The message at Anuga Organic is that an increasing number of suppliers of conventional food are now also offering organic products. In addition, all of the important German retail chains are also offering extensive ranges of own-brand organic products, leading to significantly more intense competition.
Increasing numbers of consumers are no longer content to have organic food only labelled with the EU's organic product logo. Additional trust is generated by the labels of organic farming associations. That's because the EU's organic product logo only provides information on whether certain minimum standards were maintained. But whereas only some of the fields may be converted to organic farming for the EU certificate, the members of organic farming associations have to convert their entire farms. Since this process takes about two years, farmers need to get through this financially challenging period.
The outlook for producers and dealers continues to be good, since the organic food market is still growing in Germany, albeit somewhat slower than in previous years. In 2010, the turnover from organic food in Germany rose by two per cent to €5.9 billion, representing an almost threefold increase within 10 years. In the mass market for general organic provisions, German discounters still are ahead of their competitors. At these stores, consumers primarily buy organic potatoes and carrots, while the total number of organic products in this segment substantially declined after product ranges were streamlined last year.
The driving force in the organic food market is the natural foods specialty trade, which saw turnover increase by eight per cent last year. The operators of supermarket chains for organic products did particularly well, opening several dozen new stores in Germany last year. Of the approximately 2 400 natural food specialty stores in Germany, around 400 are supermarkets with a sales area of more than 400 square metres apiece. These stores mainly cover the demand for organic food in large and medium-sized cities. However, there are far more organic food shops in western and southern Germany than in the eastern parts of the country, where the organic food market is only well established in Berlin.
Organic food market could grow substantially worldwide
The situation is similar for Europe as a whole, where there is a clear East-West divide. Germany is the largest organic food market in the EU, generating almost €6 billion in turnover each year. It is followed by France, with an annual turnover of about €3 billion and the UK, with a turnover of around €2 billion. Anuga's partner country this year is Italy, whose organic food turnover of €1.5 billion per year puts it in fourth place within the EU. Although organic products still don't play an appreciable role in Eastern and South-eastern Europe, the 27 EU countries as a whole generate about as much turnover in this sector as the world's largest organic food market, the United States. Europeans and Americans both consume about €17 billion worth of organic food products per year.
That there is still room to grow for organic product turnovers is demonstrated by the average amount of organic food consumed in the various countries. The results show that the Danes spend the most money per capita on organic products (€138.80 per year), followed by the Swiss (€132.80) and the Austrians (€103.90). At €70.70 per year, Germans' per capita consumption is about average for Europe but still higher than that of Americans, at €57.30. The organic product boom of recent years totally passed by the Romanians, who only consume ten cents worth of organic food products per year on average, as well as the Bulgarians (70 cents) and the Poles, who only spend about €1.30 on organic products per year on average. The Russians have so far also said ‘nyet’ to the organic food trend.
Despite these differences, there is now a lively international trade with organic products, because national producers cannot meet the domestic demand in certain areas. The main suppliers of organic new potatoes, for example, are Israel, Egypt and Italy. In addition, German retailers need more organic carrots than the country's farmers can produce, which is why half of these carrots are now imported from abroad. The Dutch are the main suppliers for Germany, followed by the Israelis and southern European countries.
In 2011, the trend in the organic food market is towards an expansion of the product ranges and, above all, towards higher ethical value. That's because more and more consumers want the standards for organic products to be higher than those of the EU's organic food label. Adequate conditions for animal husbandry are as important to buyers as the regional origin of the products and fair producer prices. However, experts are calling for standardised definitions, because buyers could otherwise get confused by ambiguous advertising messages. The organic farming association Naturland has already taken a step forward in this regard. After drawing up mandatory social guidelines, this organisation recently introduced a voluntary certificate known as ‘Naturland fair’ for products produced in a fair manner. In this case, the producer price not only covers the production costs, but also includes an appropriate profit for the supplier.
