Germany remains Europe's top organic market in terms of sales, with France in second place and Italy in third. Switzerland records the highest per capita expenditure. The statistical yearbook "The World of Organic Agriculture" published by the Research Institute of Organic Agriculture FiBL and the international umbrella organisation IFOAM Organics International, as well as various country reports, provide a good picture of the development of the markets. The international data refer to the year 2021, while more up-to-date figures and analyses from 2022 are available for individual countries. The article looks at the markets in Germany, France, Italy and Switzerland. The overall trend in 2021/2022 shows a slowdown or decline in organic sales.
The EU Organic Seal
In general, after the organic hype in 2020, the signs continued to point to slight growth globally and in the majority of European countries. Global sales of organic products (retail sales) reached just under 125 billion euros in 2021 and thus grew by another 4 billion euros compared to 2020. Of this, 46.7 billion euros were generated in the 27 EU countries (Europe 54.5 billion euros) and 48.6 billion euros in the United States (North America 53.9 billion euros).
Germany remains Europe's largest single market
Although growth rates in the second pandemic year of 2021 shrank significantly compared to 2020, after 15% in the first Corona year, they were only up 3.8% to 15.87 billion euros in 2021. In 2022, organic sales declined by 3.5% for the first time in many years. According to the statistics of the Arbeitskreis Biomarkt, however, at €15.31 billion it remains well above the pre-Corona level of €14.99 billion (2019). According to BÖLW (Bund Ökologische Lebensmittelwirtschaft), the share of organic products in the market is 7%.
If one breaks down the turnover according to sales channels, it becomes clear that in 2022 the German specialised trade as well as farm shops and markets, bakeries and butchers etc. suffered severe declines of -12.3% in natural food shops (share (20.5%) and -18.2% in other sales outlets (share 12.9%), while the food retail trade was able to expand its organic market share from 62.3% to 66.6% with an increase of 3.2% to 10.2 billion euros. These figures were calculated by the Arbeitskreis Biomarkt on the basis of GfK, Nielsen, biovista, Kommunikationsberatung Klaus Braun.
Germany remains the leader in Europe and is the second-largest organic market worldwide after the USA. However, with per capita spending of €191 (2021), Germany ranks 6th in Europe, while Swiss consumers had the highest organic food spending of €425 (2020). On average, consumers in the EU-27 spent €68.20 per year on organic products.
The development of the German organic Market 2022 (photo: Karin Heinze)
France: Second largest market in Europe - consumer confidence in organic label declines
With a market volume of €12.6 billion (2021), France is the second largest organic market in Europe, after Germany, even though it already experienced a slight decline of 1.4% in 2021 compared to 2020 (€12.77 billion). The French agency for the development and promotion of the organic market, Agence BIO, published its Organic Barometer for the 20th time in March 2023 and found that consumer confidence in organic labels is falling. The proportion of regular organic consumers fell by 16 points in 2022 compared to 2021, with only 60% of French people saying they consumed organic food at least once a month in the last 12 months. The proportion of people who have not consumed any organic food in a year has almost doubled since 2021, reaching 17% in 2022. Also due to other factors such as inflation and increased costs in many sectors, French consumers are holding back on buying organic products, analysts say, although the price of organic remains relatively stable and acts as a brake on inflation.
Organic Barometer France, Agence Bio (Screenshot)
Consumers criticise organic information deficit
The results of the Bio-Barometer survey are surprising: 52% of the respondents think they do not have enough information about the origin of organic products, only 37% believe they are sufficiently informed. In contrast, 82% of the French believe that organic farming contributes to the preservation of the environment, soil quality and water resources, 60% believe that organic farming allows producers to be adequately paid. In terms of organically farmed area, France is among the European leaders with 2.8 million hectares (2021).
In France, the food retail sector is also capturing an increasingly large share of the organic market. However, it remained stable in 2020 and 2021. Graphic Agence BIO/ANDI
Great ambitions in out-of-home catering
As for demand in out-of-home catering, canteens are investing with the implementation of a law to reach their target of 20% organic content on the plate, reports Agence BIO. The total turnover of food for catering and mass catering in France is close to 20 billion euros: of this, the organic share in commercial catering is only about 1.67%, while in mass catering it is about 6.6% (377 million euros). With about 80,000 canteens and 180,000 restaurants in France, these are two important growth areas where organic products from French farmers can be incorporated, analyses Agence BIO.
Switzerland: organic consumption on the rise - highest per capita expenditure
"In the last decade, the market with organic food has developed from a niche market to an important sales and trend market with a market share of 11.2 %," judges the Organic Market Report of the Federal Office for Agriculture, Market Analysis Division, of March 2022.
However, a similar development as in Germany is also visible in Switzerland and the sales of organic food declined by 2.2%, but also the sales of non-organic food, namely by 4.9%. The declines were mainly explained by the normalisation of consumption after the end of the pandemic, they say. Looking at the period from 2018 to 2022, it is clear that demand for organic food grew significantly, by 22.5%, from CHF 2.68 billion to CHF 3.28 billion. The market share of organic food in total food sales in the Swiss retail trade increased from 9.9% to 11.2%.
Organic consumption was maintained but price sensitivity increased
The representative survey of about 1000 people throughout Switzerland illustrates that the price of organic food is rated as the most important barrier to purchase. As a result, discounters have become the second most important sales channel for organic food at a low level, after traditional food retailers (analysis of the household and retail panel by NielsenIQ Switzerland).
The reach for the cheaper organic product could continue, say experts. The fact is that according to the Biobarometer survey conducted by the Research Institute of Organic Agriculture FiBL, the vast majority of study participants intend to maintain or further expand their organic consumption in the future. Only 16% of the participants said that they intended to consume less organic food in the future due to rising prices. Nevertheless, experts estimate that the retail trade will continue to expand its organic assortment. This is because organic food has a positive sustainable image. This aspect will continue to be an important driver for the purchase of organic food in the future, according to the report.
Italy: Conventional retail is winning
The Italian information portal Bio Bank published "Focus Bio Bank" for the sixth time in mid-March.
(Issuu https://bit.ly/3k9L45o) . The balance of organic sales in conventional retail and organic specialty shops is taking place in an increasingly complicated scenario where challenges are multiplying with a domino effect, Bio Bank writes. Despite everything, organic food sales in Italy continue to grow, albeit at a slower pace.
In the market, which has more than doubled in the last decade, organic sales in supermarkets almost quadrupled to EUR 2.3 billion in 2022 (+263% compared to 2013). In contrast, in the historical channel, organic specialist shops, it fell to EUR 0.9 billion (-15 % compared to 2013). "Within ten years, the organic shares of the retail channels have reversed in the overall market. For supermarkets, the share has almost doubled (from 31 to 58 %), while for shops it has almost halved (from 53 to 23 %), which is in line with developments in France and Germany," comments Rosa Maria Bertino, co-founder of Bio Bank. This is accompanied by the death of shops in the specialised trade: in 2021, the number of organic shops dropped to 1,240, which corresponds to an overall decline of 13.7 % in four years. There was also a drastic decline in the number of shops affiliated with specialist retail chains: It fell by 35 % to 434 shops.
In the Italian food retail sector, 6000 organic products are represented as private label. Graphic taken from Focus Bio Bank 2022
Organic is booming in the LEH
The trend towards shifting purchases to food retail, which has been observed for some time, intensified further in 2022, writes Bio Bank. There is a veritable organic explosion in supermarkets and hypermarkets. This also applies to organic private labels, which are on the rise across Europe. In the 26 chains analysed by Bio Bank (24,000 sales outlets) there are more than 22,000 organic products, 6000 of which are private labels. Coop ranks first with 1,050 organic references, Dm second with 573, Selex third with 421.
Bio Bank critically notes: "Organic is and remains strategically important for the retail trade. But what is the use of conquering the market if you lose your soul and your vision. Convenience is always cited as a reason for LEH organic, but it is of enormous importance that the specialised trade continues to offer authentic, innovative organic products at honest prices.
The Focus Bio Bank - Supermarkets & Specialist Retail 2022, can be read for free on Issuu https://bit.ly/3k9L45o. Article on the Bio Bank Blog https://bit.ly/3xym4I5
Author: Karin Heinze, BiO Reporter International
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