Organic milk offers a chance to add value to the declining milk category but needs more support at retail, claims dairy co-op Omsco.
The group’s Organic Milk Market Report, published this week, reveals sales of organic milk have risen 6.4% to £151.3m on 0.3% volume growth, while standard milk has fallen 1.6% to £2.7bn as volumes dropped 0.5% [Nielsen Scantrack 52 w/e 3 September 2014].
The report added the average price of a litre of organic milk had risen 4.8% while standard milk had dropped 4% over the same period [Nielsen] - shifting the premium for organic over standard from 28% to 41% per litre.
Organic was “good for business and good for the category,” said Omsco COO Richard Hampton, but he warned availability and promotion would be key to further growth.
“This has to be the primary point of interest for the retail sector,” he added. “If shoppers don’t see organic milk available with the fat profile they want, they will often trade down to conventional milk. Devoting extra shelf space, ensuring availability and more promotional activity would boost sales and profitability even more.”
Market-leading organic milk brand Yeo Valley said the increase in category sales was evidence consumers continued to value the benefits of organic food. “It is also reassuring that many consumers are prepared to pay a little more to support organic milk,” added a spokeswoman.
But with organic milk sales representing less than 5% of total milk sales, the British Retail Consortium warned retailers would not undertake a dramatic shift in policy towards wider availability of organic milk.
“Retailers will continue to respond to changes in consumer demand,” said director of food and sustainability Andrew Opie.