Household budgets may be shrinking but demand for expensive organic baby food is soaring as health-conscious parents try to give their little ones the best possible start in life.
Shoppers have been deserting organic foods since the start of the recession, leading to a 20 per cent sales crash over the past three years.
But the amount being spent on infant and toddlers reached £135m last year and demand has soared by 44 per cent since 2006.
Nearly two in five families with an infant under one-year-old believe it is worth paying the premium for organic food, compared to a quarter of households with no children at all, research has found.
This is against a backdrop of a ‘cash-strapped public who associate it with excessively high prices’, according to a report by retail analyst Mintel.
Senior food analyst Alex Beckett said: ‘Considering parents want what is best for their little ones, there appears to be an underlying feeling that organic is better, demonstrated by the purchasing decisions of new parents.
‘Arguably, this could be leveraged to drive usage in other food categories in which similar quality considerations are paramount.’
Organic foods avoid man-made pesticides and fertilisers, genetically modified processes and irradiation – areas which have triggered concern among consumers about the long-term effects on their health.
But producers are struggling against a majority of people who believe the label is ‘just an excuse’ to charge more money.
Some 54 per cent of those who have bought products over the past year expressed suspicions, rising to 63 per cent of shoppers who hadn’t bought any.
Consumers also feel organic products lack ‘importance’ compared to ethical labels.
Just 11 per cent said it influenced what they put in shopping baskets, compared to three times as many who were swayed by the benefits of animal welfare or additive-free purchases.
Fairtrade products were considered important by more than a quarter of people.
Sales in the organic sector collapsed by 12.3 per cent in 2008 – 2009, followed by 6.5 per cent in 2010.
Another two per cent is expected to be lost this year, leaving the total value of the UK market at £1.3 billion.
However, Mintel said the slide was being slowed by factors including supermarket price promotions and growing interest in the 25-34-year-old market, where there is more disposable income due to the small number constrained by the costs of families and mortgages compared to the rest of the population.
Marketing campaigns – including Why I Love Organic, launched by the Organic Trade Board earlier this year, which highlights the tangible benefits of organic food such as natural production methods – should also help.
This could turn the tide, according to Mintel, and see sales recover to just over £1.5 billion by 2016.
Mr Beckett added: ‘The time it has taken for the organic food market to recover and lick its wounds from the sales free-fall it suffered over 2009 has given negative consumer attitudes room to develop.
‘But, at long last, the sales decline is slowing, thanks in part to increased promotional support and enthusiastic commitment from younger adults.
‘The launch of the “Why I Love Organic” campaign suggests the industry is finally getting to the root of the problem – clarifying to consumers what organic is and why it is worthy of their money.’
Soil Association deputy director Roger Mortlock said: ‘We’ve always known that parents have been particularly concerned about what their children are eating in terms of pesticides and where the food comes from.
‘It is the first sector where we got over 50 per cent of market penetration. Our challenge is to keep parents buying it for their children once they are beyond toddler age.’
He added more work was needed to explain to shoppers why organic products were generally more expensive than other similar goods.
‘Organic farmers are not taking a hefty premium,’ he said. ‘It’s because it costs more to produce – for example animals are cared for less intensively and live longer lives.’