As things stand there will also be a requirement for pullets to be fully organic. The current derogation for part-organic pullets is due to expire on December 31 this yearThe year ahead could well be another testing one for organic egg producers. The recession has already hit organic egg sales. With the coalition Government’s austerity measures likely to put further strain on many family budgets during 2011, producers may find it difficult to persuade consumers to trade up to organic.
We love organic campaign advertsSales of most organic produce have suffered in recession, but eggs have been hit particularly badly. Latest available packing station figures show a continuing decline in organic eggs – the number packed in the third quarter of 2010 was 226,000 cases compared to 244,000 cases in the same period of 2009. And whilst the Soil Association sees some signs of optimism in certain organic sectors, it believes that the market will continue to be difficult for organic eggs and the organic poultry sector generally.
"The organic egg and poultry sector does continue to struggle and although 2011 looks brighter for organic sales in general, there are still major challenges for eggs and poultry," said Finn Cottle of the Soil Association.
Organic Farmers and Growers are also expecting another difficult year. "Without doubt 2011 is going to see the organic poultry sector wrestling with some challenges - not that it hasn’t had its fair share of tests already in recent years," said chief executive Richard Jacobs. His concerns are not only about the difficulty in persuading consumers to buy organic, but also about the much stricter rules under which organic egg producers may have to operate in future.
Richard Jacobs said, " 2011 is going to be dominated by the pressures of moving towards tightening standards. The 1st of January 2012 will see a requirement for 100 per cent of agricultural ingredients in poultry feed to be organic. There has been much debate about this and many are still worried about the ability to get enough protein density into the rations at this level. Unless the current derogation is extended (and there is currently no indication either way on that) preparations need to be made - including with regard to budgets in this time of rising input costs," he said.
As things stand there will also be a requirement for pullets to be fully organic. The current derogation for part-organic pullets is due to expire on December 31 this year. The only options will be fully organic pullets (raised to the organic standard from hatching) or up to three-day-old non-organic chicks being reared on the finishing sites. Richard says that some of the bigger poultry producers are gearing up for this, with their own rearing units, but says that will not be an option for many other farms.
"Unfortunately we are in limbo.
Traditional pullet rearers won’t even think about investing in the necessary changes until they know the standards are concrete - and with various representations being made to the EU who knows when there will be a final decision," he said. "The UK has called for a re-think that allows a two-year lead-in to the new requirement, as this is the minimum time that will be needed for planning applications and organic conversion. We need a decision on this as soon as possible, but experience tells us the EU will not be rushing to meet our desperate need for an answer."
Richard says that the organic egg sector has already had a tough time, with many abandoning organic eggs completely.
"There are big question marks for those remaining. But on an upbeat note, we are seeing signs of an upswing in the organic market generally, so let’s hope that continues in 2011."
Finn Cottle says that the most recent Kantar Worldpanel data – from the end of October 31 2010 - indicates that the decline in the organic market has ’bottomed out’. Some organic sectors could well see an upturn in 2011, she says.
"For the overall UK organic food and drink market, 2010 has been a year of refocusing and planning for healthier performance in 2011. During this past year, due to continuing recessionary pressures, the loyalty of organic consumers has been tested and in certain categories, it is obvious that consumers are less likely to trade up unless they are totally clear of the
benefits that organic brings."
Finn said that in a number of sectors organic products had been very resilient over the last year. Baby food was still experiencing double digit growth, organic alcohol was also benefiting from significant increases in sales and the majority of organic dairy brands were growing through innovation and dedicated marketing effort.
"The organic egg and poultry sector does, however, continue to struggle and although 2011 looks brighter for organic sales in general, there are still major challenges for eggs and poultry," she said.
There are two main issues facing the sector, she says. One is the proliferation of choice of products all offering a degree of animal welfare solutions. "This confuses the customer and gives them permission to trade down to free range on eggs or RSPCA options on chicken.
Consumers are aware that there is a choice but their detailed knowledge of why to pay more for different options on animal welfare is still not completely established. There is a lot of work that retailers need to lead in order to get the message across. Soil Association eggs and poultry offer the highest level of animal welfare but are often competing to get this message through to the consumer," said Finn.
The other major issue facing the sector is the significant price premium on organic eggs and poultry, she says. This can be a deterrent to purchase, particularly if there is a product available which offers some improved animal welfare but at a lesser price. Customers freely trade down and in the past they have been encouraged to do so by the high profile that celebrity chefs have given to other products.
"Both these issues are prominent in consumer decision making. Latest data shows that organic eggs continue to experience declines of approx 14 per cent versus a market at minus two per cent. This is surprising given that the trend in all other sectors is one of improving sales. The availability of organic eggs on shelf is critical to driving the market and yet there has been an obvious decline in availability, which is negatively impacting sales. Egg companies do need to work with retailers to achieve an appropriate allocation of shelf space for organic eggs in 2011.
This will be key to building sales growth."
This year sees the launch of a three-year campaign to promote the organic sector and attempt to increase consumer demand for organic food in the United Kingdom.
Nearly £2 million will be spent over the three years of the ’Why I Love Organic’ campaign. Half of the money is being provided by the UK organic industry, the other half by the European Union. The campaign launched in January under the banner ’There are lots of reasons to love organic – discover yours’. It involves press advertising, PR and digital marketing and aims to use everyday people to talk about their reasons for buying and loving organic.
Chairman of the Organic Trade Board, Huw Bowles, said, "We know that people want to eat natural and great tasting food, which is exactly what organic is. Research has shown that when it comes to buying food, issues such as naturalness and restricted use of pesticides are important to consumers. However, they don’t always realise that this is exactly what they would get if they were to buy organic. The term organic is widely misunderstood and through this campaign we want to help consumers to discover exactly what it means and why it’s worth it, with the ultimate aim of driving sales".
Press ads will run in a number of national magazines over a nine-month period in each of the three years of the programme. A new website (http://www.whyiloveorganic.co.uk) has also been created to showcase the benefits of organic food, and will feature up-to-date news and recipe suggestions. The site will also provide a forum for consumers to express and share their views and reasons for loving organic. It will complement Facebook and Twitter pages, which are also being created to support the campaign.
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