Organic is taking a battering as consumers try to cut their costs. But a principled core of shoppers will see Abel & Cole through the recession, Duncan Gibson tells Peter Cripps

When it comes to consumer trends, it wasn't long ago that online organic box scheme business Abel & Cole was ticking all the right boxes.

Riding on the wave of all things sustainable, healthy, local and ethical, the west London-based business, which delivers to most of the English mainland, posted a whopping 40% sales increase, to £27.9m, in the year to August 2007. Not bad for a company that began life 21 years ago with four people selling potatoes door-to-door.

But the world has changed. Since the economy started nosediving, growing evidence has suggested shoppers no longer want to pay that bit extra for organic.

A recent TNS survey shows that in the year ending 27 January 2009, sales of organic bread were down 29% by volume, fruit was down 20% and vegetables down 8%. And it's a declining market in which Abel & Cole has to compete with numerous organic box schemes from the multiples and main rival Riverford Organics, which posted sales of £33m last year and is continuing to expand with plans for a new restaurant in south London.

Managing director Duncan Gibson concedes that the current trading environment is "not as easy" as he would like. Yet he remains confident Abel & Cole's hard core of principled shoppers will see it through the recession. "Consumers remain very concerned about animal welfare and the environment," he says.

Abel & Cole sources 75% of its food from the UK, and only from suppliers that meet its strict ethical standards. It also takes pride in running its delivery vans on biodiesel and reusing and recycling the boxes it uses to deliver goods.

Although sales of fruit and veg boxes have plateaued, Gibson says sales overall remain in single-digit growth. Sales of chilled products, such as milk, meat, fish and cheese, delivered in polystyrene boxes, are on the up, as are "pantry goods" such as jams, pasta and tins.

The company's robust sales give credence to Gibson's view that his 40,000 to 50,000 customers will not waver in their commitment to organic food. Meanwhile, further lines have recently been added, bringing the total to 800 - nearly as many as a discounter such as Aldi would stock. Abel & Cole now provides ready meals, pizzas and desserts, which are all doing well, according to Gibson.

"Those customers who have been with us for more than three months continue to increase their spend, and that's the most important measure," he says, defending its recent decision to introduce a 99p charge for deliveries, which were previously free.

"It's a small price to pay for the quality of food we offer. Our prices remain very competitive and we have only had one price rise in four years. We have not shown anything like the food inflation seen in the supermarkets and our vegetables are actually cheaper than supermarket organic lines."

Factors Gibson will no doubt be keen to push, not just to his established customer base, but to all who remain committed to organic in the downturn.