Market developments

The market for sustainable consumer products continues to grow in most Western industrialised countries. An ever-larger range of organic products, new sales channels and strong customer loyalty result in sustainable growth in sales. Nevertheless, reliable market data that illustrate the development of the entire market remain scarce.

As data for 2015 are not yet available, the latest annual European growth numbers by Organic Monitor cover 2014. They show an expansion of 7.6%, bringing the size of the European organic food market to EUR 26.2 billion (2013: EUR 24.3 billion). Per capita spending in Europe amounted to EUR 34 in 2014. Within Europe, Switzerland leads, with a per capita organic consumption of EUR 221, followed by Luxembourg and Denmark, with per capita spending of EUR 164 and EUR 162 respectively.

Although the combined numbers for the European organic food market for 2015 are not yet available, several individual countries have already published their data on organic food sales, confirming growth across European countries. Sweden reported the highest growth in 2015, at a spectacular rate of 39%. Germany remains Europe’s largest and the world’s second-largest organic market in absolute numbers.

The share of the organic market as a percentage of the total food and beverage market is the highest in Denmark (8.3%), followed by Switzerland (7.7%) and Sweden (7.7%).1

In 2015, Germany’s organic sales exceeded EUR 8 billion for the first time. With total sales of EUR 8.6 billion, the market grew by 11% (2014: 4.8%). Germany remains the largest European market for organic products, accounting for almost one-third of total organic food sales in Europe. Organic food represents 4.8% of the entire food market in Germany according to AMI (Agricultural Market Information Company). Sales of organic food via conventional retailers accounted for 55% of total organic food sales, showing an increase in sales through this channel.

The organic market in France has been growing steadily for several years now and remained the second-largest organic market in Europe in 2015. According to Organic Market Info, turnover in the French organic sector has now reached EUR 5.5 billion (preliminary estimate for 2015), which implies 10% growth compared to the year before. The ‘big food corporations’ (Super U, Monoprix, Casino, Carrefour and Leclerc) have a share of 46% of the organic market and organic products represent 2.7% of total food sales via the conventional retail channels. According to Organic Market Info, the conversion of conventionally farmed land to organically farmed land is also accelerating significantly, having expanded by 17% in just one year.

The organic market in the United Kingdom (UK) was worth GBP 1.9 billion in 2015, according to the organic market report of the Soil Association. The organic market as a whole grew by 4.9%, while the offering of organic products in supermarkets, remarkably, grew by only 3.2%. Supermarkets currently represent 69% of the UK organic market. Sales of organic products via meal boxes and through online sales (representing 12% of the organic market) have risen by 9.1%. Sales by independent retailers (16%) have increased by 7.5% and the organic catering sector (3%) registered 15.2% growth. Relative to the total food market, organic food sales have a share of only 1.4%.

For the second year in a row, the Swedish organic food market registered spectacular growth in 2015, expanding at a rate of 39% (2014: 45%), according to Ekoweb Sverige. This brings the size of the Swedish organic market to over EUR 2 billion. Eighty percent of Swedish consumers claim to buy organic products at least occasionally. Sales are forecasted to double by 2025. A higher growth rate seems unrealistic. The biggest challenge to continued growth will be the availability of Swedish organic products, given that the Swedes prefer local produce.

The Danish organic food market is relatively small in size (just over EUR 1.0 billion), but despite its size this is an important market for Triodos Organic Growth Fund. Of the fund’s current four investments, two are Danish companies (Aarstiderne and Naturfrisk). The Danish organic food market scores high on many fronts when it comes to relative numbers. According to Organic Denmark, the organic food market grew by 12% in 2015 (2014: 6%). Spending per capita, at EUR 162, is the third-highest in the world. Besides the 12% growth rate and high spending per capita, the share of organic food relative to the total food market is also astonishingly high, at 8.3%. The Danish government aims to continue to boost the growth of organic consumption and has therefore set up a programme for certifying organic out-of-home consumption. Over 1,000 hotels, restaurants and canteens have already been certified and serve meals with at least 25% (bronze), 60% (silver) or 80% (gold) organic ingredients.

The preliminary estimate for the growth rate in the Netherlands in 2015 is 15%, based on Bionext’s organic retail sales figures for the first nine months of 2015. Conventional supermarkets are the biggest contributors to this growth. Organic specialty shops, remarkably, do not benefit from the expansion, as according to Bionext their sales decreased in the first half of 2015. This decline seems to stem from the fierce competition from conventional supermarkets.

The positive trend in the market for organic consumer goods is expected to continue in the years to come. According to Organic Monitor, the European market for organic food should continue to grow by approximately 6.0% per annum in the coming years. The main drivers for this growth are strong consumer demand for organic and health food products, increasing distribution through mainstream retailers also offering organic private label products and rising demand in the out-of-home market.

1 Research Institute of Organic Agriculture (FiBL)

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