Extended Networking Meeting Podgorica, 7 June 2011

Organic Markets: What‘s going on?

Burkhard Schaer (ECOZEPT)

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Objectives

 Understand volumes and importance of organic markers  Understand dynamics and driving factors  Enrich reflection on further development of organic markets in WBC

2

Agenda

 Organic markets: general data  Trends on agriculture level  Trends on processing level  Trends on retail level  Trends on consumer level  Perspectives and recommendations

3

Agenda

 Organic markets: general data  Trends on agriculture level  Trends on processing level  Trends on retail level  Trends on consumer level  Perspectives and recommendations

4

L’agriculture bio dans le monde (2008) Inclut les surfaces en conversion

35 mio ha + 10 % p. a.

Development of the organic world market (billion USD)

70 60 50 40 30 20 10

15,2

20,9

25,5

1999

2001

2003

46,1

51

54,9

2007

2008

2009

60

2010

33,2

0 2005

Sources: Agence Bio, Ökonews, Organic Monitor

The most important organic markets (million €) 17.835

USA

20.061 5.800 5900

Germany France United Kingdom Italy

3.041 3.300 2.065 1.954 1.500

Canada (2008)

1.284

Switzerland Japan

1.023 1.268 1.000

Spain

905

Austria

868

Source: IFOAM, 2011, OTA, Agence Bio, ZDF

2009 2010

Organic market development in 2009 / 2010 10%

France

19%

11%

Sweden Norway

16%

10%

Italy

8%

Denmark

2010 2009

6%

USA

5%

8%

Germany 0% 2% -13,00% -15%

-5,90% United Kingdom -10%

-5%

0%

5%

Sources: IFOAM, 2011, Soil Association, OTA

10%

15%

20%

25%

Per capita expenditures for organic food (2009) € / per capita

Source: IFOAM, 2011

Market share for organic products

Organic market share In Denmark : 6,7 %

Market share for organic Bananas in Germany : 13 %

Agenda

 Organic markets: general data  Trends on agriculture level  Trends on processing level  Trends on retail level  Trends on consumer level  Perspectives and recommendations

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Organic production and consumption in France 3,5 3 2,5 2 1,5 1 0,5 0 2001

2002

2003

2004

2005

2006

2007

2008

2009

French organic agriculture surfaces (2009: 677 513 ha) French Organic Market turnover (2009: 3 billion Euro)

Agenda

 Organic markets: general data  Trends on agriculture level  Trends on processing level  Trends on retail level  Trends on consumer level  Perspectives and recommendations

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Trends in organic processing  Traceability and “corporate social responsibility”  In organic/natural non-food first  Vertical integration: information flow  “organic plus”.  Concentration and internationalisation  Acceleration of restructurings  Wessanen Group – Lea Nature&Ekibio group  Market channel – value dilemma  Limits of growth  Necessity of scale effects  Commitment towards pioneer retailers

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Agenda

 Organic markets: general data  Trends on agriculture level  Trends on processing level  Trends on retail level  Trends on consumer level  Perspectives and recommendations

15

Weight of distribution channels (2008) Market share

within the organic market (%)

Spain Italy Greece France The Netherlands Portugal Germ any Belgium Czech Republic Aus tria Great Britain Switzerland Slovenia Bulgaria Denm ark Sweden 0%

20%

40%

market share of conventional retailers (%) other sales channels (%)

60%

80%

100%

Specialised organic shops (%)

Organic market development, pushed forward by … organic retailers conventional retailers

Norway Germany

France

Belgium

Denmark

Great Britain

Croatia

Bulgaria

Finland Spain

Malta

Portugal Italy Sweden

Slovakian Rep. Hungar y

Austria Poland

Netherlands Czech Rep.

Greece

Turkey

Luxemburg Switzer‐ land

Slovenia Romania

Cyprus

Agenda

 Organic markets: general data  Trends on agriculture level  Trends on processing level  Trends on retail level  Trends on consumer level  Perspectives and recommendations

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Les consommateurs bio en Europe Royaume Uni 2009 120%

100%

80%

27+ purchases; 9% 13-26 purchases; 14% 7-12 purchases; 20%

56%

60%

40%

43%

20%

21% 12%

1 purchase; 14%

10% 1%

in % of all households

% of all expenditures

0%

Source: Soil Association, 2010

Organic Consumers in Germany, 2009 100% 90%

6% 9%

Intermediate buyers

80% 70%

Intensive buyers

30%

Occasional buyers

49%

60%

15% => 68 %

50%

19%

40% 30%

49%

Buyers "by chance" 23%

20% 10% 0%

6% in % of all households

Source: GFK Haushaltspanel 2009

non-buyers

9% % of all expenditures

Tendencies in consumption



Polarisation



Multi-Optional Consumer



Les LOHAS  Lifestyle

of Health and Sustainability

Towards two paradigmes in consumption?

Committed consumption

“Bliss Ignorance” consumption

Regional or organic? organic from afar or conventional from my region – the choice I would make (organic buyers, N = 900): 51 50

40

37

30

20 13 10

0 organic product

conventional product

I don't know

Source: Ecozept, 2010: French Consumers and Organic Consumption. Own research

Agenda

 Organic markets: general data  Trends on agriculture level  Trends on processing level  Trends on retail level  Trends on consumer level  Perspectives and recommendations

24

Perspectives  “Organic goes mainstream” - “Mainstream goes organic”  Products, Communication, Distribution  Structures  Ideas – Ideals?  The financial crisis is over (for organic)  But growth slowed down  Structural effects persist  Organise transparency  Consumers’ expectation develop  Organic is broadly accepted  Organic “plus” - “authentic organic” is asked for

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Recommendations  Develop your difference  Be irreplaceable: distinguish products & services  Adopt clear positions towards trends and competitors  Be “professionally organic”  Integrate your supply chain  Proactive and strategic choices of partners and market channels  Reciprocal contracts and personnel relationships  Organise transparency  Talk & Listen  Inform easily and rapidly  Let people talk  Learn from the benchmarks 26

Thank you!!!!

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