At the end of 2015, there were about 510 million inhabitants1 living in the European Union. The GDP of this common economic marketplace was valued at EUR 14.7 trillion2.
The EU organic food market is estimated to have reached EUR 24.0 billion, a 7.4 percent rise in 2014 and in comparison to 20133. In terms of distribution and overall market size within the Eurozone, Germany remains the largest organic single market, followed by France, UK, Italy, and Sweden.
GERMAN ORGANIC MARKET, ‘BIOMARKT DEUTSCHLAND’
In 2015, the organic sector’s share in total expenditure on food and drink reached 4.7 percent. On an annual basis, this represented a gain of 10 percent, combining an increase in demand quantity of 9 percent and a rise in prices for organic food of 1 percent4. The market volume of the German organic food market can be estimated at about EUR 8.0 billion in 20155.
Organic eggs, flour, fresh vegetables, milk and fresh fruits remain most the desired organic products by total sales in 2015. High volume growth was also seen in organic cooking oil, yoghurt, dairy drinks, and meat. Innovative organic snacks, candy, and beverages are also enjoying great popularity. Vegan milk alternatives and baby food show highest share of organic input materials. Due to these trends, local organic farmers are trying to expand cultivation areas particularly for legumes, protein plants, organic fruits and wine.
Behavioral scientists see the move towards organic as a social trend and paradigm change in eating behavior, as people from all walks of life are now consuming organic food. This is especially true for young families with kids, women, and seniors over 65 years old. However, reasons for purchasing organic food vary. Occasional buyers (25% of all German households, 13% of total sales of organic food6) mainly look for freshness and taste. Higher concentrations of flavonoids and phenols in most organic food are seen as food quality attributes. Reduced nitrate levels and less residues of pesticides in the food as well as less harmful auxiliaries and additives in final organic food products, are appealing as well. Occasional buyers buy organic food to avoid allergic reactions, to reduce cancer risk, and to increase life expectancy. Intensive buyers act differently. This group (29% of all German households, 80% of total sales of organic food6) supports motives like animal-friendly husbandry and reduced damage to soil and water bodies from pesticides emitted by the conventional agriculture industry. Reasons that this group gives for purchasing organic food products are to promote greater biodiversity, develop a more sustainable agriculture industry, and make the environment more resilient to global warming and other negative effects of climate change.
Most organic food consumers are willing to accept higher prices in return for higher food quality. Organic eggs are priced at about two and a half times more when compared to the prices for eggs produced in cages. For meat produced to animal-friendly husbandry standards, significant markups for organic meat can be achieved when compared to meat produced in factory farming.
Since conventional food stores in Germany cleared retail space for organic food products 25 years ago, market forces have changed. Today, conventional food stores (department stores, supermarkets, discounter and drugstores) provide about 60% of organic food available and natural food and health food stores provide about 18%6. The remaining 22% is split between bakeries, butcher shops, farmer markets, internet subscription etc. To diversify from competition, bakeries and butcher shops focus more on direct sales, while natural food and health food shops offer a wider range of organic food specialties. Home delivery services evolved and offer organic food via internet subscription. A number of premium restaurants serve organic food-only. More and more school kitchens, canteens of universities and public institutions serve organic food-only.
OPPORTUNITIES FOR CANADIAN EXPORT-ORIENTED PRODUCERS AND FARMERS
While organic food became a huge business opportunity for many European farmers, retailers and processors, the organic food production within the EU-is not moving at the same speed. With agricultural space for organic food production being limited, the major share of the growing demand will be met more and more by imports. In past years, the total number of organic food importers in the EU increased significantly, with the German marketplace holding the most organic food importers and making it the hub for organic food import, processing and distribution within Europe. Therefore, we see good opportunities in this marketplace for Canadian export-oriented organic food processors and farmers.
If you would like to learn more about the organic food markets and trends in Europe, please don’t hesitate to contact us anytime.
1 Eurostat: http://ec.europa.eu/eurostat
2 Eurostat regional yearbook 2016 edition: https://bookshop.europa.eu/en/home/
3 The European Commission: http://ec.europa.eu/agriculture/organic/index_en
4, 6 GFK Household Panel, issue 06/2016
5 Greentech Avenue Environmental Services Analytics: firstname.lastname@example.org