Supply and demand of organic food: fruits and vegetables



Demand and Supply of Organic Food in UK

In recent years the size of the retail market for organic foods in the United Kingdom has grown very significantly from about £ 275 million during 1997 to £ 350-385 million during 1999. In 2000, the market has been between 600 million pounds and 700 million pounds. Although the market has experienced rapid growth, it is important to place the dimension in the context of the market for food and beverages. In the UK, the organic market represents, on average, about 1 percent of the total food market, although this varies by sector (tending to be higher in the baby food sector, followed by fruits and vegetables, and lower in the field of livestock / meat). For fruits and vegetables, in 1999 the market value of the UK was around £ 165 million (at retail level), or about 40 percent of the total market for organic food and beverages.

The production of organic products in the UK has followed a similar pattern to the growth of market size. In late 2000, there were 472 500 hectares of land devoted to organic production and transition (equivalent to about 2.5 percent of the total agricultural area). This compares with an area of only 50 000 hectares in 1996. However, this rapid expansion of production has not kept pace with demand, since organic product sales increased at a faster rate than domestic supply. Consequently, most of the organic products consumed in the UK are imported (about 75 percent).

The total organic market

In 1999, the fruit and vegetable market in the UK was valued at around 165 million pounds (retail) (Source: Datamonitor), although it is likely that at the end of 2000 the figure was significantly higher. Regardless of the size of the market, fruits and vegetables make up the largest subgroup within the total organic food industry, which currently accounts for about 40 percent of the total market for organic food and beverages from the UK.

UK organic sales by outlets

As for distribution, fruit and vegetable trade in the UK is very different from that of some European countries because it has its main channels are supermarkets and home sales rather than through health food business. The supermarkets are supplied prepackaged products supplied by companies specializing in organic products have distribution networks nationwide, many of which have their own refrigerated transport vehicles. Consequently, specifications are rigorous and the range available has led to products with lower premiums, such as potatoes, carrots, turnips from Sweden, and cabbage.

The main supermarket chains control retail sales of organic products, with about 70 percent of total sales in April 2000. This percentage of supermarkets has been increasing in recent years, from 63 percent recorded, for example, in April 1998. The other main outputs are the direct sales made by independent retailers and health food business, which accounted for 16 percent of farm sales plans / subscription in April 2001 and placed on the market (including markets ...