Ethical foods boom tops £2bn a year and keeps growing

Food shopping has undergone an ethical revolution, with consumers set to spend more than £2bn this year on free range, fair trade and organic products. The ethical food market has grown by 62 per cent in the past four years and is still expanding, according to research by the market analyst Mintel.

While supermarkets once competed in price wars over bread and baked beans to attract customers, they are now expanding their "conscience-light" ranges to cope with increased demand.

Crucially, the Mintel research found one third of adults now believe it is worth paying more for food that is fair trade, organic and locally sourced.

One in three consumers say they buy fair trade products whenever they are available, compared with one in four in 2002. Four out of ten people always try to buy free-range food such as chicken and eggs, up from 33 per cent four years ago.

Julie Sloan, senior market analyst at Mintel, said: "Ethical food suppliers have traded on the fringes of the UK grocery market for many years but until recently only a few sectors, such as free-range eggs, had really established themselves.

"Now many more ethical products have entered the mainstream foods sector, with leading suppliers and retailers becoming increasingly involved. In the present climate, many companies may be hoping to improve their profile by projecting a more ethical stance."

She added: "Whatever their reasonings for choosing the ethical route, this movement is certainly a step in the right direction towards a more ethically-minded society. With these products becoming rapidly more widely available, the market is set to see substantial future growth."

Fairly traded food goods have seen exponential growth over the past five years, with a 265 per cent increase in sales. Mintel predicts that sales in the sector will grow by a further 138 per cent in the next five years, with the market worth £547m by 2011.

Barbara Crowther of the Fairtrade Foundation which gives products the seal of approval, said: "This confirms what we are experiencing on a daily basis - rapidly growing consumer and business interest in Fairtrade and wider ethical food shopping. The challenge now is to consolidate long-term Fairtrade commitments as part of mainstream consumer and business behaviour, in order to bring about tangible and sustainable change for millions more producers in developing countries."

Supermarkets have also begun to cash in on the consciences of its customers by expanding their fair trade and organic ranges.

Last week, Tesco announced sales of its organic products had grown by 30 per cent in the past year, while Asda unveiled plans to introduce more than 1,000 new organic lines.

On Wednesday, Sainsbury reported a 6.6 per cent increase in its second-quarter sales, which the company said was mainly due to a "sea change" in demand for healthier and better quality products. One in seven pints of milk sold by Sainsbury is now organic.

But the increase in sales has led to concerns that the ethical boom could become a victim of its own success.

The Soil Association, which certificates organic products, has been accused of betraying the principles of the movement by approving salmon reared in cages and eggs from chickens that are kept in conditions described as inhumane.

A quarter of consumers surveyed said the Government should introduce regulations to force manufacturers and supermarkets to behave more ethically.

Success stories

Fresh & Wild

Stores across London and Bristol sell organic fruit, vegetables, meat and juices . In 2004, the company was bought for £21m by the US organic food giant Whole Foods

Tyrells

The Herefordshire crisps maker threatened to sue Tesco recently for stocking its products without permission. Will Chase, founder of Tyrells, said he did not want his crisps sold at Tesco because he wanted his goods to be sold through independent retailers

Traidcraft

One of the pioneers in the fairtrade food industry, Traidcraft now sells more than 300 products, including tea, coffee, wine, pasta and chocolate. Sales topped £15m in 2005.