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The growth in UK organic food sales has been nurtured by supermarket promotion. The apparent retirement of Malcolm Walker, co-founder of Iceland Foods and organic avocate, may signal a change in emphasis to farmers' markets for organic food. (900 words)

Rapid and sustain growth are not characteristics that most people would associate with farm and food sector markets. The success of the organic sector over the last few years has, therefore, come as very welcome news for the industry.

As with any growth market it has attracted the marketers, if it was not in the first place created by them. The match between the organic and marketing is not a natural one. The opportunity for marketing is as often as not to exploit economies of scale by expanding sales. The challenge in this instance is the personal and individual nature of organic produce from the plough to the palate.

A wide range of benefits is claimed for organic food which could provide the marketing men with exploitable opportunities. More than enough scientific evidence has been "found," variously disputing and supporting these claims, to create confusion and the opportunity for value adding spin.

There is almost certainly a large a measure of "feel good" about buying organic. Given a little help, it is easy to believe the claims of advocates, to smell and taste the difference, and to be confident that the planet will be saved if only the less enlightened bought organic.

The impersonalized, sanitized and generally standardized environment of the supermarket isle, however, does not quite fit the organic image.

Organic carrots, if they are of the best quality and they need to be if they are to make it on to the isle, will not look very much different from conventionally produced carrots. The options in terms of their presentation are very much the same. But as they cost more to produce and market, there is a need to charge more for them.

The stall holder at the local farmers' market has a much kinder environment for things organic. Looking and talking the part of a farmer would not fit a supermarket's carefully cultured between-the-isles image. Dirt under the finger nails adds to authenticity for the stall holder. It would be a disciplinary matter for the supermarket employee.

"Field run" and bulk presentation of produce on the stall implies it has just been run in from the field. In the supermarket it would suggest that it has been laying around long enough to be thoroughly picked over.

We have, of course, been educated at the retail counter to appreciate these finer aspects of conventional supermarket produce.

British supermarkets have, however, entered gamely into reeducating us on organic foods with its challenge of providing glamour to the natural product and its natural packaging.

None has been more courageous and supportive of the organic movement than Iceland Foods, an aggressive second tier supermarket chain with 770 stores.

It seems to support everything natural, making much of its exclusion of such unnatural matter as genetically engineered food. Further Iceland's cofounder and board chairman, Malcolm Walker, has gone to considerable lengths to support and cultivate activist environmental interests.

In 2000 some of Iceland's coups included hiring Lord Peter Melchett, until recently Executive Director of Greenpeace UK, going all organic with its frozen fruit and vegetables, and signing up a purported 40 percent of the world's supply of organic food. Iceland seemed well set.

Unfortunately things have not been working so well between Iceland and its customers. This month it announced a 5.5 percent decline in sales during the four-week pre-Christmas period. Its organic strategy and, implicitly, the cost of it were blamed. The immediate reintroduction of conventional produce was the result.

This was to some degree heralded by several shifts in senior management which saw Walker appropriating and relinquishing the position of chief executive. What only came to light since the announcement was reports of Walker's sale before Christmas of four million shares, about two thirds of his holding in the business.

It is quite possible that Iceland's troubles in the organic market were caused by a July 2000 ruling of the UK Advertizing Standards Authority which upheld four out of five complaints regarding a leaflet extolling the benefits of organic food published the previous November.

The disallowed claims were that consumers could "taste the difference," organic food was healthier, better for the environment and resulted in healthier, happier animals. Organic advertizing copy is now much less exciting.

This does not, of course, spell a demise in the demand for organic foods in the UK. But without the enthusiasm of Malcolm Walker and the leadership of Iceland Foods, the growth may be more sober. The major food chains are likely to be less aggressive with out Iceland snapping at their heels.

Organic trade at farmers' markets up and down the country will continue to flourish. And, if the long arm of the law does stretch that far, it is more likely to be concerned with the dirt under the finger nails than the sales banter which is unlikely to pay due respect to the ruling of the Advertizing Standards Authority.

Importantly participants on the two sides of these market will learn that supermarkets neither produce nor consume food. Some people may not view these markets as being effective, but few will deny that they are pretty.

January 27, 2001