Sweden: New sales record for the organic market

Picture: Eko Gala event. Photo © Ecoweb

Cecilia Ryegård, chief analyst, Ekoweb presented the ninth Ekoweb report during the yearly event Eko Gala, end of January. Organic food sales in Sweden show another new sales record of certified products and increased by 18 percent on a high level (+38%, 2015), whilst total food sales in Sweden increased by just 1.6%. In numbers that is 3.9 billion SEK (€390m). The organic sales grow took place across alls retail channels, in  Systembolaget (sales of alcohol) and also foodservice channels, EU organic grow as well as KRAV-labelled (Swedish certifying company).

8.7 percent market share

This means that organic food sales are now up to a total value of 25.4 billion SEK (€2.54 billion). The total value of the Swedish food sales was 291 billion SEK (€29.1 billion) in 2016 and so the organic share of total food sales in Sweden now stands at 8.7 percent (7.7 percent, 2015). The business which saw highest organic sales value during the year were Systembolaget (+ 33%). The retailer with the highest organic market share is Coop (10%). In the public sector, 32 percent (provisional figures) of public food procurement is organic. Sales of organic food online has increased significantly. „Online sales show extremely high organic sales amongst all online retailers who report their organic sales at between 15 - 25 percent. This is exciting because it shows the potential there is for physical retailers“, says Cecilia Ryegård.

Picture: Coop is the retailer with the highest organic market share in Sweden. Photo © Ecoweb

„Swedish consumers continued to show great interest in organic foods. Many retailers report that they are seeing the changes in consumption pattern, those that previously might just bought milk, eggs, oatmeal and bananas regularly have begun to buy, new organic products for example, meat, muesli or oranges. At the same time we are seeing completely new organic consumers, often with a focus on their own or their family’s health“, says Ryegård.

Prices remained stable

Price levels have largely been flat over the year, except for beef, fell meaning it sold in larger volumes during 2016. One reason prices remained unchanged despite raw material shortages and increased demand is that retailers increased their range of own-brand organic products which generally speaking, are about 10 percent cheaper than the equivalent private label product. „The increased share of private label products and lower commodity prices on organic- milk where both requirements extension lowered and the price followed by the conventional downturn are also factors that influenced inhibiting the increase in value of trade in 2016“, says Ryegård.

Ekowebs forecast for the year, which was made in January 2016 was an increase of 20 percent. The year started strongly and when the interim report was presented, the increase was 23 percent. Sales growth slowed in the autumn which slowed momentum towards the end of the year. Many retaillers witnessed this sales pattern. „Our forecast was for a slightly higher increase than the market ultimately achieved. Despite not quite matching our forecast the Swedish organic food market saw the third largest value increase ever and never before has as much organic food been sold in Sweden as in 2016“, Ryegård explains.

Picture: Cecilie Ryegård during the Eco Gala event. Photo © Ecoweb

Sweden´s organic produce was sold out

„The market has grown as much as it can with the produce available with everything Sweden produced being sold. Generally speaking, there are no more products to sell! There has been a shortage of Swedish raw material at times for milk, cereals, eggs and meat. Indeed the grain market will need to import at least 60 000 tonnes of organic grain to meet the needs of the Swedish market“, she says. Organic dairy products largely drive the organic food market. As organic milk production at Arla has only increased by one percent during the year, although this has limited the opportunities for the organic food market to grow.

Picture: discussion how to increase organic farm land and convince young people to become organic farmers. Photo © Ecoweb