Denmark: Organic sales still on the rise

Organic Denmark has published its Organic Memo 2012. It reveals that organic food sales from Danish discount stores, supermarkets and department stores totalled DKK 5.5bn (about €738m) in 2011, an increase of over 7 % on 2010. In addition to retail sales, 2011 also saw organic sales via wholesalers/catering to public kitchens, school meal schemes, private canteens and restaurants of approximately DKK 0.8bn. Sales of organics through alternative channels amounted to DKK 0.7bn and sales through other channels were worth DKK 0.5bn. From 2010 to 2011, organic sales increased in several product groups: the category milk, cheese and eggs saw the largest increase of DKK 172m, followed by rice, bread, pasta, flour and cake, with sales of DKK 57m. (

In 2005, Netto and other retail chains sharpened their organic profile through increased marketing efforts and by widening their selection of organic products. These activities helped renew the focus on organics in the other retail chains, in the media and among consumers in Denmark. Over recent years, all retail chains in Denmark have expanded their selection of organic products, leading to the share of the organic market rising from 3.9 % in 2005 to 7.6 % in 2011. (Graph: Development in the market share of organic products 1992 - 2011. (Source: GfK Consumer Pannel, Statistics Denmark))

Combined with the increased interest of consumers in quality food products, the extended range of organics is believed to be contributing to the renewed growth in the sale of organics in the country. Organic Denmark expects annual growth rates to continue - between 5 % and 10 % over the next three years, measured in value. 







 

The majority of organic food products are sold to Danish consumers via discount stores like Netto, Fakta, Kiwi, Rema 1000, Aldi, Lidl, and Alta. Supermarkets like Irma, SuperBrugsen, SuperBest and Lovbjerg, as well as department stores like Kvickly and Fotex, have also played an important role. In 2011, only 10 % of organic sales took place through alternative sales channels that include farm shops, box schemes, farmers’ markets and health food shops. Organics were also sold by convenience stores like Dagli’Brugsen, Edeka, discount department stores such as Bilka and A-Z and through other channels - webshops, specialist shops like butchers, bakers, cheese shops and similar outlets.

(Table: Organic sales by sales channel, Source: GfK Consumer Scan)


 

Netto, according to GfK, is the retail chain that enjoyed the largest share of organic sales in 2011, accounting for 16 % of total organic sales and followed by the COOP chains SuperBrugsen and Fakta. When looking at how large the share of organics is in their total food sales, the picture is somewhat different: Irma, with organic sales accounting for 23.5 % of the retail chain’s food sales within product groups offering organic varieties, was the chain enjoying the largest organic share by far in 2011. It is followed by SuperBrugsen, Fakta and Netto, each with organic shares of about 10 %. The difference may be explained by large variations from chain to chain in terms of number of stores, store size and location. In addition, the number of organic items offered also varies from chain to chain. With its selection of approximately 1,100 organic items, Irma tops the list. Netto’s permanent organic product range consists of around 120 items. (Graph: Chains' organic share of total sales within product groups that offer organic varieties (2011). Source: GfK ConsumerScan))

The share of organic sales in Denmark differs from product group to product group. Basic products enjoyed high market shares (oats: 40.5 %, milk: 29 %, eggs: 22.5 %) in 2011, while others like pork and cold cuts had market shares of less than 2 % (Source: GfK ConsumerScan). The variation in market shares may be explained by differences in price premiums for the products, the perceived added value, quality and supply in its broadest sense.

Table: Organic market share of 23 product groups in 2011 (Source: GfK Consumer Scan)

There is a clear trend of households in Copenhagen buying relatively more organic products. The organic share of total household grocery purchases in the capital area thus amounted to 12.5 % in 2011. The largest growth was seen in western Jutland where the organic share of the total grocery spend saw an increase of 4.7 % in 2011 compared with 4.1 % in 2010. Consumers in Zealand were placed second in terms of the organic share of total grocery purchases in Denmark. Regarding family status, the highest organic share of total grocery purchases was seen among families with one child - 11 % in 2011. As regards age groups, people aged 40 – 49 had the highest organic share of total grocery purchases with 9.5 %. Regarding education, consumers with higher education had the biggest organic share of total grocery purchases, with 21 % in 2011.