Just over two months ago, the most recent instalment of Biofach was held in Nuremberg. The event is the biggest organic food fair in the world, an annual event held in conjunction with Vivaness, the natural cosmetics fair. Around 3,000 exhibitors presented both proven and innovative products, ranging from A for argon oil to Z for zucchini chips – with something to suit the tastes of every single one of the 50,000 or so visitors. Outside of the exhibition halls, consumers have long been able to choose from a huge selection of organic foods – irrespective of whether one prefers classic home cooking, follows a vegan lifestyle, opts for uncomplicated convenience products or values superfoods above all else. The fact that there is such a broad spectrum of products on offer has surely enhanced the consumer trend towards organic foods and produce. This has meant that for some years now, Germans have been spending steadily more of their food budget on organic produce.
In 2017, the share of organic foods and products including beverages of household food budgets amounted to 5.4%. A glance at developments over recent years shows continual growth: since 2004, the share of organics has more than trebled, with recent growth in the period from 2016 to 2017 indicating another rise of 0.2 percentage points. These are the findings of the GfK household panel, which regularly surveys 30,000 heads of households on their total purchases of daily consumables.
The latest figures reveal one thing: Germans are clearly still keen on organic produce, with their appetite for such produce actually above all increasing. This has resulted in further growth for the industry. The current growth represents an increase of a good 6%. And this comes despite the slight decline in prices (-0.6%). Growth in terms of volume even amounts to 6.7%.
At the outset of the organic movement, the range of food and produce on offer was very limited: grains, dried fruit and a few macrobiotic specialties. In essence, these were the cornerstones of “Peace Food”, whose range was originally available from a Berlin shop, which has since closed. However, this was Germany and Europe’s first health food shop. At the time, organic produce was not so much a food choice, but represented an attitude to life, with “Peace Food” being strongly influenced by Indian yogic tradition. As the Berliner Tagesspiegel reported in June 2007, organic meats, sausages and even alcohol were very difficult to find back then, although there were plenty of joss sticks, eco-friendly paper and candles around. Today, the product ranges on offer from organic food and produce suppliers encompass a wide variety of foods and beverages, while consumers no longer have to go to health food shops to find what they want. It is the supermarkets and discount stores that have benefited the most in recent times from the appetite for organic produce, as a look at the breakdown of sales by outlet shows. Just under a quarter of expenditure on organic produce is accounted for by supermarkets, with discounters a close second at 22%. This is surely because traditional outlets are increasingly filling their shelves with organic products alongside conventional products, in this way responding to consumer demand for natural and nutritional foodstuffs. While the supermarkets and discounters are running roughly equal in terms of organic spend, discounters such as Aldi, Lidl et al are very clearly ahead on the “non-organic” front. At 39% of the budget for conventionally produced foods, they account for the largest share, with the supermarkets a not insignificant ten percentage points behind.
In total, drug stores account for 12% of expenditure on organic produce. The data shows that adding organic produce to their ranges was definitely the correct decision. With a share of expenditure totalling just 1%, dm, Rossmann et al rank as “also rans” in terms of conventional food and beverages, while their share for organic products is twelve times as much. This is a huge disparity which is not mirrored by any other outlet. Other suppliers, such as direct marketers, weekly market traders and organic farmers cannot compete with the drugstores on organic produce, accounting for just 7% of the organic budget – although that is still more than double their shares for conventional products (3%). Selfservice department stores also account for 7% of organic spend. This means that the sale of organic produce is less important for them, although for conventional produce, these stores record sales that are at least twice as high (15%). Bakeries and butchers are ranked at the lower end of the scale for organic as well as “non-organic” sales, accounting for 6% and 7% of the budget for such produce respectively. Bringing up the rear in both segments, however, is online trade. This sector can boast just 3% (organics) and 1% (conventional). Health food shops, the pioneers of the industry, have to compete with all these competitors, but they still currently account for 17% of the organics budget – although this does include the health food supermarkets. Presumably, a significant number of consumers still prefers to put its faith in the old and the new organic produce specialists, rather than trusting the competition, where organic produce is sold only as part of a wider range.
However, when shopping at the supermarket, discount store or elsewhere, to which products do customers now pay particular attention when it comes to organic labelling? The ratings for selected product groups show that there are significant differences between individual products: for instance, a share of 22.4% of sales shows that more than one in five eggs bought now originates from an organic farm. However, in the “fruit, vegetables and potatoes” segment, at 8.9%, the share of organic produce is markedly lower, although this is only an average value and individual vegetables and fruits may record a higher share. Dairy products, dietary fats and cooking oils, along with bread and fresh bakery products account for between 6.3% and 6.8%, with hot beverages recording 5%. With an organic share of just 4%, confectionary no longer achieves this level. Around 3% of fresh meat and poultry, canned product and non-alcoholic beverage purchases are organic, while the figure for processed meat and sausage products is 2.5%. Alcoholic beverages are ranked lowest of the selected product groups with an organic share of just 1.7%. Clearly, consumers prefer conventional beers, wines and champagnes – and organic alcohol products are the only examples in the selected product groups to record share losses (-5.4%). Conversely, other products recorded significant growth in the period between 2016 and 2017. Dietary fats and cooking oils (16.3%), canned goods (15.7%), meant/poultry (13.2%), non-alcoholic beverages (12.3%) and dairy products (10.6%) all recorded double digit growth rates. There is still room for growth with eggs, too, despite the fact that this food group is already far ahead in the organic rankings. Here, growth amounted to 7.8% from 2016 to 2017, which is just as high as for meat and sausage products. In the same period, confectionary recorded growth of 6.9%, with fruit, vegetables and potatoes up 5%. Growth for bread and fresh bakery products was very low (2.0%), while the same can be said of hot beverages (3.3%).
Organic or not – most Germans answer this question with at least an occasional “yes”. Only 6% of the households included in the GfK panel to report on their shopping habits claim to buy absolutely no organic produce. A further 25% are in the coincidental organic shopper group (purchase organic produce between one and five times per year) – presumably by mistake or in the absence of any available conventional alternatives. Accordingly, they make up only a dwindling 3% of sales. In all the remaining households, organic foods and beverages are a deliberate choice to a greater or lesser extent. At 42% of all households, the “occasional organic shopper” group, accounting for a total of 20% of organic product sales, is the largest. In 2017, these households bought organic produce between 6 and 25 times. Taken together, the intensive and frequent organic shoppers are represented in just as many households as the coincidental shoppers. While the frequent shoppers buy organics between 26 and 50 times per year and account for a share of 15%, the intensive shoppers, who account for 11% of households, buy organic products even more frequently. Their contribution to organic expenditure is correspondingly high: together, intensive and frequent shoppers account for in excess of three quarters of total organic sales. They evidently buy organics because of a firm belief in the benefits offered by organic food.
These two groups are consequently of particular importance for organic product suppliers – irrespective of the product concerned. Intensive and frequent shoppers opt for the organic choice nearly twice as frequently in almost every one of the selected product groups as the average German household. To take organic eggs as an example: around one in every five eggs bought is organic in origin across all households, whereas in the intensive/frequent organic shopper groups, the equivalent figure is 40.9%. Beyond this, they also ensure that five more of the selected product groups record double digit organic shares: the fruit, vegetables and potatoes, dairy products, dietary fats and cooking oils, hot beverages and dairy products which intensive/frequent organic shoppers buy are far more frequently organic products than the average. Just below the 10% mark are canned products (8.9%) and confectionary (8.7%), with organic non-alcoholic beverages still accounting for a share of 7.4% among intensive/frequent organic shoppers. Organic sausage and meat products can boast a share of 6.3% for this consumer group. Just as is the case with the average across all households, alcoholic beverages bring up the rear in terms of the rankings (2.8%).
How to convince new customer groups and in particular, the younger generations – Y and Z being the key terms here – of the advantages of organic foods and produce was one of the themes of the “Next Generation” organics conference. Among the invited delegates was youth researcher, speaker and trainer, Simon Schnetzer, who has closely scrutinized the eating habits of this generation, examining also why goods and products with the green organic seal are found in their refrigerators relatively rarely. Some of his findings conclude that there is a lack of knowledge on the specific benefits of these products, a lack of trust in the seals and an absence of appropriate influencers. For generations Y and Z, these might be, for example, YouTubers, Instagram stars and other social media influencers, in addition to their parents and friends. So how would it be if, in future, organic farmers and suppliers were to use their own blogs, YouTube channels and other social media platforms to highlight the benefits of organic produce? Perhaps they could provide insights into their production via Smartphone and photos and, in this way, create transparency? New generations are also growing up on the supplier side and with them, new opportunities are emerging to make organic produce more prevalent.
Source: GfK Organic Study 2017; Database: GfK Household Panel, Germany
If you have any queries concerning this article please contact Helmut Hübsch, GfK SE, or Claudia Gaspar, GfK Verein.