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Appendix I Methodology
Producer Survey
In order to gain information on production volumes, farm gate values and market outlets for organic produce a postal survey of organic producers in Scotland was conducted (See Appendix 2).
- Mailing lists were obtained from the organic certification bodies and additional checks were made on the internet.
- The research team identified 632 producers. However 26 were new entrants and they would not have had organic produce for sale during the 12 month period preceding the survey.
- In conjunction with SAC a postal questionnaire was sent to 606 organic producers based in Scotland on the 13 th May 2005.
- A 42% response rate was achieved.
- Dairy producers were not asked to contribute volume and production data as this information was provided by the Scottish Organic Milk Producers Marketing Manager.
Processor Survey
To gain information on organic processors in Scotland, face to face and telephone interviews were conducted to establish business and marketing strategies and perceived threats and business opportunities to the Scottish organic sector.
- The Project Team conducted eight face to face interviews in May 2005 to pilot an interview structure. Following the trial, an interview schedule was developed covering key questions.
- Over a ten-week period, approximately 150 organic processing businesses, 32 independent retailers and all of the multiple retailers operating in Scotland were contacted and interviewed by telephone.
- In some instances a short questionnaire was emailed or faxed through to the interviewee to help them gather the required information (see appendix 2).
- Over 30 companies completed and returned questionnaires electronically.
Farm gate values
- Average price from 'Eye on the Market' in Organic Farming journal. Average weight estimated using industry knowledge and the Farm Management Handbook 2004.
Market Penetration Levels by sector:
Market Penetration levels for each sector were calculated by using a combination of results from the producer, processor, retailer and consumer surveys. Different levels of information were gathered by the research team, so methodologies differed slightly for each sector.
Beef:
- Producers were asked how and where they marketed their produce and volumes sold.
- Processors and retailers were asked where they sourced their produce and volumes bought
- From the survey results it was found that 15% of organic beef produced in Scotland was sold to abattoirs based in Scotland, 15% was sold directly in Scotland and 5% was sold to independent retailers the remainder was unknown or sold to abattoirs in England.
- For the purpose of this calculation it is assumed that if meat is processed in Scotland it is retailed in Scotland and it is assumed that the independent retailers are located in Scotland. Therefore, it is estimated that 35% of the organic beef produced in Scotland is retailed in Scotland.
- It is estimated that 52,118.9 cattle were consumed in the UK in 2004 ( UK production is an estimated 19,284 and 63% organic beef consumed is imported)
According to TNS research Scottish consumers account for 5.4%, of the retail value of organic food. It is assumed that this figure is representative across the sector.
- 5.4% of the UK's total beef consumption = the equivalent of 2,814.4 cattle consumed in Scotland.
- OML estimate that Scotland produces 5,751 organic cattle a year and an estimated 35% of this is processed in Scotland.
- 35% of the 5,751 cattle produced in Scotland = 2,012.85, which is 71.5% of the amount consumed in Scotland.
- Therefore, Scotland has the ability to be 100% self sufficient in organic beef, however, it is estimated that market penetration currently stands at 71.5%.
- Stakeholders were contacted to verify the results.
Lamb
- Producers were asked how and where they marketed their produce and volumes sold.
- Processors and retailers were asked where they sourced their produce and volumes bought
- The surveys suggest that whilst production far exceeds demand in Scotland, the majority of the lamb is traded throughout the UK via the multiple retailers, accounting for 90% of Scottish organic lamb production. As little as 30% is definitely retained in Scotland for sale direct to consumers or through independent and multiple retailers. Therefore a total of 30% of the organic lamb produced in Scotland, remains in Scotland
- According to TNS research Scottish consumers account for 5.4%, of the retail value of organic food. It is assumed that this figure is representative across the sector.
- 5.4% of the UK's total organic lamb consumption = the equivalent of 10,200 lambs consumed in Scotland.
- OML estimate that 60,000 lambs were sold as organic and an estimated 30% (18,000) are retained in Scotland for retail and further processing.
- However, during April, May and June, production falls to 2,151, 2,304 and 2,284 lambs respectively. Whilst this could cater for domestic demand, it is assumed that only 30% of this will remain within Scotland. This results in 685, 645 and 691 carcasses being available for domestic consumption which is below the 791 carcasses needed to satisfy demand. If these figures are added to the 9 months of the year when demand is met and levels recalculated penetration falls slightly.
- Therefore, the Scottish organic lamb market has achieved 96% market penetration.
- Stakeholders were contacted to verify results.
Pork
- Producers were asked how and where they marketed their produce and volumes sold.
- Processors and retailers were asked where they sourced their produce and volumes bought.
- The surveys suggest that whilst production far exceeds demand in Scotland, the majority of the pork is traded throughout the UK via the multiple retailers, accounting for 96% of Scottish organic pork production.
- According to TNS research Scottish consumers account for 5.4%, of the retail value of organic food. It is assumed that this figure is representative across the sector.
- 5.4% of the UK's total organic pork consumption = the equivalent of 5,076 organic pigs consumed in Scotland
- 7,000 organic pigs are finished in Scotland, which suggests that Scotland has the ability to be 100% self sufficient in organic pork. However, there is no way of tracking where Scottish organic pork is retailed as it is traded anonymously throughout the UK and it is impossible to calculate a market penetration level.
- Stakeholders were contacted to verify results.
Table birds
- Producers were asked how and where they marketed their produce and volumes sold.
- Processors and retailers were asked where they sourced their produce and volumes bought.
- Survey results suggest that the sector is unable to satisfy demand and therefore market penetration for organic table birds currently stands at 80%
Eggs
- Producers were asked how and where they marketed their produce and volumes sold.
- Processors and retailers were asked where they sourced their produce and volumes bought.
- Survey results suggest that market penetration for organic eggs currently stands at 60%
Dairy
- This section was written by SOMPA's marketing manager with additional information taken from the processor survey to ascertain processing activities in Scotland.
Horticulture
- Producers were asked how and where they marketed their produce and volumes sold.
- Processors and retailers were asked where they sourced their produce and volumes bought
- The survey suggests that 80% of root crops and 35% of other vegetables and salads consumed in Scotland are produced in Scotland.
- Root crops account for approximately one third of vegetable sales. Therefore 80% of one third = 26.4.
- Other vegetables and salads account for the remaining two thirds of vegetable sales. Therefore 35% of two thirds = 23.1.
- Therefore by adding these two figures together it is possible to calculate the market penetration level for organic vegetables of 50% (49.5%).
- 70% of all organic fruit consumed is exotic/citrus, Of the remaining 30%, the survey found that 10% is sourced from within Scotland. This equates to a market penetration figure of 33%.
Arable
- Producers were asked how and where they marketed their produce and volumes sold.
- Processors and retailers were asked where they sourced their produce and volumes bought.
- Based on results from the processor survey, market penetration for organic arable crops in Scotland is an estimated 30%.
Aquaculture
- Producers were asked how and where they marketed their produce and volumes sold.
- Processors and retailers were asked where they sourced their produce and volumes bought.
- Based on the results of the processor and retailer survey, market penetration for organic aquaculture is estimated to be 90%.
Consumer Data
Taylor Nelson Sofres ( TNS) were contracted to provide information on consumer trends and purchasing patterns and the value of the retail market for organic produce in Scotland.
- Information from the TNS Superpanel (a continuous consumer market research panel) generated data regarding consumer trends in Scotland.
- In addition an omnibus survey asking additional questions directly relevant to the project proposal was conducted.
- The following questions were asked in the omnibus survey:
- Do you buy organic food or drink at all nowadays?
- Do you actively look for Scottish Organic food and drink to buy?
- Where do you buy your organic goods from and most often?
- What factors, if any, deter you from buying Scottish organic goods?
- What Scottish organic goods to you tend to buy most often?
- A summary of the TNS report is included in chapter 4. The full report is in Appendix 2.
Overall market penetration level of Scottish organic produce:
- The total retail market for organic produce is broken down by sector.
- To calculate what proportion of the overall market value was sourced from within Scotland the percentage level of penetration by sector was taken from that sectors share of total organic retail sales to give a sector value towards an overall penetration figure for Scotland. For example, Scottish organic beef is estimated to have a market penetration level of 71% and organic beef accounts for 5% of the organic market. 71% of 5 is 3.5, which is the beef sectors value used to calculate the overall penetration figure for Scotland.
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