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The growth in demand for organic food will undoubtedly suffer following the departure from Iceland Foods of Malcolm Walker, a retail advocate of all that is natural. (720 words)

Although not matching some of the "dot coms," growth in demand for organic food in recent years has been more than what the farm sector has been used to, and a matter for some satisfaction.

But the apparent withdrawal of Malcolm Walker, cofounder and board chairman of Iceland Foods, from its management and implicitly from the promotion of organic food must be a matter of concern to the industry.

Iceland Foods, with its 760 stores, has until very recently taken great stock in being the leader in promoting everything natural in foods and making much of its exclusion of such unnatural matter as genetically engineered food. Further Iceland's cofounder has gone to great lengths to support and cultivate activist environmental interests.

Iceland's coups last year 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.

Things have, however, 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 its cost were blamed.

Several shifts in senior management at Iceland which have seen Walker appropriating and relinquishing the position of chief executive and Walker's sale before Christmas of about two thirds of his holding in the business, suggest that he will in the future be less active with Iceland.

If this is so, the organic movement has lost a valued ally. While Walker was around, the major supermarket chains could not go to sleep on organic food.

In a marketing context organic food is not a natural subject. The opportunity for marketing is as often as not to exploit economies of scale. The challenge with organic food is that, from the plough to the palate, it is a rather personal and individual affair.

The wide range of benefits claimed for organic food have, however, provided the marketers with exploitable opportunities. And more than enough scientific evidence has been "found," variously disputing and supporting these claims, to create confusion and the opportunity for value adding spin.

The impersonalized, sanitized and generally standardized environment of the supermarket isle, however, does not quite fit the organic image. We have, of course, been educated at the retail counter to appreciate these finer aspects of conventional supermarket produce. But to their credit supermarkets have entered gamely into reeducating us on organic food providing glamour to the natural product and its packaging.

It is quite possible that Iceland's troubles in the organic market started to go wrong when in July 2000 the UK Advertizing Standards Authority upheld four out of five complaints regarding the benefits of organic food.

Organic food advertizing copy has been a lot less exciting since claims that consumers could "taste the difference," organic food was healthier, better for the environment and resulted in healthier, happier animals have been disallowed.

This does not, of course, spell a demise in the growth in demand for organic food. In particular organic trade at farmers' markets up and down the country will surely continue to flourish. This is a much more natural environment for organic food.

One where "field run" and bulk presentation of produce implies that it has just been run in from the field and not that it has been well picked over. One where looking and talking the part of the producer with dirt under the finger nails adds to authenticity and does not clash with a carefully cultured between-the-isles image. And perhaps one where sales banter is not unduly inhibited by the ruling of the Advertizing Standards Authority.

Most importantly participants on both sides of the market learn of each others needs and concerns. Some people may not view these markets as being efficient, but few will deny that they are pretty in terms of effective communication between producer and consumer. And picking up on shifts in consumer perceptions is particularly critical in this kind of market.

As for future prospects for regular retail demand for organic food, this will depend on how organic food fits with the image supermarket chains are promoting. But without the leadership of Iceland Foods, the outlook must surely be less certain.

February 3, 2001