How Biona, the UK’s largest organic food company, convinced shoppers that cheaper isn’t always better

If you frequently browse the organic produce section of your supermarket, chances are you’ve come across Biona products.

The company, which has a significant presence in the canned goods sector, has become synonymous with the organic market.

With hundreds of products and exports to over 30 countries, they have helped shape what has now become a billion-pound industry within an industry.

Its headquarters, tucked away on a residential street in southwest London, are as modest as its founders, Noel McDonald and Donata Berger, who started the business from their restaurant kitchen.

Thirty years later, this couple runs the largest organic food company in the country.

But what’s behind its meteoric rise and how much will consumers be willing to spend on organic products in a cost of living crisis?

How a public health crisis catapulted Biona to fame

While Biona may be a familiar presence on the shelves of most leading supermarkets, it took some time until it was accepted by a significant portion of shoppers.

Appetite for organic produce was minimal when McDonald’s first became interested in organic farming in the 1970s.

After university, he joined a small commune on the west coast of Ireland before purchasing his own farm.

“After a number of years, I felt like I wasn’t having any real impact on the world,” he tells This Is Money. “I was just solving my own food supply problem, but I wasn’t changing anything.”

She packed her bags and moved to London and within a few years opened Windmill Wholefoods, a wholefoods and organic produce store in Fulham when “there was very little organic produce at the time”.

In 1981, McDonald met German reflexologist Berger and the two joined forces to open one of the country’s first vegetarian restaurants.

In the evenings, they tested products in the restaurant kitchen, which led to the development of Biona’s first product, homemade granola.

“We wanted to take it to another level, beyond a local scope in Fulham,” says McDonald. “We wanted to have a bigger impact on the food market.”

After officially launching Biona in 1992, they built a small but dedicated customer base by selling through wholesalers and health food stores.

However, it took the slaughter of millions of heads of cattle and a public health crisis for Biona to become a popular trend.

Berger says: “The stroke of luck was the BSE (mad cow disease) crisis. It really created a huge awareness about the connection between what we eat and our health.

‘Supermarkets were also in a panic. Suddenly, organic food was on a wider platform and they were desperately looking for something that would give their customers the assurance that they were selling food that was safe to eat.’

The brand quickly became a staple in high-end supermarkets and landed a listing in Waitrose for some of its tinned goods.

Thirty years later, Biona achieved a total gross sales value of £24 million in 2023, with year-on-year growth of 16 per cent.

While retailers have increasingly complemented brands such as Biona with their own organic range, McDonald’s and Berger say demand for their own products has kept pace.

The launch of their online offering has helped offset the impact of the disappearance of health food stores during the pandemic. They now claim to be Ocado’s number one supplier of organic food and do “quite a bit of business with Amazon”.

Why there is no such thing as cheap food

Biona’s growth figures appear to be at odds with the current cost of living crisis in the UK, as consumers struggle to keep up with rising food costs.

This is because Biona products tend to be more expensive.

A tin of Biona green beans can cost over £2, while the supermarket equivalent would cost between 50p and £1.

However, the types of customers Biona targets are largely shielded from the worst of the cost of living crisis.

“We don’t market products aimed at the lower end of the market,” McDonald says.

“Some people have problems with the cost of living crisis, but others go to restaurants, pubs… They may have problems with their next holiday in Thailand, but not with the food.”

Biona has fundamentally focused on customers who are committed to buying organic products not only for health reasons, but also for environmental reasons.

“There are a lot of people who are concerned about what they eat and what they put in their mouths, and about their children,” McDonald says. “There are a growing number of people who are a little bit more conscious about their diet than, say, 30 years ago.”

That may well be the case, but the dominance of budget retailers such as Aldi and Lidl shows that consumers are still shopping with their budget in mind, rather than their perceived health.

Recent figures from Kantar show that Aldi is now the UK’s largest supermarket, with Lidl not far behind.

Berger says: “Obviously we can never compete with food from Aldi or Lidl, it’s not possible. We want to make sure that what we sell comes from a sustainable supply chain.”

However, this is not cheap and may irritate some consumers looking to grab a bargain when the cost of everything else is rising.

However, recent bad weather and its impact on British farming shows the situation could become more difficult.

“I think the big mistake is that there is cheap food, but there isn’t,” McDonald says. “Someone is going to have to foot the bill somewhere, whether it’s pollution on farms, which needs to be cleaned up, or plastic in the oceans, which also needs to be cleaned up.”

“There is no such thing as cheap food. I wouldn’t go and work on a farm for the wages of producing something that could be sold for 50p in a supermarket chain. It’s not realistic.”

Organic market explosion

Although Biona may be a big fish, the small pond is growing.

The fact that consumers are no longer fazed by supermarkets’ own-brand organic products shows how widespread this market has become.

In the UK, it has grown by 25.4 per cent in three years and is now worth a record £3.4bn.

The growing presence of stores such as Whole Foods and Planet Organic on British high streets further indicates the extent of the demand.

However, the market remains largely protected from being overwhelmed by new competitors, as is the case with other product categories.

Organic is a legal definition that means any company claiming to sell organic products must be certified and have an annual inspection.

“Unlike other trends where there’s no real definition of gut health, for example, there’s no legal definition, no one comes to inspect your accounts,” McDonald says. “Most of the time it’s just marketing.”

Marketers jump on the wellness bandwagon

That’s not to say Biona isn’t benefiting from marketing trends. Some of its best-selling products at the moment include kimchi and sauerkraut, which fuel the recent interest in gut health and wellness.

“When a trend like veganism comes along, everyone jumps on board and thinks it’s going to transform the world,” McDonald says. “Then the balloon deflates and deflates, but it’s still there.”

‘Now every restaurant you go to sells vegan food, which wasn’t the case before. This has greatly increased the consumption of vegan food, but the hype has worn off.

“That’s kind of what’s happening in the world right now. A search for something to praise and make noise about. These things come and go.”

While the couple criticizes “traders” who jump on certain trends, Biona has also capitalized on many trends.

They offer products that cover recent trends including raw food, high protein products, gut health and vegan eating.

Their setup allows them to jump into action if they spot a trend they could profit from.

McDonald says: “We are a fairly agile company. We have our own production facilities, so we can quickly change locations and create new products.”

“We focus a lot on production, we launch between 40 and 60 new products every year. It’s about working on new ideas, but also expanding categories in which we are already active.”

The pair are comfortable with being pioneers and having been the first of their kind, and Biona is unlikely to lose much ground any time soon.