Iceland cannot suggest that the failure of its organic frozen food range by January of this year was indicative of wider problems for UK organics. According to a number of industry representatives, the retailer only has itself to blame, with poor strategies and a lack of understanding, and there is plenty more life in the organic market.
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The retailer pledged to offer organic foods for the same price as conventional alternatives, and by August of last year the switch to frozen organics was virtually complete. Maintaining “regular supermarket prices” caused consumers more harm than help however, as the prices of regular products were first hiked to ease the transition to organic.
A spokesman for Iceland commented: “Prices of conventional vegetables went up ahead of the introduction of organic vegetables in order to be able to make that claim. The logic of doing it was: Yes, there’s a margin cost, but we hope to make it up through increased sales.”
As far as the Soil Association is concerned, the ensuing failure of Iceland’s organic lines was intrinsically related to its price strategy. Retail organic sales are booming elsewhere, most significantly in places where organic lines are offered as premium alternatives to conventional staples.
Furthermore, consumers who buy organic are liable to buy fresh rather than frozen food, according to Kevin Hawkins, communications director at rival supermarket chain Safeway: “It’s illogical really to go into frozen food. Frozen food is a declining market, and most of the people who buy organic will buy fresh food.”
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By GlobalDataHawkins added that sales for the entire organics market grew by about 50% during 2000, to become only 2-3% of sales of total grocery products: “One has to recognize that organic is and will remain a minority product, though a growing one.”
To read just-food.com’s analysis of organics at Iceland, click here.
