Organic Dairy Sector Plans Market Assault

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Organic dairy sector plans market assault

 

VIC ROBERTSON

 

RUMOURS of the early demise of the organic dairy sector have been greatly

exaggerated, say industry leaders. But clearly it is facing a period of

rationalisation after rapid expansion in the late 1990s.

 

Like every other agricultural sector, organic dairying is faced with an ageing

population - and few farmers in their 50s or 60s relish the prospect of reduced

incomes during the two-year conversion period to gain organic status,

particularly in the current recession.

 

Sally Bagenal, chief executive of OMSCo, the 350-strong the Organic Milk

Suppliers co-operative, said: " There is almost no-one coming into the organic

dairy sector and there is little sign that anyone would want to do it if they

think the market is in deep oversupply. "

 

The co-operative itself has seen some reduction in numbers, but still reckons to

supply about 70 per cent of the organic milk market, with a high proportion

going for processing into yoghurt and cheese.

 

With the market for organic dairy products growing at about 28 per cent a year

and production falling as some quit the business, Bagenal believes the market

could be in balance in two or three years.

 

Organic milk is making an impact on the food service sector - this year, fast

food chain McDonald’s changed from standard to organic milk.

 

But the real bottom line is convincing consumers to increase their purchase

rate, says Bagenal. To this end the co-operative appointed a marketing director

in 2001.

 

A programme of market research followed, revealing that only about 4-6 per cent

of consumers were regular organic food buyers, accounting for about 70 per cent

of sales, and fell generally into the affluent 45-65 age group.

 

Bagenal said: " So we had to look at the next group of consumers, the people who

bought just occasionally... We try to find out what they bought and why and we

carried out focus group research to build up our understanding of the consumer. "

 

The end result was the creation of a promotional campaign with a heavy

educational slant. This included production of an organic food guide for

parents, information boards on footpaths of organic farms, and promoting health

messages in consumer media.

 

The campaign, which started in August 2001, recently took the top award for

consumer education at Britain’s largest organic trade show.

 

Bagenal points out the benefits to the industry, notably lifting milk out of the

world commodity market, and improving the health of both producers and animals

through reduced stress.

 

And with yields typically in the 4,000-5,000 litre range, a production life of

seven or eight lactations is not unusual, and with a stocking rate of one cow

per two acres, pressure on the soil is reduced.

 

With a background of several generations of farmers, Bagenal studied at

agriculture college and took over the tenancy of the family farm at Laxton,

Somerset.

 

The decision to go organic was taken in 1988 as a result of her personal

convictions, followed by the realisation that if she and her husband wanted

organic produce, others might too.

 

The end result was OMSCo, formed with four like-minded farmers when the milk

market was deregulated in 1994.

 

 

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