Processed food driving demand for organic meat ingredients

The fastest growing segment of the UK organic food industry for a number of years; today, this represents the second largest organic meat market in the world, with sales increasing by 139 per cent between 2001 and 2004. A mix between increasing demand for high quality meats, together with taste and ethical concerns are the key motivations driving growth, claim Organic Monitor , authors of the report. "Supermarkets continue to dominate with 72 per cent market share, however their market share is in decline. Increasing volume is going to other channels; specialist retailers, food processing, direct marketing and the catering sector," say the market analysts. According to their figures, the increase in organic food processing activity has boosted demand for organic meats to an extent that over half of domestically produced organic pork goes into processed foods. The surge in demand has been particularly evident in organic sausages, ready-meals, and baby food, say the authors, with rising requests from restaurants, schools, hospitals and government buildings. Although sales volume has expanded considerably, the market share of organic meats remains below 4 per cent in most retailers. Organic meats are mostly marketed under supermarket private labels, which account for over 80 per cent of fresh cut sales. Brands are more evident on organic processed meats. Organic products have become more accessible to the masses thanks greatly to the stronger role of grocery multiples in the market. Large supermarket and hypermarket chains, have introduced both branded products and their own-label lines on the shelves. Multiples are now the most important distribution channel for organic food and non-alcoholic. But despite their dominance, with 72 per cent market share in the UK, the report suggests their share is in decline. "Increasing volume is going to other channels; specialist retailers, food processing, direct marketing and the catering sector," says the report. The organic poultry market has the highest growth, expanding by over 20 per cent per year, predicted to continue in this vein in the coming years. Barriers to growth for organic meats are still linked to supplies, that remain fragmented, and impacted by consolidation in the conventional meat sector. "Although there has been a large rise in organic meat production since 2001, inefficient supply chains and lack of finishing units have caused significant volume to go into the conventional meat market. Other restraints to market growth include the high price premium and competing meat products," reports Organic Monitor. Topping up supplies, imports into the UK remain "important", hitting about 20 per cent of total sales volume. Supermarket sourcing policies are responsible for conventional meat companies dominating the supply of organic meats. But imports remain important, representing about 20 per cent of total sales volume with products coming into the UK," writes Organic Monitor . Organic production has grown steadily over the last 20 years. In 1985, just 100,000 hectares of EU farm land was certified organic - less than 0.1 per cent of total farm land. By the end of 2002, this figure had risen to 4.4 million ha or 3.3 per cent of total farm land with market worth around €10 billion. Data from Mintel shows, to date, a total of 93 new organic food products have been launched in Europe since the beginning of the year.

Processed food driving demand for organic meat ingredients

Opportunities are ripe for food manufacturers using organic meat ingredients, with a new report revealing the volume of organic meat ingredients used in processed foods is starting to take market share away from supermarkets,writes Lindsey Partos.

Related Topics