5 3.1
Organic packaged food 1,421.4 1,468.2 1,515.8 1,562.9 1,610.8 3.2
Organic beverages 222.8 228.4 233.5 239.4 245.7 2.5
  • E- Estimate
  • F-Forecast
  • * CAGR – compound annual growth rate
  • Source: Euromonitor, 2017
Historic retail sales volume of organics in the United Kingdom, from 2012 to 2016
thousands of tonnes
Organic 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Total 350.6 346.5 348.8 336.6 328.1 -1.6
Organic packaged food 307.4 304.1 306.6 294.3 285.8 -1.8
Organic beverages 43.2 42.4 42.3 42.3 42.3 -0.5
  • * CAGR - compound annual growth rate
  • Source: Euromonitor, 2017
Forecast retail sales volume of organics in the United Kingdom, from 2017 to 2021
thousands of tonnes
Organic 2017E 2018F 2019F 2020F 2021F CAGR* (%)
2017-2021
Total 323.0 319.9 317.8 316.3 315.5 -0.6
Organic packaged food 280.6 277.4 275.3 273.8 273.0 -0.7
Organic beverages 42.4 42.4 42.5 42.5 42.5 0.1
  • E- Estimate
  • F-Forecast
  • * CAGR – compound annual growth rate
  • Source: Euromonitor, 2017

Organic packaged food

Organic packaged food continued to record a positive sales value of US$1.4 billion in 2016. According to Euromonitor, this is due to the increase of independent suppliers who account for an increasing share of the market.

From 2012 to 2016, organic confectionery posted the highest compound annual growth rate (7.2%), followed by organic soup (4.8%) and savory snacks (4.6%). The organic dairy, baby food and confectionery sectors accounted for 67% of the value of organic packaged food sales in 2016. The organic baby food subcategory accounted for 23% of the overall baby food subcategory (which includes other HW and non-HW products), while the other organic packaged food subcategories accounted for a small portion (less than 5%) of the corresponding overall subcategories.

Although the organic packaged food category is expected to post positive growth during the forecast period, the negotiations related to the United Kingdom’s exit from the EU could present challenges for the category. The anticipated increase in prices of imported products could lead to a slowdown in the category in the long term.

Historic retail sales of organic packaged food in the United Kingdom, from 2012 to 2016
US$ millions – fixed exchange rate
Organic packaged food 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Total 1,267.4 1,299.9 1,334.3 1,358.0 1,378.9 2.1
Organic dairy 437.2 440.9 447.7 442.9 437.2 0.0
Organic baby food 245.9 262.2 272.7 281.8 290.4 4.2
Organic confectionery 148.2 160.9 173.6 185.4 195.5 7.2
Organic ready meals 72.1 73.4 73.9 74.6 75.7 1.2
Organic bread 62.5 57.1 52.6 50.8 49.5 -5.7
Organic soup 34.2 35.5 37.8 39.5 41.3 4.8
Organic sweet biscuits, snack bars and fruit snacks 37.6 38.5 39.8 38.9 39.6 1.3
Organic spreads 33.2 34.1 35.0 36.6 37.9 3.4
Organic breakfast cereals 32.1 32.9 33.7 34.8 36.0 2.9
Organic ice cream 32.4 32.2 32.2 33.3 34.3 1.4
Organic shelf stable meats, seafood, fruits and vegetables 30.6 31.2 32.5 33.2 34.1 2.7
Organic sauces, dressings and condiments 26.5 26.8 27.6 28.0 28.6 1.9
Organic rice, pasta and noodles 25.9 26.0 26.0 26.1 26.2 0.3
Organic chilled processed meat and seafood 21.5 20.3 20.7 23.1 22.9 1.6
Organic savoury snacks 11.1 11.4 11.9 12.5 13.3 4.6
Organic frozen meat, seafood, fruits and vegetables 9.3 9.5 9.6 9.6 9.5 0.5
Organic edible oil 7.0 6.8 6.8 6.8 6.9 -0.4
  • * CAGR - compound annual growth rate
  • Source: Euromonitor, 2017
Forecast retail sales of organic packaged food in the United Kingdom, from 2017 to 2021
US$ millions – fixed exchange rate
Organic packaged food 2017E 2018F 2019F 2020F 2021F CAGR* (%)
2017-2021
Total 1,421.4 1,468.2 1,515.8 1,562.9 1,610.8 3.2
Organic dairy 442.2 448.6 455.3 462.6 470.3 1.6
Organic baby food 302.1 314.7 327.2 339.7 352.5 3.9
Organic confectionery 206.9 219.2 232.2 244.9 257.6 5.6
Organic ready meals 77.2 79.4 81.9 84.6 87.4 3.2
Organic bread 49.6 50.0 50.7 51.5 52.4 1.4
Organic soup 43.5 45.6 47.6 49.3 50.7 3.9
Organic sweet biscuits, snack bars and fruit snacks 40.8 42.2 43.6 45.0 46.5 3.3
Organic spreads 39.4 40.9 42.2 43.4 44.4 3.0
Organic breakfast cereals 37.6 39.2 40.7 42.3 43.9 3.9
Organic shelf stable meat, seafood, fruits and vegetables 35.7 37.6 39.1 40.5 41.9 4.1
Organic ice cream 35.6 36.8 37.9 38.9 39.8 2.8
Organic sauces, dressings and condiments 29.6 30.5 31.4 32.3 33.0 2.8
Organic rice, pasta and noodles 26.6 27.1 27.5 27.9 28.4 1.7
Organic chilled processed meat and seafood 23.8 24.5 25.5 26.3 27.0 3.2
Organic savoury snacks 14.1 14.9 15.5 16.1 16.7 4.3
Organic frozen meat, seafood, fruits and vegetables 9.5 9.6 9.8 9.9 10.1 1.5
Organic edible oil 7.1 7.4 7.6 7.9 8.2 3.7
  • E- Estimate
  • F-Forecast
  • * CAGR – compound annual growth rate
  • Source: Euromonitor, 2017
Historic retail sales volume of organic packaged food in the United Kingdom, from 2012 to 2016
thousands of tonnes
Organic Packaged Food 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Total 307.4 304.1 306.6 294.3 285.8 -1.8
Organic dairy 222.0 220.6 223.9 211.3 202.0 -2.3
Organic baby food 15.6 16.3 16.6 16.8 17.0 2.2
Organic bread 20.2 17.6 15.6 15.0 14.6 -7.8
Organic soup 8.8 9.1 9.5 9.8 10.1 3.5
Organic shelf stable meat, seafood, fruits and vegetables 7.8 7.8 7.8 7.9 7.9 0.3
Organic ready meals 5.9 5.9 6.0 6.1 6.2 1.2
Organic confectionery 4.8 4.9 5.1 5.2 5.3 2.5
Organic sauces, dressings and condiments 4.1 4.1 4.2 4.3 4.4 1.8
Organic rice, pasta and noodles 4.3 4.2 4.1 4.1 4.1 -1.2
Organic breakfast cereals 3.0 3.0 3.0 3.1 3.2 1.6
Organic sweet biscuits, snack bars and fruit snacks 3.2 3.2 3.3 3.1 3.2 0.0
Organic spreads 2.6 2.6 2.6 2.7 2.8 1.9
Organic ice cream 1.6 1.5 1.5 1.6 1.7 1.5
Organic frozen meat, seafood, fruits and vegetables 1.5 1.5 1.5 1.5 1.5 0.0
Organic chilled processed meat and seafood 0.9 0.9 0.8 0.9 0.9 0.0
Organic savoury snacks 0.5 0.5 0.6 0.6 0.6 4.7
Organic edible oil 0.4 0.4 0.4 0.4 0.4 0.0
  • * CAGR - compound annual growth rate
  • Source: Euromonitor, 2017
Forecast retail sales volume of organic packaged food in the United Kingdom, from 2017 to 2021
thousands of tonnes
Organic packaged food 2017E 2018F 2019F 2020F 2021F CAGR* (%)
2017-2021
Total 280.6 277.4 275.3 273.8 273.0 -0.7
Organic baby food 17.2 17.4 17.7 17.9 18.1 1.3
Organic bread 14.4 14.2 14.1 14.0 13.9 -0.9
Organic breakfast cereals 3.3 3.4 3.4 3.5 3.5 1.5
Organic chilled processed meat and seafood 0.9 0.9 0.9 0.9 0.9 0.0
Organic confectionery 5.3 5.4 5.5 5.5 5.5 0.9
Organic dairy 196.1 192.0 189.1 186.8 185.3 -1.4
Organic edible oil 0.4 0.4 0.4 0.4 0.4 0.0
Organic frozen meat, seafood, fruits and vegetables 1.4 1.4 1.4 1.4 1.4 0.0
Organic ice cream 1.7 1.8 1.8 1.8 1.8 1.4
Organic ready meals 6.3 6.4 6.5 6.6 6.8 1.9
Organic rice, pasta and noodles 4.1 4.1 4.1 4.1 4.1 0.0
Organic sauces, dressings and condiments 4.4 4.4 4.5 4.5 4.5 0.6
Organic savoury snacks 0.6 0.6 0.7 0.7 0.7 3.9
Organic shelf stable meat, seafood, fruits and vegetables 8.1 8.3 8.5 8.6 8.7 1.8
Organic soup 10.4 10.6 10.8 10.9 11.0 1.4
Organic spreads 2.8 2.9 2.9 3.0 3.0 1.7
Organic sweet biscuits, snack bars and fruit snacks 3.2 3.2 3.2 3.3 3.3 0.8
  • E- Estimate
  • F-Forecast
  • * CAGR – compound annual growth rate
  • Source: Euromonitor, 2017

Organic beverages

Organic beverages remain a niche market in the United Kingdom. According to Euromonitor, UK consumers are unconvinced and put off by the high unit prices and shorter shelf life of organic beverages. As a result, the category continues to be threatened by other HW categories such as naturally healthy products. These products are positioned at lower unit prices and will be the main threat to organic beverages over the forecast period (2017 to 2021).

The category recorded a low compound annual growth rate of 0.4% from 2012 to 2016 and a retail sales value of US$217.9 million in 2016. By 2021, the retail sales value is expected to increase to US$245.7 million. Organic soft drinks, specifically fruit/vegetable juice and organic 100%, are the most popular subcategories, followed by organic tea.

Historic retail sales of organic beverages in the United Kingdom, from 2012 to 2016
US$ millions – fixed exchange rate
Organic beverages 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Total 214.1 214.1 215.1 216.6 217.9 0.4
Organic fruit/vegetable juice 116.7 115.1 115.6 116.3 116.5 0.0
Organic tea 42.5 42.1 41.7 41.3 41.1 -0.8
Organic concentrates 25.7 27.5 28.5 29.7 31.0 4.8
Organic coffee 16.6 16.6 16.1 15.9 15.8 -1.2
Organic other hot drinks 12.6 12.9 13.2 13.3 13.5 1.7
  • * CAGR - compound annual growth rate
  • Source: Euromonitor, 2017
Forecast retail sales of organic beverages in the United Kingdom, from 2017 to 2021
US$ millions – fixed exchange rate
Organic beverages 2017E 2018F 2019F 2020F 2021F CAGR* (%)
2017-2021
Total 222.8 228.4 233.5 239.4 245.7 2.5
Organic fruit/vegetable juice 118.8 121.2 123.1 125.6 128.3 1.9
Organic tea 41.5 42.1 42.8 43.6 44.5 1.8
Organic concentrates 32.7 34.4 36.2 38.0 39.8 5.0
Organic coffee 16.0 16.3 16.6 17.0 17.5 2.3
Organic other hot drinks 13.9 14.3 14.8 15.2 15.7 3.1
  • * CAGR - compound annual growth rate
  • Source: Euromonitor, 2017
Historic retail sales volume of organic beverages in the United Kingdom, from 2012 to 2016
thousands of tonnes
Organic beverages 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Total 43.2 42.4 42.3 42.3 42.3 -0.5
Organic fruit/vegetable juice 33.4 32.5 32.2 32.0 31.9 -1.1
Organic concentrates 6.2 6.4 6.7 7.0 7.2 3.8
Organic tea 2.5 2.3 2.2 2.1 2.0 -5.4
Organic other hot drinks 0.6 0.6 0.6 0.7 0.7 3.9
Organic coffee 0.5 0.5 0.5 0.5 0.5 0.0
  • E- Estimate
  • F-Forecast
  • * CAGR – compound annual growth rate
  • Source: Euromonitor, 2017
Forecast retail sales volume of organic beverages in the United Kingdom, from 2017 to 2021
thousands of tonnes
Organic beverages 2017 2018 2019 2020 2021 CAGR* (%)
2017-2021
Total 42.4 42.4 42.5 42.5 42.5 0.1
Organic fruit/vegetable juice 31.8 31.7 31.5 31.4 31.2 -0.5
Organic concentrates 7.5 7.7 7.9 8.1 8.3 2.6
Organic tea 2.0 1.9 1.8 1.8 1.7 -4.0
Organic other hot drinks 0.7 0.7 0.7 0.7 0.7 0.0
Organic coffee 0.5 0.5 0.5 0.5 0.5 0.0
  • * CAGR - compound annual growth rate
  • Source: Euromonitor, 2017

Distribution channels

Modern grocery retailers continued to be the leading distribution channel for organic products in 2016. Supermarkets and hypermarkets led the way with a 68% share of the sales value, followed by independent small grocers with a 12.9% share and internet retailing with a 6.7% share. Although organic sales continue to grow in grocery stores, the increase in independent suppliers (that is, flea markets) and the broadening of retail channels such as online shopping are boosting sales of organic products in the United Kingdom.

Distribution channels of organic product sales in the United Kingdom, from 2012 to 2016 (Total)
US$ million – fixed exchange rate
Channels 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Market share
(%)
Total 1,481.5 1,514.0 1,549.4 1,574.6 1,596.8 1.9
Store-based retailing 1,436.6 1,450.2 1,474.8 1,481.3 1,489.0 0.9 93.2
Non-store retailing 44.8 63.8 74.6 93.2 107.8 24.5 6.8
Source: Euromonitor 2017
Distribution channels of organic product sales in the United Kingdom, from 2012 to 2016 (Store-based retailing channels)
US$ million – fixed exchange rate
Store-based retailing channels 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Market share
(%)
Total 1,436.6 1,450.2 1,474.8 1,481.3 1,489.0 0.9 93.2
Grocery retailers 1,413.6 1,428.3 1,453.5 1,461.6 1,470.1 1.0 92.1
Non-grocery specialists 23.0 21.8 21.2 19.7 18.9 −4.8 1.2
Source: Euromonitor 2017
Distribution channels of organic product sales in the United Kingdom, from 2012 to 2016 (Non-store retailing channels)
US$ million – fixed exchange rate
Non-store retailing channels 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Market share
(%)
Total 44.8 63.8 74.6 93.2 107.8 24.5 6.8
Vending 0.5 0.6 0.5 0.4 0.4 −5.4 0.0
Internet retailing 44.0 63.0 73.8 92.5 107.1 24.9 6.7
Direct selling 0.3 0.3 0.3 0.3 0.3 0.0 0.0
Source: Euromonitor 2017
Distribution channels of organic product sales in the United Kingdom, from 2012 to 2016 (Grocery retailer channels)
US$ million – fixed exchange rate
Grocery retailer channels 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Market share
(%)
Total 1,413.6 1,428.3 1,453.5 1,461.6 1,470.1 1.0 92.1
Modern grocery retailers 1,127.5 1,151.3 1,180.2 1,199.1 1,209.2 1.8 75.7
Traditional grocery retailers 286.2 277.0 273.4 262.5 260.9 −2.3 16.3
Source: Euromonitor 2017
Distribution channels of organic product sales in the United Kingdom, from 2012 to 2016 (Modern grocery retailer channels)
US$ million – fixed exchange rate
Modern grocery retailer channels 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Market share
(%)
Total 1,127.5 1,151.3 1,180.2 1,199.1 1,209.2 1.8 75.7
Convenience stores 61.6 63.4 65.4 66.9 67.2 2.2 4.2
Discounters 32.5 33.3 34.4 35.4 37.3 3.5 2.3
Forecourt retailers 20.0 20.8 21.5 21.8 21.4 1.7 1.3
Hypermarkets 506.0 518.3 532.6 540.3 541.7 1.7 33.9
Supermarkets 507.5 515.6 526.2 534.7 541.5 1.6 33.9
Source: Euromonitor 2017
Distribution channels of organic product sales in the United Kingdom, from 2012 to 2016 (Traditional grocery retailer channels)
US$ million – fixed exchange rate
Traditional grocery retailer channels 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Market share
(%)
Total 286.2 277.0 273.4 262.5 260.9 −2.3 16.3
Independent small grocers 232.6 222.0 222.5 212.3 205.8 −3.0 12.9
Other grocery retailers 53.6 55.0 50.9 50.2 55.1 0.7 3.5
Source: Euromonitor 2017

Competition

In 2016, private-label products made up 33% of the total value sales of organic products. They recorded a slight decrease in growth with a compound annual growth rate of 0.8% (2012 to 2016) as bigger brands maintained or increased their share slightly after their unit prices were lowered (Euromonitor, 2017). However, private labels continue to account for the largest share of the organic market and cover the majority of organic packaged food categories, especially the processed meat and seafood categories, where they have a greater presence (Euromonitor, 2017).

According to Euromonitor, Belvoir Fruit Farms maintained a leading position in the organic beverages category in 2016. The company’s products continued to grow in popularity and benefited from an expanded distribution network, including delicatessens, farm shops, wholefood stores and food halls around the United Kingdom (Euromonitor, 2017). Hipp UK and Ella’s Kitchen were the two leading players in the baby food category (Euromonitor, 2017).

In the review period (2012 to 2016), UK consumers showed a preference for domestic organic products. This is attributable to recent food scandals (that is, horsemeat scandal) and lower pricing of domestic products (Euromonitor, 2017).

Top ten organic companies and their retail sales in the United Kingdom, from 2012 to 2016
US$ million – fixed exchange rate
Companies 2012 2013 2014 2015 2016 CAGR* (%)
2012-2016
Market share
(%)
Mondelez International Inc 115.5 121.6 130.0 140.4 145.7 6.0 9.1
Hipp GmbH & Co Vertrieb KG 90.3 89.0 94.1 98.0 100.4 2.7 6.3
Hain Celestial Group Inc, The N/A 69.9 73.8 84.3 89.8 N/A 5.6
Hero Group GmbH 64.0 66.7 68.5 71.6 73.1 3.4 4.6
Yeo Valley Farms (Production) Ltd 57.2 61.4 65.8 66.9 67.5 4.2 4.2
Belvoir Fruit Farms 11.0 13.6 16.0 18.2 20.1 16.3 1.3
Associated British Foods Plc 15.3 16.3 17.0 17.6 18.4 4.7 1.2
James White Drinks Ltd 14.5 14.9 15.4 16.3 17.1 4.2 1.1
Kraft Heinz Co N./A N/A N/A 14.5 14.2 N/A 0.9
Mars Inc 15.7 15.3 15.4 14.1 13.5 -3.7 0.8
Artisanal 20.9 18.5 17.2 16.3 16.1 -6.3 1.0
Private Label 543.4 536.7 532.6 529.0 527.2 -0.8 33.0
  • N/A – data not available
  • * CAGR – compound annual growth rate
  • Source: Euromonitor, 2017

Packaging

According to Euromonitor, in order to justify the higher unit prices and differentiate their products from conventional products, organic producers are creating a high-end image for their products, especially for organic beverages. They are using a number of strategies, such as bright, eye-catching packaging graphics and a variety of materials suggesting a fresh, clean, and natural image. In addition, organic producers are emphasizing product sustainability, ingredient source, and packaging recyclability. Over the last five years, convenient packaging, hormone-free, and caffeine-free have been the fastest growing claims used on organic products in the United Kingdom (Mintel, 2017).

New product launch analysis

Number of organic product launches in the United Kingdom, from 2012 to 2016

Description of this image follow.

Description of the above image
Date published Number of products launched
2012 505
2013 499
2014 614
2015 805
2016 811
Source: Euromonitor, 2017

From 2012 to 2016, around 3,234 organic products were launched in the United Kingdom. There were 2,671 product introductions in the food category, 508 in the beverage category and 55 in the pet foods category. Within the food category, baby food, dairy, and snacks were the top packaged food subcategories. In the beverage category, the hot beverages (such as tea), juices, and other beverages (such as concentrates/meal replacements) subcategories saw the most launches. In the pet food category, most of the launches occurred in the dog and cat wet foods subcategories.

Over the five-year review period, 50% of the organic product introductions occurred between 2015 and 2016. On average, based on five years of data, 647 organic products were introduced each year in the United Kingdom. According to the Mintel Global New Products Database, 75.7% of the organic products introduced in the United Kingdom were new products and 24.3% were re-launched products.

Top organic products launch categories in the United Kingdom, from 2012 to 2016

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Category Number of products
Baby food 421
Dairy 295
Snacks 283
Bakery 274
Sauces and seasonings 273
Hot beverages 235
Side dishes 216
Chocolate confectionery 207
Juice drinks 133
Processed fish, meat and egg products 131
Source: Euromonitor, 2017
Organic product categories and top three subcategories by number of product launches, from 2012 to 2016
Category Product introductions Top 3 Subcategories Number of products
Packaged food 2,671 Baby food 421
Dairy 295
Snacks 283
Beverages 508 Hot beverages 235
Juice drinks 133
Other beverages 32
Pet food 55 Dog food wet 26
Cat food wet 16
Dog snacks and treats 7
Source: Mintel, 2017

Opportunity for Canada

An important factor that will have a positive effect on Canadian organic exporters’ competitiveness in the United Kingdom is the Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

CETA will help provide opportunities for Canadian producers, processors and exporters to reach the EU's 510 million consumers.

It can support you by:

Find more details: Canada-European Union Comprehensive Economic and Trade Agreement for Agri-Food Exporters

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found on International Market Intelligence arranged by region:

For additional information on ANUGA 2017, please contact:

Ben Berry, Deputy Director
Trade Show Strategy and Delivery
Agriculture and Agri-Food Canada
ben.berry@canada.ca

Related reports

Resources

Health and Wellness Series: Organic trends in the United Kingdom - Global Analysis Report

Prepared by: Ranna Bernard, Market Analyst

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2017).

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