Third IFOAM symposium before BioFach

About 60 IFOAM members travelled from all over the world to attend the symposium that was held on the afternoon preceding the opening of BioFach (16.02.2010). They gathered there to get the latest information from reports on the organic market and trends in the different continents. Contributions by speakers from the USA, England, Sweden and Malaysia drew attention to both the difficulties and the opportunities in the development of organics worldwide. To get the event underway, Katherine DiMatteo, the President of IFOAM, addressed the guests with words of welcome. (Picture: Katherine DiMatteo speaking at the opening of the symposium)
In his interesting lecture “Consumer Behavior in Tough Economic Times”, Jonathan Banks (picture on left) from Nielsen in Great Britain focused on the diverse development of the organic market across Europe, the various trends that have emerged and consumer attitudes. Whereas in 2007 in Great Britain organic turnover rose by 4 %, last year it fell by 14 %. The reasons are the unstable economic situation in the UK and people worrying about their jobs, the economy in general and the rising cost of living. Coming tenth, the issue of climate change is not exactly high on their list of worries. As ways of tightening their belts, consumers say they are spending less on clothes, going out less frequently and changing to cheaper brands when they shop for food. We should also not underestimate the part played by media campaigns in the downturn in the organic market in the UK – a number of reports have cast doubt on the value of organic food and have undermined consumer trust in eco-products.

“Consumer Culture and Tomorrow’s Marketplace” was Tamara Barnett’s topic (Picture on right). She is an analyst at the management consultant Hartmann in Washington in the USA and has concentrated on consumer research since 1989. In her extremely lively and well presented contribution, she examined changing consumer habits and new attitudes. On the basis of her company’s surveys, she confirmed that consumers are certainly prepared to pay higher prices if they think it is justified by added product value.

Three-quarters of US citizens buy organic products either regularly or occasionally (see graphic on left). She said we should remember that consumers are increasingly interested in sustainable products that demonstrate their sense of responsibility. This is why one of the first things they register is the packaging of a product. As she pointed out, this raises the issue of, for example, whether the packaging is degradable or can be recycled. The vast majority of customers are critical of plastic packaging, plastic bags or polystyrene trays.

How the conventional retail food trade can become an organic pioneer was demonstrated by Mikael Robertsson, who is responsible for environmental issues at Coop Sweden. Coop is a company owned by consumers, and its share in Sweden’s food market is 20 % but 44 % in the organic sector. With 77 supermarkets and 61 department stores, the company achieves a turnover of 3 billion euros. 6.5 % of Coop Sweden’s turnover is generated with organics, which is double the market share of organics in Sweden as a whole (3 %). It is no surprise that the best known organic brand in Sweden is Coop’s Änglamark (picture). In 2009, Coop’s growth in organics was 8 % and the equivalent figure for the whole country was 18 %. Robertsson’s target is not to achieve 100 % organic – for him, 51 % is sufficient to reach the tipping point for society in Sweden to convert. The aim is to make companies take responsibility for the damage they cause. Instead of organic products being controlled more and more and having to bear increasing costs, stricter controls ought be imposed on conventional agriculture, and it should be responsible for the cost of damage to soil, groundwater and nature. The title of his talk was “Conventional Business Spearheads the Organic Development”.

With graphic examples, Selina Gan (pictures on left and below) reported on the challenges you face in the Malaysian market. This charismatic founder and managing director of Country Farm Organics already has plenty of experience of organic marketing in Malaysia with two organic supermarkets and an organic restaurant, and supplying organic departments (50 m² - 800 m²) in conventional supermarkets. Because too few products were available on the domestic market, she has developed her company increasingly in the direction of importing and exporting. She was enthusiastic about a new marketing system that approaches customers direct and supplies what they order. Without previous knowledge of commerce, she set up her business in 1998 in a country where the concept of organic was hardly known at all. Since 2003, when the first wholefood stores were created, there has been considerable development. There are now 100 of these stores with a retail area of 50 m² - 120 m².

In these health food stores about 40 % of the stock range is organic, with the rest being natural goods from Taiwan. In 2005, the conventional retail food trade entered the market with, for example, Jusco, Carrefour, Tesco and Cold Storage that are supplied by Country Farm Organics. Selina Gan stated with pride that eight out of ten people in Malaysia now know what organic means, and as many as half of them have tried out organic products for themselves. This enterprising organic marketer sees problems in fresh vegetables not being available, prices being too high and dependence on imports, since there are still too few organic farmers and processors in the country. 85 % of all organic goods sold in Malaysia are imported. The title of her contribution was “How the Malaysian Organic Market Evolved in one Decade".

Tip:

Third IFOAM Trade Symposium: “Finding the Competitive Advantage, a Challenge in these Uncertain Times”. All contributions can be accessed on the Internet  as Powerpoint presentations.