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Long Read: Will vogue for organic grow beyond pandemic?

Published:  07 October, 2021

The organic market, along with its wine and beer subdivision, swelled during the past year, but whether this was a spur-of-the-moment spike driven merely by the pandemic remains to be seen. Callum Saunders, planning director at Zeal Creative, dives into the UK trend to explore whether organic wine and beer is set to be a staple in the drinks sector.

With more than £50m being spent on organic products every week in 2020, the UK’s organic market grew by 12.6% YOY, its biggest growth in 15 years. Organic beer, wines and spirits also benefitted, with sales growing by almost a third (all figs Soil Association, Organic Market Report, Feb 2021). So, is organic the new focus for the industry? Is this a long-term trend that will help category sales, or is this a short-term spike driven by the very unique landscape that we’ve all experienced over the past 18 months?

A tale of two landscapes

Market data certainly paints a positive picture for organic wine. In the off-trade, Waitrose saw an organic wine sales growth of 56%, alongside Aldi (45%) and Sainsbury’s (41%) (Kantar, 24 weeks to 6 Sep 2021). But does this indicate an organic future? We have to consider the unique market dynamics of last year, as well as looking at the very different dynamics we have been facing in the last quarter of 2021.

Last year, consumer and shopper behaviour reflected the unique circumstances of lockdown Britain. The closure of leisure and out-of-home channels meant that more affluent shoppers could afford to trade-up to more premium products, including organic wine. A focus on quality products in the home was then replaced by the desire for premium and special experiences in the on-trade as the world started to open up again.

While the Covid crisis is far from over, behaviours are starting to revert to pre-pandemic norms, although we’re now facing a much larger economic epidemic that will impact the organic opportunity. The end of government furlough schemes will hit shoppers, we’re experiencing ongoing and regular supply chain crisis and the impact of Brexit sees many brands and manufacturers forced to implement cost increases.

This new situation – starkly different from the trade-up nature of lockdown Britain and the impact on shoppers and consumers – is one that will not be insignificant. Organic, which often carries a higher price, will no longer be an attractive option to large segments of UK shoppers.

The sustainability play

We also can’t assume that all consumers understand the benefits of organic and thus organic wine. Twenty years ago, the term ‘organic’ was very much in vogue. Fast forward to today however, and we now live in a complex world of wellness with terms including ‘gut health’, ‘free-from’, ‘protein’ and many more, clamouring for consumer attention. The term organic has almost become left behind as modern wellness continues to bring in new phrases, trends and sub-categories.

The boom in organic wine sales shows that more consumers are buying into the category, but we can’t make the assumption that the shopper benefits (real or perceived) are well-known by all audiences. While organic may appeal to some shoppers, others may find it confusing and even off-putting: some education and clarity at a brand or a category level would certainly benefit everyone.

Localism and sustainability

Of course, sustainability is a critical focus for consumers and for trade customers at present. Organic’s benefit to wildlife, ecosystems and the planet is a key angle to ensure that the organic label asserts a truly strong relevance in today’s sustainability-focused manufacturing landscape. Conscious consumers want to ‘buy into better’ and explaining the benefits of organic wine beyond the taste and quality properties of the wine itself is a smart move for organic wine producers.

We’ve also seen a greater connection to local areas during the pandemic, as people have focused in on the communities and lands around them. Given our category operates at a global level with producers around the world, this perhaps feels rather niche, but the opportunity for local and English wine producers is certainly there, not only from a sustainability perspective, but also given ongoing supply chain issues delivering goods into the UK.

Consumer psychology

We can look at the market dynamics and opportunities, but what about shopper behaviour and psychology? Some studies have found that organic labelling has a positive impact on sales, whilst others indicate that it can have a negative effect (Di Vita G, Pappalardo G, Chinnici G, La Via G, D’Amico M: Not everything has been still explored: Further thoughts on additional price for organic wine, September 2019).

If we start with the positive, some consumers consider organic wine to be higher quality and therefore are willing to pay a premium: consumers also focus on organic when purchasing as a gift, believing it to be a sign of quality (Boncinelli F, Dominici A, Gerini F, Marone E: Consumers wine preferences according to purchase occasion: personal consumption and gift-giving, 2019).

However, other research claims that organically certified wine with an ‘eco-label’ reduces the price by 20% (Delmas MA, Grant LE: Eco-labeling strategies and price-premium: the wine industry puzzle, 2014), due to a belief that organic wine is niche within a larger wine market. With a market that is becoming increasingly crowded by “labels”, there is the suggestion that consumers become switched off to health and sustainability claims. While the sales data doesn’t reflect this, it is important to use labels such as organic inclusively, helping all shoppers to enjoy great products which offer health and sustainability benefits, rather than singling your products out as only for shoppers who buy organically a lot.

Help or hinder?

There’s no doubt that the organic opportunity is huge, but wine brands need to ensure that they are communicating it in the right way that will help to drive purchase decision-making. Rising supplier costs and cost price increases will impact shoppers but selling organic benefits through a sustainability lens could help to continue the buoyant organic market into 2022.

About Zeal Creative

As the UK’s most effective brand activation marketing agency, Zeal Creative delivers multi award-winning campaigns for businesses including Carlsberg Marston's Brewing Company, Nestlé, Kellogg’s, Pringles, Arla, McCain, Dr Oetker, Reckitt and Warburtons. Zeal Creative helps bring brands to life, with campaigns that engage, inspire and motivate consumers into action at key moments on the path to purchase.