UK: Organic food and drink sales slump

Source: businessgreen.com

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Overall sales of 'ethical' goods and services – from produce to transport and funerals – rose by nine per cent despite decline in organic food, according to the Co-operative

Sales of organic food and drink slumped by 10 per cent to £1.53bn last year as shoppers opted for cheaper alternatives, according to a new report.

But despite the impact of the economic downturn, overall sales of "ethical" goods and services - ranging from food and drink to transport and funerals - were generally resilient, increasing by almost nine per cent last year to £46.8bn from £43bn.

The Co-operative Group's annual report into ethical consumerism showed the biggest increases were in sales of small scale "micro-generation" products such as solar thermal and solar photovoltaic panels and heat pumps (up by 386 per cent), and "green" cars (up 129 per cent).

Other sectors enjoying huge growth are Fairtrade food and drink, which pay a premium to farmers and producers in poor countries to help them work their way out of poverty, which recorded a rise of more than a third (36 per cent). Sales of fish from sustainable sources grew by 16.3 per cent, and expenditure on green funerals leaped by 35 per cent to £6.9m from £5.1m.

The report has been compiled since 1999 when annual ethical sales were just £13.5bn, and analyses sales data for sectors including food, household goods, travel and ethical finance. It is based on national data covering spending through all retailers rather than just from the Co-operative's own outlets.

The slump in sales of organic food means they have plummeted by 23 per cent from an all-time high of almost £2bn in 2008.

Charitable donations have remained surprisingly stable during the downturn, with consumers giving £3.6bn to environmental, social and animal welfare causes. And the value of money in ethical savings and investments increased by nine per cent in 2010 to £21.2bn. This includes £9bn in ethical bank deposits as well as £11.3bn in ethical investments.

Surprisingly, the use of public transport for ethical reasons has fallen back seven per cent to £521m, while sales of green cars have surged to £846m, more than double the 2009 value, while spending on bicycles is up to £698m.

Paul Monaghan, head of social goals at the Co-operative, said: "The report shows that intervention by enlightened businesses, together with regulatory intervention, is driving ethical sales growth.

"During the downturn we've seen some of the biggest ever Fairtrade conversions, be it in chocolate or sugar, and business is beginning to respond to the challenge to provide consumers with more sustainable products and services such as fish, palm oil and soya.

"Ethical consumers are still a vitally important barometer of change. However, the actions of progressive business are now a significant contributor to sales growth."

Monaghan took a swipe at the government for slashing the value of incentives for the national feed-in tariff programme: "Ultimately, over and above the efforts of responsible business and ethical consumers, sustainable solutions require a government committed to long-term intervention, such as an effective feed-in-tariff programme, to maintain the economic viability of the micro-generation market."

This article first appeared at the Guardian

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