The market for organic cotton started taking off in the UK about three or four years ago. Its value was first assessed by the Pesticide Action Network UK for the year 2002. Participants at a meeting with companies in the sector were surveyed (March 2003) and the market estimated at around £25 million. A subsequent survey of 2003 found that sales had increased to £34.5 billion, a growth of 38%. A more detailed survey was carried out to estimate the size of the 2004 market. Questionnaires were sent to several dozen companies, as well as to NGOs and other organisations with an interest in organic cotton, and/or fair trade cotton and responses received from 38 of these. Results indicated that sales had increased by a further 50% in 2004 but also suggested that market size had been slightly overestimated in 2002 and 2003. A conservative estimate of around £46 million is now suggested for the 2004 market.

Estimating market size is difficult. There are uncertainties about the retail value of the organic cotton in products made from cotton blends which are only partially organic. Such cotton blends are sold by Marks and Spencer's and other large retailers and manufacturers. Some of the products made from blends are sold at higher prices than others for the same weight of cotton used, making it hard to estimate final retail value of cotton in blended organic cotton products. The issue is further complicated by a large increase in identified stockists of organic cotton. There are now some 200 outlets selling organic cotton (more than double the number from 2003), and the larger organic cotton brands each have at least 20 stockists buying their products wholesale. Most of these have not been surveyed yet, or did not respond to our survey. Thus, the value of wholesale goods sold in small independent retail outlets, such as health food shops, fair trade shops, organic shops selling food and other goods, market stalls, has not been accurately reflected in our survey. The estimate of £46 million is conservative and the market may be larger than we think.

Company profile
The number of companies involved in the organic market doubled in 2004; this includes new brands, retailers, companies entering the market as exporters to the UK and companies blending organic cotton into their product lines. Most commercial companies offer a mix of services and activities, with retail being the main activity (62.5% of companies, a 47% increase from 2003). However, most companies have a diversity of activities and income sources (a mix of retail and wholesale being most common), with many companies (around a quarter) also offering design, printing and import/export. Fifty percent of respondents offered wholesale products. However, this may not accurately reflect company activities as most of our respondents were larger, well established companies. A more specialist retail only sector does exist, which has not yet been surveyed in detail. More companies are also offering promotional clothing*, and additional entrants to the sector include specialist volume printers offering ecologically friendly techniques. 

Sales mix
In 2003 sales of babywear were most important followed by womenswear, yogawear, and menswear. This sales mix became more balanced in 2004 with a much greater range of products available, notably menswear. While womenswear (21% of companies), and children's and baby clothing (34% of companies) remain the main products sold, home textiles and menswear (15% of companies sell these respectively) are increasingly common. Although men's ranges remain limited, 2005 sees the arrival on the market of Katherine Hamnett's organic menswear. Yoga and sportswear make up 6% of products offered, and the remainder includes sanitary products and fibre. Sixty-three percent of companies sell only 100% organic cotton (with many of these offering fair traded** organic). Product origins India (25%) is the largest supplier to the UK market of both fibre and finished products, ahead of Turkey (19%), Africa (Egypt and Tanzania), other Asian countries (Thailand), Latin America (especially Peru), Europe, Israel and the USA. India benefits from both easy trading relationships, a good manufacturing sector, and by offering fairly traded organic products, in demand from retailers and consumers alike. The share of African organic fibre is increasing rapidly as well. 

Constraints to growth
The lack of small scale wholesale of a diverse range of fabrics and basic goods at affordable prices or that are easy to source for companies either too small to be vertically integrated means that some £4-5 million of retail sales is being lost. Very rapid demand growth by consumers also led to many companies running short of stock, constraining growth and sales as well. Many companies saw their turnovers double in 2004, despite this. Keys to market growth The biggest drivers for future market growth are public education and awareness (25%), costs (achieving economies of scale in the supply chain) and advertising (21% each) and quality of design (19%). Strong certification schemes were important for 11% of respondents, while only 4% thought competition was important. 

Future growth
Although the UK organic cotton market has almost doubled in the past three years only around 0.6% (around 700 tonnes) of total cotton sold in 2004 was organic. This remains small compared with the markets in Germany and Switzerland. Potential barriers to growth in the UK are the lack of finance for start up business and lack of government support for sustainable business and trade. However, despite these impediments, signs are that the market for organic cotton will continue to grow rapidly in 2005-2006 in the UK. The approach of companies and brands is more professional, design and marketing are increasingly efficient, media and messages are getting through, and consumers are responding. Products are of much higher quality and desirability than in 2002. If growth continues in the 40 to 50% range as we expect, then it will be worth £100 million within two years. 

* Promotional clothes are unprinted items that can be printed with the purchasers own logo or design.

** We use the term ‘fair traded’ as there is as yet no formal fair trade mark for textiles to cover those companies applying principles of paying social premiums and ensuring high labour standards in the supply chain.

Simon Ferrigno was formerly the Cotton Project Officer at PAN UK and is now the Farm Development Program Director at the Organic Exchange, California, USA; simon@organicexchange.org