Blog: Dean BestOrganic and own label called into question

Dean Best | 3 August 2009

Organic food makers have had a wake-up call. The recession has had a clear impact on sales of organic food, especially when compared to demand for other so-called 'ethical' wares, like Fairtrade.

There has been some recognition that the downturn has hit organic sales but, almost flippantly, the sector has insisted sales would grow once the economy recovers.

Last week, however, saw a UK media furore over the future of organic food. It came in the wake of a study that claimed organic was no better for you than conventional food.

To some, the Food Standards Agency's report was nothing new ; it merely repeated the watchdog's belief that more research is needed into the potential benefits of organic. Others, however, saw the FSA's move as a severe blow to the organic movement. The sector is already reeling due to the downturn, they trumpeted. Now, organic's USP - its health credentials - has been called into question.

Just how do organic food makers fight back? Marketing will be key. Central to the success of Fairtrade has been the apparent ease with which consumers have understood how buying into the category can benefit others. Supporters of organic tout numerous benefits but sales figures suggest none has been strong enough to withstand recession.

The organic fixture has been one of the major victims of the clamour among retailers to offer consumers greater value. Perhaps the major beneficiary has been own label. But, last week, amid the reams of results coming from the world's food manufacturers came noises that own label's recession-fuelled boom could be coming to an end.

First, Kellogg CEO Dave Mackay said demand for private-label products was starting to moderate.

Next, David Wenner, boss of US cereal-to-Mexican cuisine group B&G Foods, told us in July's just the answer interview that own label has "converted who it is going to convert".

This week, Knorr soup-to-Ben & Jerry's ice cream giant Unilever and Belgium-based food retailer Delhaize publish their latest numbers. After their high-profile spat over brand listings, it will be fascinating to hear their thoughts on the outlook for own label.


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