Czech Organic Market will quadruple by 2011

The turnover of organic food in the Czech Republic grew by 250 million CZK and reached 760 million CZK (€ 27 million) in 2006, growing by impressive 49 %. The Czech organic food market was thus probably the fastest growing market in Europe last year. Figures come from the report “Czech Organic Food Market 2007”, which was published by Green marketing this month.

Picture: Czech organic store in Prague

Imported organic food had a share of 65 % of the growth and 56 % of the total turnover last year. Organic food thus made 0.35 % of the total food consumption. The average Czech purchased organic food worth € 2.65.

“This is by far the greatest sum spent on organic food in Central and Eastern Europe, but still far behind neighbouring Austria with an average consumption of € 73 last year”, says Tom Vaclavik, author of the report. Hypermarkets, supermarkets and pharmacies had the highest share of the market with 67 %, health and organic food shops had a share of 28 %. About 3 % of organic food was purchased in independent general food shops and about 2 % was sold directly on farms and farmers markets last year.

The main reason for the phenomenal growth of the market was the largely increased organic food offer in the multiple retailers. Particularly supermarkets Billa (Rewe Group) and Delvita (Delhaize Group, meanwhile sold to Rewe) and hypermarkets Interspar expanded their private label organic food assortment with fresh produce, milk and bakery products. The drugstore chain dm-drogeriemarkt also significantly grew its organic sales last year with the German Alnatura brand. „The specialist sector has also played a significant role in the market growth: organic and health food shops can hardly keep up with the continuously expanding organic ranges in offer, mainly from importers”, adds Tom Vaclavik. Green marketing expects the Czech organic food market to keep growing very fast in the next five years, in average by 35 % annually till 2011, when it should reach over € 115 million. The report “Czech Organic Food Market 2007” has also tried to answer the question: Who buys organic food in the Czech Republic? In 2006, only 3 % to 4 % of the population purchased organic food regularly, 25 % knew what organic meant and purchased the products irregularly. The typical consumer was a woman 25 to 44 years old, living in large city with high education and above average income. More than 40 % of Czechs preferred organic food of Czech origin.

After a three year stagnation, the number of organic farms in the Czech Republic grew by 134 (16 %) in 2006 to a total of 963 farms and the organic acreage grew by 26,553 hectares to 281,535 hectares. Organic farming in the Czech Republic now has a share of 6.61 % of the total agricultural area (compared with 5.98 % in 2005). 16 % of the land is in conversion. The average size of an organic farm was 292 hectares in 2006. The main reasons for the growth were increased payments for organic farms in the new Rural Development Program 2007-2013 and the huge demand for organic products both domestically and abroad. Arable land grew  by 2,713 hectares (13 %) last year to reach 23,479 hectares (8.7 % of total organic acreage). Permanent grassland had a share of 82 % (a growth of 22,234 hectares, or 10.5 %). Organic cereal was by far the largest commodity; about 25,000 tonnes were produced in 2006 (spelt, oats, wheat). Organic milk and beef were the largest commodities in the animal production. Last year also saw a rise in the number of organic food manufacturers, their number grew by 27 to a total of 152. Unfortunately, on-farm processing is still miniscule mainly due to very strict hygienic and veterinary standards requiring huge investments.

The authors of the report: Green marketing is a marketing consultancy in the organic food business working for organic farmers, manufacturers, traders and retailers in the Czech Republic and other CEE countries. Green marketing also helps foreign companies wishing to enter the CEE organic and natural products markets. Tom Vaclavik is Green marketing’s Principal and also President of the international Organic Retailers Association, www.o-r-a.org.  Tom is member of the Czech Organic Action Plan Team where he heads the Organic Food Marketing and Processing section. Green marketing, Ph.: +420 541 263 456, E-mail: tom@greenmarketing.cz, www.greenmarketing.cz