Each recession is different and as Britain emerges from the latest incarnation, we have questions for the organic food sub-sector.
This recession was initially distinguished by geography, being mainly a white collar, home counties affair. However, it wasn't long before the tentacles of tightening economic activity spread into the more vulnerable and dependent regions of the nation.
GDP data from the last quarter of 2009 showed that Britain emerged from the recession with 0.3% growth. While we cannot rule out a double-dip profile, where a short recovery is followed by another recession, we feel it is more likely the economy will continue to grow albeit sluggishly in 2010.
One key differentiating element of this recession was the way the south of England embraced, for a period at least, deep discount retailing, value-based superstores and the long-forgotten virtues of ambient and frozen food. While these sectors boomed, the organic sub-sector suffered. Having been in several years of growth before the recession, it suddenly witnessed a structural growth trends reverse.
Encouragingly, perhaps, the return to economic growth is bringing with it a normalisation of trading conditions. Waitrose is booming, deep discounters slowing. Fresh and chilled lines are regaining share from ambient and frozen.
However, what of specialist, premium, organic food? We sense that the outlook is brightening, but possibly at a slower rate than is the case for mainstream lines. In particular, we believe that the 'value' of organic food has been materially tested in the eyes of many consumers by the recession and this has led to a reduced demand.
Indeed, when it comes to products associated with the environment, there seems to be a more complex marketing challenge than there is for foods that rely on their taste, indulgence, personal well-being and even animal welfare credentials. This barrier will have to be overcome if participation is to move beyond niche and into the mainstream.
This raises questions about price, production costs, organisation and marketing strategies, which the organic movement will have to confront if the pre-recession period is not to be its zenith. One senses there is considerable work to be done on all counts.
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