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Boost in demand: pandemic cannot break organic boom

Organic products have been a growth driver in the food trade for years. The pandemic has even fueled the desire for healthy food – and given the unusual visits to restaurants and vacation trips, more money is being spent on high-quality food.

Organic is booming – especially in the corona pandemic. According to figures from the Gesellschaft für Konsumforschung (GfK), the demand for organic food in the first three months of the Corona crisis increased significantly more than sales in the food trade as a whole. “The Corona crisis did not appear to have stopped the trend towards more conscious consumption. On the contrary, it seems to have intensified it,” said GfK trade expert Robert Kecskes.

He is not alone in this assessment. The organic farming information portal reports record sales in organic food trade and a boom in organic subscription boxes. The State Association for Organic Agriculture (LVÖ) in Bavaria also observed: “More and more people are choosing organic products when shopping.” Regional offers are particularly in demand.

In a recent survey by the market research institute AMM, 30 percent of consumers stated that they had expanded their organic purchases in the pandemic. “The share of organic products in grocery shopping has been given a further boost by the pandemic”, is the leading study leader, trade expert Joachim Riedl from Hof ​​University, convinced.

Supermarkets are chasing market share

According to the survey, organic products have not only benefited from their reputation of being high quality, environmentally friendly and healthy in recent months. Consumers also chose organic products because they wanted to support regional suppliers and farmers in times of global pandemics. In addition, in view of the unusual restaurant visits and canceled holiday trips, there was often more money available for high-quality food.

For comparison: Not even four percent of consumers said in the survey that they had restricted their organic purchases. And where it happened, it often happened involuntarily. The reasons given were often that the crisis meant that the number of shops that people wanted to go to was reduced or that there was less money available due to Corona. So far, the pandemic has not been able to break the organic boom. Organic products have been one of the biggest growth drivers in the food trade for several years. According to the Federal Office for Organic Food (BÖLW), Edeka, Rewe, Aldi, Lidl and Co.’s sales of organic food and beverages rose by 11.4 percent last year alone to more than seven billion euros.

Supermarkets and discounters are in the process of taking market share from the organic specialty stores. The large retail chains are increasingly being perceived by consumers as competent suppliers of organic food, says Riedl. They are increasingly succeeding in addressing intensive organic buyers. Conversely, however, organic specialty stores have so far hardly been able to lure organic casual buyers into their shops. This could become a problem for the specialist markets in the future. The consumer is currently benefiting from the growing competition on the organic market. Because organic is cheaper.

Intense competition among major retailers

“The price wars for VAT reductions have an impact on the organic business,” observed the industry journal “Lebensmittel Zeitung” recently, citing Aldi organic minced meat in a 400-gram pack at a bargain price of 2.70 Euros and the organic pizza dough from Lidl for 1.27 euros.

And the price war in the organic sector could even worsen if Corona should further increase unemployment and customers have to pay more attention to every cent – but do not want to do without organic. In any case, retail expert Riedl still sees scope for red pencil campaigns.

He is convinced: “The intense competition among the large retailers will also reduce the trading margins for organic food. There is plenty of scope for this because the price premium for organic food is largely taken up by retailers today.”

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