Distillation session 1
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Distillation Session 1. Supply side issues & retail challenges Simon Wright, O&F Consulting. 1 . Supply side issues - current issues & future challenges. Protecting organic integrity from GM Organic ingredients - are they a limitation to the development of the organic market?

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Distillation Session 1

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Distillation session 1

Distillation Session 1

Supply side issues & retail challenges

Simon Wright, O&F Consulting


Distillation session 1

1. Supply side issues - current issues & future challenges

  • Protecting organic integrity from GM

  • Organic ingredients - are they a limitation to the development of the organic market?

  • Why is there so much ‘poor’ organic food?

  • How to increase production as customer demand increases

  • Linking organic to global warming & sustainable development

  • Should the various organic certification bodies be unified?


Protecting organic integrity from gm

  • GM issue not dead - alive & kicking!

  • Consumers do not want GM contamination

  • New EU proposed standards would allow 0.9% contamination by GM

  • Conclusion

  • Keep GM out of organic food - this is a USP of organic products

  • Action required: use concern over GM to grow the sale of organic food

Protecting organic integrity from GM


Distillation session 1

Organic ingredients - are they a limitation to the development of the organic market?

  • Yes!

  • Organic ingredients can limit the market because of price, availability, consistency & reliability of supply

  • But, the market will correct itself so long as demand increases &

  • integrity is upheld


Distillation session 1

Organic ingredients - are they a limitation to the development of the organic market?

  • Conclusions

  • We need to improve knowledge through the supply chain from farmer to retailer

  • We need more support from NGOs regarding dissemination of information (trends, opportunities & training)

  • The solution is increased demand & volume to drive efficiencies, sustainability & better information sources


Why is there so much poor organic food

  • Role of organic food awards should not be judged by foods but by “normal people”

  • Warrants better entries?

  • Organic products can be poor cosmetically -does this matter?

  • Taste is subjective

  • Conclusions

  • Increased target (only way is by offering more conventional style

  • products)

  • Offer a mainstream product made with organic principles

  • Bench-mark organic vs non-organic in same area

  • Consider authenticity of product

  • Communicate the role of processing aids permitted in non-organic

  • products

Why is there so much ‘poor’ organic food?


How to increase production as customer demand increases

How to increase production as customer demand increases

  • Need to take into account the barriers to producers/farmers converting, such as:

  • conversion time & cost

  • historical influence & price deflation at the retail end


How to increase production as customer demand increases1

How to increase production as customer demand increases

  • Possible Solutions

  • Upstream supply chain contracts

  • Use imports to ensure continuity of supply

  • Collaborative working e.g. between farmers

  • Knowledge transfer e.g. packers holding workshops for growers

  • Widening of specs e.g. Class 2

  • Investment in R&D into growing better varieties specifically for organic


Distillation session 1

Linking organic to global warming & sustainable development

  • Global warming - the single biggest issue of our time - organic farming is part of the solution

  • For new entrants to organic production the environment is now the biggest reason for buying organic food

  • We can quantify and prove environmental benefits

  • To be more sustainable the public need to eat less meat

  • The organic industry has not yet communicated this to ‘the people’ -

  • (rural employment, enjoyment of work, rural economies)

  • Action: To campaign to clearly convey these basic ‘people’ issues


Distillation session 1

Should the various organic certification bodies be unified?

  • EU standard to be raised to set a standard worthy of superior quality

  • Lobby UK government to support the creation of this high standard

  • Single certification body, one core logo to remove current confusion

  • Conclusions

  • UK should adopt Soil Association full (higher) standard

  • We should push for this to be accepted across Europe


Distillation session 1

2. Retail related challenges

  • Branded packaged organic - how to justify shelf facings when major conventional brands out-sell in the same shelf-space

  • Location, location, location - parent department or organic section?

  • Price - what do we really think?


Distillation session 1

Branded packaged organic - how to justify shelf facings

when major conventional brands out-sell in the same shelf-space

  • Poor retail buyer perception of organic beyond fresh

  • Supermarkets have to ‘hit numbers’ which influences range review decisions

  • The message that organic is a retailers investment in the future needs to be enforced by supplier & organic industry together

  • Need to influence retail buyer outside the one hour meet


Distillation session 1

Branded packaged organic - how to justify shelf facings

when major conventional brands out-sell in the same shelf-space

  • Conclusions

  • Organic to be mainstream not premium

  • Organic alone is not enough - market proposition must be clear

  • Organic movement needs to learn from Fairtrade brand proposition


Distillation session 1

Location, location, location - parent department or organic section?

  • Pros of integrating in main fixture

  • Attract more occasional/lighter users if price not too high

  • In main fixture greater likelihood of frequent replenishment

  • Some customers don’t like going down the ‘worthy’ aisle

  • Cons of integrating in main fixture

  • Annoy dedicated customers so they can’t do whole shop in aisle

  • Risk of committing offence through mixing up organic & conventional

  • If organic premium more than 20% consumers less likely to buy if side by side

  • Conclusion - probably worth integrating experience so far positive


Distillation session 1

Price - what do we really think?

  • People may not pay more for organic but they will spend more if you tell them why a product is better

  • Justify price by talking about trading relationships, cost of ingredients etc.

  • Committed vs dabblers have different attitudes towards price premium

  • No consensus if organic would sell more if cheaper

  • People will pay a lot for high quality - organic is unsophisticated at proving this and is therefore still vulnerable to price


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