The Soil Association is advising consumers to save money on organic food by spurning the supermarkets – using box schemes, co-ops and farmers’ markets instead.

In an apparent u-turn for the association, policy director Peter Melchett said organic food could be a low-cost option. In previous years it had focused on taste, sustainability and health benefits, telling consumers to recognise that sustainable production had higher costs. But with widespread reports of falling organic sales, Melchett argued the price differential was closing due to increased (non-organic) fertiliser costs.

Independent organic suppliers’ and retailers’ costs were lower because of fewer middlemen in the supply chain, Melchett added. “I think organic’s premium image is a media invention, particularly from people who don’t eat organic. Ikea’s restaurants, which could hardly be called posh, use organic ingredients and have a totally organic menu option.”

Savings using Riverford’s boxes
Large veg box - 51% 
Fruit & veg box - 46% 
Fruit box - 25% 
Mini fruit & veg box - 25% 

Source: Riverford study 4 August 2008.

Notes: price compared with equivalent produce from Tesco, Sainsbury’s and Waitrose. Short-term deals not included. Delivery charges also excluded.
The association used data from vegetable box supplier Riverford to support its claim that the supermarkets’ organic offer was more costly. Riverford compared prices from Tesco, Sainsbury’s and Waitrose to the price of its vegetable boxes, and found Riverford was, on average, 22% cheaper. “This research dispels the myth that organic is hugely premium,” said Riverford analyst Nicky Morgan.

However, Morgan admitted the supermarkets were becoming more competitive as Asda reported 25% growth in organic sales in the past three months against a market that had fallen 23% since its high point in February [TNS]. Organic sales are also up in the past year at Morrisons, where 100 own-label organic products have been reduced by 25% over Organic Fortnight, which runs until 21 September.

An Asda spokeswoman said: “As well as an increase of 10% in AB households at Asda, we’re the place for affordable organics.”

Simon Wright, founder of organic specialist O&F Consulting, added: “Asda and Morrisons took a long time to wake up to organic, so on one level it is just reclaiming its rightful share,” he said. “But Asda took a very thoughtful approach to pricing. It is selling a lot of grade 2 produce – perfect in all but appearance. This means it can use the whole crop produced, and sell at a lower price.”

But Melchett accused supermarkets of forcing non-organic suppliers to also supply organic produce in a cross-subsidy deal.

“Farmers who supply non-organic are told to reserve an area of their farm for organic to keep their contracts,” he said. “In several areas, the premium paid for organic doesn’t reflect increased costs, so farmers are making less on their organic offer than conventional crops.”