The Organic Trade Board aims to tackle faltering sales with an ambitious commercial plan. Richard Ford asks what the body has in mind
It's been a rough year for the organic sector. In April, the Soil Association published a report showing that the category's perennial growth had ground to a juddering halt. That was followed in July by a damaging FSA report discrediting the notion that organic foods were nutritionally superior to conventionally produced goods.
In the circumstances, the Organic Trade Board's launch this week of Go for Growth a plan to grow the market by 50% over the next five years, from £2.1bn to £3.1bn should be as welcome to some eyes as it will seem far-fetched to others.
Can this fledgling trade body really be the saviour of the organic food industry?
Funded by organic brands, large and small, such as Green & Black's and organic babyfood brand Organix and also, notably, involving Tesco on the retail side the OTB was formed in July 2007 when a number of industry stakeholders identified a need for a trade-focused body to represent the industry. Whereas the Soil Association's role is to certify and campaign on behalf of the organic farming industry, the OTB's role is more commercial, according to its chairman, Huw Bowles. "It's about turning the campaigning vision into practical business solutions," he says.
The OTB has already secured £200,000 of funding in support of the campaign, and is hoping that a conference last Tuesday will have inspired further support, boosting that figure to £500,000. It will then apply to the EU for match-funding to increase the pot of money available to £1m.
So what will it do with all the money? Details of how the campaign will work in practice are still being drawn up, but the OTB says it will involve more consumer marketing, getting more retailers on board and working more closely together.
In the past, the industry has worked in a very individual way, says Bowles. "What we've got here is commercial organisations coming together and putting a commercial angle on things."
Bowles highlights generic campaigns in other European countries, such as France and Denmark, that succeeded in growing the organic market. As a result, Danish consumers now spend 80 a year per capita on organic products compared with just 47 in the UK, for example.
Organic Denmark, which is responsible for promoting organic produce in Denmark, says initiatives whereby organic brands come together to promote a common cause have been vital to the success of the organic market over there. However, it warns it is crucial that marketing activity is backed up with retailer support. "When people know about organic food, they also need to see it in stores so they can buy it," says a spokesman.
The multiples are currently reviewing their approach to the category, Bowles claims, after some reined in their organic offer when the recession bit towards the end of last year. "Some of the retailers realise they cut back too far and lost organic customers to other stores," says Bowles, claiming two major retailers recently applied for membership of OTB and pointing to Waitrose's exclusive deal with Duchy Originals as evidence of a resurgence in retailer confidence in organics. Meanwhile, Tesco, currently the only major multiple signed up to the OTB, cemented its commitment to grow the organic category at the conference.
Compelling or hair-brained?
"This isn't a hair-brained scheme, it's a well researched business plan and definitely one we can execute," adds Anna Rosier, MD of Organix.
And the initiative is given credibility by the fact it has been drawn up by experienced industry players who have treated it like a properly formulated business plan rather than amateur eco-warriors' well-intended efforts, Rosier believes.
Green & Black's senior brand manager Natalie Brown adds that the timing for its launch couldn't be better. "It's a really strong time to do this as we come out of recession and consumers re-evaluate what they are buying again."
Unfortunately, consumers aren't just re-evaluating what they're buying, but why they're buying it. The timing of the FSA paper, which dismissed the notion that eating organic was healthier than conventionally produced food, was as unfortunate as it was widely reported. Bowles is defiant on the subject of health, however. "We dispute the FSA's conclusions," he says.
A similar study into organic's health benefits published this month by AFSSA [the French equivalent of the FSA], drew the opposite conclusions, and there have been 31 other European Union studies and 100 scientific papers published at a cost of 18m showing the positive health benefits of organic food production. "Even the FSA acknowledges there are higher levels of nutrients in organic milk," he adds.
The FSA's study dismisses 28% higher levels of beneficial polyunsaturated fatty acids in dairy and meat; and higher levels of beta-carotene (54%), flavonoids (38%), protein (12.7%) as well as increases in other trace elements across all organic produce, as statistically insignificant.
The campaign will not only communicate the benefits of organic to health but also to the environment and animal welfare
It's a high-risk strategy. Much of the criticism of the way organic has been marketed is that it has attempted to encompass too many messages. Russell Smart, founder of 3V Natural Foods Group, which owns the Rocks Organic and Meridian brands, accepts that the breadth of the principles encompassed within the term organic have resulted in its core messages diverging. "Someone who's selling milk or meat will extol the virtues of animal welfare, someone who's selling chocolate bars will concentrate on taste or quality," he says. But Rosier argues the diversity of the principles it stands for is what makes organic such a good sell. "That's how you get so much value from organic," she says.
That said, Smart believes it can do no harm to draw those messages together and re-package them. "A structured marketing campaign will help to simplify the various messages for the consumer again, and put those messages in a new and interesting format for them."
Bowles remains confident that the task ahead, and in particular the board's £3.1bn target, is achievable. After all, he says the figure is based on discussions with OTB members as to what their future aspirations and capabilities for the growth of the organic sector are.
Nevertheless, he concedes that the target is ambitious. "There is an element of a stretched target there as there is with all targets. It's bottom up, not top down."
Organic Trade Board members
Green & Blacks
Grove Fresh Organic
Organic Spirits Co.
Organic Farm Foods
Alvis Bros Ltd
This Is Organics
Crazy Jack Organic
Graig Farm Organics