Both the Soil Association and Organic Farmers & Growers are looking for reasons to be cheerful in the coming year, despite the continuing decline of organic egg sales over the last 12 months.

Figures compiled by Kantar Worldpanel show that the market for organic eggs fell by nearly 12 per cent in the year to the end of October 2011. However, the Soil Association says that these figures apply only to supermarkets. It says that organic egg sales have held up more strongly in other retail outlets. At Organic Farmers & Growers’ conference recently some individuals reported growing sales - including growing exports.

Richard Jacobs, chief executive of OF&G, told the Ranger, "We know there’s work to do and we accept that some producers are finding conditions tougher, but there is still a lot to be positive about in organic production and we look forward to seeing some strength come back into the sector in 2012."

Finn Cottle, trade consultant at the Soil Association, told us that the overall market for organic food in the United Kingdom during 2011 had had a relatively stable year following the previous two years of decline, although some sectors had performed much better than others. Organic baby food continued to achieve more than 10 per cent growth and poultry and red meat were also growing by 8.3 per cent and 10.1 per cent respectively, she said.
Unfortunately, the organic egg market underperformed the market trend for the third year, with a decline of 11.7 per cent. However, Finn said, "This is supermarket data and it would appear that other channels to market have not been experiencing the same decline, with more positive results for organic egg sales through online retailers, box schemes and farmers’ markets." She said there were reports that supply had been extremely tight during the second half of 2011, with a number of smaller businesses struggling to find organic eggs. This, in itself, was something that needed to be addressed if the potential of organic eggs was to be unleashed.

Organic eggs had become more difficult to find on supermarket shelves for a very different reason. Supermarket policy was having an effect on sales of organic eggs, she said. "There is no doubt that the availability of organic eggs on supermarket shelves has reduced disproportionately to other areas in store and it is common to find just one pack size, one egg size and just one facing in stores. With less product on shelf, there is less likelihood of the ’lightweight’ organic shopper picking up the product. Availability on shelf is so critical to sales. Added to this, the design for organic egg boxes has little differentiation to the non-organic product, making it even more difficult for the most loyal shoppers to find the organic option on shelf."

She said there had been little innovation in the organic market other than One organic eggs - and the fact that One eggs were only available in Tesco restricted the potential for overall market growth. The launch of One helped Noble Foods to an award from the British Free Range Egg Producers’ Association in November. The brand, which promises to donate seven pence from every pack to egg farming projects in sub-Saharan Africa, was instrumental in winning Noble the breakthrough of the year award from BFREPA.

Finn Cottle said that pricing remained an issue for organic eggs. "Retail prices are still an obstacle, with the latest premium at over 30 per cent for large organic eggs versus free range. Promotions of larger packs of free range eggs are also challenging the organic opportunity," she said. "There is no easy solution for the pricing issue in the short term, and the awaited decision on percentage of non organic feed could add to the price differential."

Finn said a strong message needed to be conveyed about the specific benefits of organic eggs. A recent survey by the Soil Association showed that when consumers were asked to rate their top three reasons for choosing organic, 32 per cent rated animal welfare on their list while 50 per cent chose ’where and how the product is produced’. "Organic eggs could easily emphasise both these issues clearly on packaging - a strong signpost is needed to make the customer selection simpler."
For 2012, she said, the organic egg sector needed to be led by a strong brand because private label was not promoting the message. The brand needed to be clear and simple in its communication about stocking densities for organic hens, special diets and the overall positive impact of organic farming. This could be communicated in an engaging way to appeal to ethically minded consumers.

Richard Jacobs said that whilst there had been a higher than usual number of departures from the organic egg sector during 2011, many strong producers were still finding a market for their produce. "It’s been an interesting year in the organic sector, but certainly far from the doom and gloom that we might possibly have expected," he said.
One issue still facing organic egg producers was the regulation of the non-organic element of feed, he said.

Following a reduction from ten per cent to five per cent at the start of 2010, it was due to be eliminated completely at the beginning of 2012. "Not unusually, the EU Commission has not got its act together on this in good time and no formal amendment has been made to the regulation, so this isn’t going to happen. In fact, despite quite a bit of confusion around the issue, the current derogation is expected to continue for the foreseeable future.

"The Standing Committee on Organic Food is to meet in February 2012 to decide on the matter, and there could, at that point, be change to the regulation, though this is not expected to be the reduction to zero per cent. The debate still rages on in the sector about whether this is acceptable or even possible, but without strong evidence that it can be done without harming the welfare of the birds we don’t expect to see a demand for zero non-organic content in rations in the short term," said Richard.

"It is important to note that the Commission, and Defra, do not wish to see producers penalised for continuing to feed to the current standard until they hear otherwise. When the regulation is clarified, the control bodies should be rushing to inform their licensees. Organic Farmers & Growers certainly will."

Another issue that has been taken up by OF&G is outdated organic statistics. Richard said, "In the middle of the year we have been tending to get the annual sector statistics out of Defra and these didn’t paint a pretty picture this year; though there’s a big ’but’ to be applied to those figures. They are based on a snapshot of the sector taken from all of the control bodies at the end of the calendar year. Defra then goes on to do all of its analysis and reports the figures in about August, by which time they can be horribly out of date. We’ve made a point of taking this up with the Defra stats team this time around and they have been very receptive to our comments. They’ve been to meet with us and been very understanding about our call for more regular updates, which they can feed back to the industry more regularly throughout the year.

"There’s a lot of work to do before they reach that point, and it will require more co-operation from across the control bodies, but OF&G has made clear it’s willing to play its part to achieve this."

Richard said that OF&G was not allowing negativity surrounding statistics and sales to take over. He knew they did not provide the full picture and that there was still some cause for positivity in organic egg production in the year ahead.