16-01-2013 13:54 PM | News, Organic

Organic eggs 'still declining'



Organic eggs 'still declining'
Recent statistics indicate that demand for organic eggs is still declining.

Figures compiled by Kantar Worldpanel for the 52 week period up to October 28 this year showed that organic egg sales were down by 35.3 per cent year on year - and this was on top of previous falls in organic sales figures.

But Richard Jacobs, the chief executive of Organic Farmers & Growers, has seen a little bit of light at the end of a long, dark tunnel.

"There’s no denying that the recent handful of years have not been the kindest to those in the organic sector - and egg producers have been some of the hardest hit," he said.

"There is also no getting away from the reality that 2012 has been tough and we can’t look forward from here and say that 2013 is going to see that turn around. Sales have been down and costs have risen more quickly than is healthy for any operator."

But Richard held out a little hope for those producers who have continued to persevere with the organic sector despite the difficulties of recent years.

"We are starting to hear some positive news and we know that some buyers are on the active lookout for new supply, giving the sector something to grasp onto that might just be starting to look like those so far elusive green shoots," said Richard.

Just how difficult the organic sector has become was made clear when former BFREPA vice-chairman Jeff Vergerson, a leading figure in organic for many years, announced that he was abandoning organic egg production and reverting to free range.

Jeff, a member of the Government's organic advisory body, ACOS, said he could not continue to absorb the losses involved in keeping organic layers.

Richard Jacobs conceded that times had been very tough for organic egg producers, but he said there were some encouraging signs.

"There has been encouraging talk from the supermarkets, some of whom are now very much awake to the fact that organic shoppers are their high-value customers. If they’re going to serve the needs of those customers, then it starts with the staples and, of course, that means eggs and milk."

Finn Cottle of the Soil Association feels that sales of organic eggs are not helped by the way they are currently displayed in supermarkets. She said that the average consumer did not have enough information to make an informed choice in the supermarket.

"They definitely do not have the time to browse the egg category and here lies the biggest problem. Organic eggs are extremely difficult to find on shelf," said Finn.

"A recent survey by the Soil Association showed that the average availability of organic eggs within supermarkets is 93.2 per cent, much lower than average retailer service level targets across their stores."

She said that packaging did not differentiate sufficiently. "The on-pack communication for a more premium product is dull and uninviting - labels on own brand have been abandoned. The launch of the One Eggs at Tesco has been the only innovative approach in the last year and would appear to be selling well, as the Tesco consumer now has a signpost for finding organic eggs," said Finn.

She said that supply of organic eggs was causing a major problem. With egg producers continuing to leave due to the market conditions, the balancing of supply and demand was driving further decline as volume was frequently restricted.

In contrast to eggs, organic red meat and many dairy categories had had a good year in 2012. Organic milk was down just four per cent over the year despite aggressive pricing on non-organic milk. "Surely the organic milk shopper is as likely to want to purchase organic eggs?"

She said, "For 2013 we need to work together to stop the current trend."

"There are loyal organic consumers out there - they are buying organic milk, organic carrots, organic tomatoes, organic meat, but not picking organic eggs off the shelf."

"We need to work together as an industry to reposition organic, to encourage egg producers to reconsider the economics - there needs to be more supply available if we are ever to get retailer support to profile the product."

"Consumer demand is falling because the product is not there on shelf and this is a virtuous circle, which will continue until someone takes control. The large packers need to re-engage the buyers and commit to providing the stock, incentivising the producer to get back into organic eggs in the same way as it worked in the early noughties."

Richard Jacobs urged the organic egg sector to embrace innovation and creativity.

He said that smart marketing and brand development was very often the difference between success and failure in the food sector and this was something that could hold true for smaller producers looking to build their own local market as much as it did for those working on a national supply scale.

"The signs that customers are coming back to organic have to be followed closely and the chance to capitalise on the opportunity of making them your committed customers into the longer term future must not be missed. We know it can be done because it’s happening in the rest of the world."

"The UK organic market seems to be the only one that isn’t recording strong and sustained growth. Perhaps this is down to the apparent loss of support at the political level, maybe it’s our food culture in this country, we can’t answer such imponderables from where we sit, but it’s clear that no-one outside of the sector is going to fix this for us, so we must do it ourselves."

He said that those producers who had "toughed it out to stay in organics" were now in pole position to capitalise on the loss of supply caused by those who had left, as the appetite for their product returned. "It’s a phenomenon the sector is not unused to and has been seen repeated in an unfortunate cycle with milk."

He said the good news was that the time it took to bring extra eggs on-stream when the market demanded them was not as long as it took to rebuild milk supply. For organic egg producers, it was a matter of keeping the eyes open for opportunities, staying on top of the market data and standing ready to nurture any signs of green shoots.

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