Large fresh produce companies diversifying into organics pose a threat to specialist fruit and veg suppliers in the sector, according to Organic Monitor.
The organic food industry analyst said supermarkets were encouraging their preferred fresh produce suppliers to branch out into organics.
It claimed that their strong, established relationships and distribution networks could mean smaller, dedicated organic suppliers were squeezed out.
Organic Monitor director Amarjit Sahota said: “This development has been due to supermarkets preferring to source from as few companies as possible.”
She said organic fresh produce companies should limit the threat by entering strategic alliances with other suppliers and spreading business risk across different sectors.
Organic Monitor said that supermarkets accounted for 48% of organic fruit and vegetable sales in Europe, but their market share was declining as volumes sold through professional box scheme operators, organic food stores and foodservice companies grew.
Britain’s organic fruit market, valued at €330m, is the biggest in Europe. But Organic Monitor warned that the 14% increase in land in western Europe devoted to organic production did not match the 26% growth in sales of organic fruit and veg.
Greg Meenehan