Poland delighted with continuing growth

Precise data on the size of the organic market in Poland do not exist, but the wholesaler Bio Planet near Warsaw estimates that it is worth around 50 million euros a year. For several years, the number of wholefood shops has hovered around 300, with new openings balancing closures. From a low base, the market is continuing to grow by about 1-2 % annually. The biggest company in the retail sector is Organic Farma Zdrowia, that has 16 shops in the large towns across the country.
(Picture: Friendly service at Organic Farma in Warsaw)
“We’ve not experienced a crisis,” explains the wholefood wholesaler Sylvester Struzyna, and the situation in Poland does indeed seem to be very stable, and both retailers and wholesalers have no complaints. However, this should not obscure the fact that the proportion of imported organic products could be about 70 %, which is an extremely high figure. In particular, packaged goods from abroad cost the consumer about 50 % more than in Germany. For example, a bottle of Now by Lammsbräu costs the equivalent of 1.5 euros and a Vivani chocolate bar a whopping 3 euros. It’s obvious that only an upper class and not the average earner in Poland can afford prices like these. (Picture on left: Organic Farma’s own brand)

The chain Organic Farma Zdrowia has developed very well over the last few years. It was founded by Przemyslaw Tomaszewski in 2003. In the meantime, this organic retail company has acquired 16 stores and has recently set up an online shop. Seven of its stores are in Warsaw and the others in big towns like Lodz, Krakow, Gdansk, Poznan and Katowice. They recently closed one unprofitable store in Wroclaw. The latest new opening was at the beginning of 2009 in the heart of Warsaw (Chmielna Street) near the well known Palace of Culture. Whereas a few years ago most products came from conventional agriculture, a good 70 % of the range is now organic. Five to seven percent of the range consists of mainly conventional dietary products. In some categories, they are still experiencing supply problems – chicken is an example. In the case of other products like eggs, however, the situation has got much better in recent years, according to the sales manager Tomasz Malinowski (picture on right: expert advice is important at Organic Farma)

In 2006, the company was converted into a joint stock company, and in 2008 it was listed on the on the stock market. However, the two main shareholders are still Przemyslaw Tomaszewski and Slawomir Chlon. “The market is developing rapidly, and we’re expecting growth of 20 % this year in the organic market in general and also in our company,” says a happy Malinowski.

14 of the 16 stores are located in shopping centres, although the last one to open is in a quiet side street near the middle of Warsaw (pictures on left and above). “Our stores are in the country’s best shopping centres,” says Malinowski with great pride, although in the future some shops will be in different types of location, depending what premises are available. The product range in the stores comprises 2,000 articles, of which 150 are own brand that cover the usual basic items at lower prices. Malinowski estimates that 40 % of goods are sourced in Poland, which means that most are from abroad, in particular Germany. The product range of a store is selected from a total range of 3,800 articles. The retail space of the modern and attractively fitted out Organic Farma specialist stores is between 45 and 120 m², which compares favourably with shops in countries in Western Europe. As a result of acquiring a 30 % share in the wholesaler Bio Planet, Organic Farma closed its own warehouse and keeps one of its supply lorries at Bio Planet. Organic Farma also holds a 30 % stake in the vegetarian bistro chain Green Way that runs bistros countrywide. Green Way now has about 40 of these restaurants.

Free Delikatesy is the name of a shop launched by Marianna Skibinska (29) and Daniel Skibinski (31) in a shopping centre Europlex in October 2009. These young entrepreneurs became preoccupied with the issue of organics when their first child was born a couple of years ago. The 90 m² specialist shop employs four people and offers its customers a selection of 2,500 products. Fruit and vegetables, that are sourced from Biosfera and delivered twice a week, are kept fresh on chilled shelves. By accessing www.freedelikatesy.pl customers can place orders and have them delivered to their doorstep. The next phase is expansion of the shop, with the 40 m² space that is currently being used as a store and office being included in the retail area. Toys, sweets, gluten-free foods, fish and alcoholic drinks are to be included in the product range or will supplement existing ranges. Marianna is sorry to report that they often experience supply bottlenecks and, therefore, there are gaps in their fresh food range. (Picture on left: Marianna Skibinska in centre with two employees)

Bio Planet (picture) is a wholefood wholesale company that was founded three years ago. Its headquarters are 30 km to the west of Warsaw. Despite its proximity to the capital, travelling there by car can take an hour or more. Sylwester Struzyna (in the white shirt in the picture) and his 35 employees supply around 200 wholefood shops with a full product range. Among the bigger customers are the prestige shops Smak Natury, the small franchise group Zolty Cesarz (see our earlier report) and, as explained above, Organic Farma. Because Organic Farma’s main shareholder Tomaszewski holds shares in Bio Planet, the companies enjoy a strategic partnership. In addition to the specialist trade, Bio Planet also supplies the conventional retail trade – for example, E. Leclerc and Marcpol where, as Struzyna is pleased to point out, you find up to 200 organic items on eco- islands. Gastronomy too is increasingly showing an interest in organics, and 40 to 50 establishments are now being supplied. Green Way, the vegetarian restaurant chain that you see in many towns in Poland and that adopted an eco tinge of green despite using mainly conventional food, is now buying in some organic products.

Bio Planet is trying to familiarise the end-customers with its name by means of an own brand. Struzyna concedes that it is difficult having a presence with the same brand name in both the conventional and specialist trade. The company would like to find a solution by offering the conventional trade a new brand. Bio Planet is anticipating turnover of 3.2 million euros in 2010, the wholefood specialist trade accounting for 60 %, the conventional retail trade for 25 % and gastronomy for 10 %. 5 % of turnover is attributable to supplying other wholesalers and processors. The company issues a newsletter to keep retailers up-to-date. The warehouse capacity of Bio Planet comes to 1,000 m², where they package some products themselves – individually and weighed by hand, which is not exactly the way to keep costs down. The goods they package themselves account for nearly half of turnover (45 %). Struzyna estimates that about 70 % of goods are imported. (Picture: Tasting dried fruits during a tour following the conference Organic Marketing Forum)

The conventional food chain Spolem, run by a consumer cooperative, doubled its turnover of organic products between 2005 and 2009 to reach 0.52 % of total turnover of food (547,403 zloty resp. 133.000 Euro in 2009). 60 outlets, ranging in size from little corner shops to department stores, now stock an organic range. This year, they are planning to equip two more shops with shelves specifically for organics. Business is briskest in the Sezam department store (see our earlier report), where 1,4 % of turnover is achieved with organics – 53 % of the total organic turnover of the Spolem Group. Sezam has 8 metres of shelving for organic products where you find 580 mainly packaged articles. Spolem sources its total range of 1,014 articles from 61 suppliers. (Picture on right: Boguslaw Edmund Pienkowski, Jolanta Jedrzejewska in front of the organic shelves)

“We are anticipating 5 % growth in turnover of organics in all Spolem shops in 2010, including the Sezam department store,” says Jolanta Jedrzejewska who is responsible for product range development. They are planning to expand the category detergents and cleaning materials. Also, they recently introduced a facility for returning batteries and they have engaged in practical cooperation with an environmental group (EFTE). They both distribute cloth shopping bags to consumers free of charge. “At the moment, we’re asking ourselves whether pure organic shops would be a sensible investment for us,” adds Sezam manager Boguslaw Edmund Pienowski. They have already had a Fair Trade line, now consisting of 20 articles, for the last three years.