The movement in the Organic food market is important to Africa is we do intend increasing the use of Organic as a selling point, but also because it is an indicator of how people in Europe are going to react to increasing food prices.
Tesco, the UK chain, decreased it’s prices in August 2008 by up to 25 per cent, “in response to feedback from consumers who are feeling the effects of the credit crunch” Tesco believe
consumers were already less willing to pay the premium price of Organic Foods, in the face of higher prices on basic commodities and the general economic downturn.
Late in August USA Today reported on declines in the growth of Organic food in the USA, which they linked to their premium price.
At the end of August the Guardian reported on data collected for it by market research group TNS.
from: Guardian (click image for full story online)
The information showed the UK suffered the worst decline in sales over the last 10 years. Although the Soil Association had different data they acknowledged the fact that the consumers situation was definitely effecting sales.
The Private Sector Development Blog of the World bank noted the decrease reported on by the Guardian , but added that the effect on purchases from Developing Countries will be lower because most Organic Food is purchased from Developed Countries.
Another article by the Guardian wondered whether this quick reversal in the face of the economic downturn indicates that the Organic movement is just a fad.
On the other hand the Dane’s consumption of organic foods seems not to be effected by food price increases.
Tree Hugger believes this is a result of an older organic system and the fact that retail is wider spread, down to the corner store.
Interesting is the fact that Restaurants & Caterers can be certified at bronze, silver and gold levels, depending on the content of organic ingredients in their food.
The final question is what effect will the current financial crisis, assuming its is going take years to correct, have on the development of the Organic Sector over the short and medium terms.