Organic shops in the Netherlands and Belgium advancing

Since 2003 the organic specialty shop in the Netherlands and Belgium has gradually gained ground again as regards organic food sales via the supermarket. It appears that 2005 will even be a top year for natural food stores, with an increase from 6 to 10 %. At the same time, the sale of organic products via the Dutch supermarket has dropped for the first time in years. But the Dutch retail market is experiencing great turmoil as well.

Picture: De Natuurwinkel Groenhof Passage in Alkmaar

In 2003 Ahold, market leader with the Albert Heijn (AH) shops (25 to 28 % of the total food sales, approx. Euros 24 billion), ran into big problems due to an accounting scandal. The AH shops were also under fire because they were considered to be too expensive. In the autumn of September, Albert Heijn started a price war that is still raging today. In October this year another 1000 products were permanently lowered in price, which has already happened a number of times. The other supermarkets are following the market leader's every step. The result of this two-year price war is a shrinking market. In the second quarter of 2005, the total expenditures in the Netherlands declined by a good 5 %, from Euros 6.1 to Euros 5.8 billion. Due to the shrinking market, the organic market share rose from 1.8 to 2 %, while sales remained fairly stable with Euros 114 million. With a 2.8 % market share, the fresh food groups are doing much better than the organic dry goods. (Picture: Bio Planet in Belgium)

It is striking to note that the supermarket saw its organic sales drop 6 %, while the specialty shop realised a growth of 6 to 7 %. From this it can be concluded that the demand for organic in the Netherlands is still on the same level, but people are also opting for the organic specialty shop more often. Maarten Rijninks, Director of the Natural Food Shop Organisation (NWO: Natuurvoeding Winkel Organisatie), with which approx. 85 natural food shops are affiliated, including 42 “Natuurwinkel” franchise shops, recently expressed in the newspaper Algemeen Dagblad that he expects that sales in shops (picture: Groenhof Passage) affiliated with the NWO will rise an average of 10 % this year. According to Rijninks, the most important reason for this rise in sales is the modernization and expansion of existing shops. A growing number of shop entrepreneurs dare to take the step towards renovating and expanding the shop, because it brings about good results. The consumer enjoys having a wide range to choose from. The average number of organic products in natural food shops is estimated at 3.500 products, and that number continues to rise, thanks to the increasing number of shop expansions. 

In countless cities, the organic shops are being expanded into full-fledged organic supermarkets measuring 300 to 700 m², and sometimes more. A great many Natural food shops of the franchise formula have been renovated and expanded over the last few years, such as in Hilversum, Arnhem, Nijmegen, Amsterdam, Alkmaar, Amersfoort, Utrecht, Rotterdam and Zoetermeer. Virtually every expansion and modernization leads to an immediate increase in sales from 20 to 50 %, which continue to increase in the years that follow. There have even been reports of a doubled volume of sales within one-half year after moving. The largest and most successful organic supermarket in the Netherlands, Gimsel Groene Passage in Rotterdam, was recently expanded from 600 to 750 m². The total number of natural food shops in the Netherlands is roughly 225. The total turnover in 2004 was Euros 171 million (41 % market share). (Picture: Bio Planet Belgium)

For the summer of 2005, two organic supermarkets were started up in Alkmaar (population approx. 95,000). The first to open was Eko Plaza, a new organic supermarket formula, in which old-timer Jos Kamphuys and Manpro Projectonwikkeling bv are cooperating. Manpro is the owner of the Food Factory, a new supermarket formula with two branches (Alkmaar and Enschede) in shopping centres developed by Manpro. There was extra space in Alkmaar and this is where Eko Plaza has established itself.
The formula without its own brand offers brand articles at relatively low prices; organic products are not in the range. With Eko Plaza, Manpro feels it has found an attractive supplement to the Food Factory formula. The two shops, one next to the other, are accessible from the same parking garage, and shopping carts and a number of general and technical services, such as cooling capacity, are shared. (Picture: Organic Range of Bio Planet Belgium)
Eko Plaza will also start up shops separately from the Food Factory. The initiators have announced recently that 15 Eko Plaza shops will be opened in the years to come. A new Eko Plaza outlet of 1500 m² will be realised at the end of 2006 in the centre of The Hague. Besides Eko Plaza XL stores (1500 m²), the management announced to start also with XS outlets (500 m²), a website store with 600 distribution points and a shop-in-shop concept (20-30 m²).
In terms of sales results, the new Eko Plaza in Alkmaar is nowhere near being one of the top shopping centres in the Netherlands. The shop, which is aiming at customers from the entire region, has not attracted enough customers yet. But an average ring-up of 25 euros per customer is on a high level.

Two weeks after the opening of the Eko Plaza, De Natuurwinkel Groenhof Passage (picture) opened its doors with a Natural Food Shop measuring 750 m², a health shop and an organic butcher’s shop. Entrepreneur Arjen Nijdam (Natuurwinkel Schoorl, partner in Natuurwinkel Alkmaar) has been playing around for a few years with a plan for an Alkmaar variation of the Groene Passage in Rotterdam. A number of shops grouped around the theme ‘natural’, with a large natural food shop as a crowd puller. It wasn’t until it was known that Eko Plaza was going to establish itself in Alkmaar that the cooperation between the various entrepreneurs was soon settled. Together they bought a new building in the heart of the city. The Groenhof Passage now already attracts 3,000 customers per week and is operating very well.

It is interesting to note that with the start of the Groenhof Passage, the wholesalers Natudis (a part of Wessanen) and Udea (via Organic Retail Partners) participated in the project. For some time now, both organizations have been partners in the NWO, which is accommodated in the Natudis building. The Natural Food Shop formula was set up in the nineties by Erik Does, the current General Director of Udea. Udea has ten of its own shops in and around Amsterdam, some of which are Natuurwinkel (with floor space starting at 150 m²) and some are BioOase (smaller than 150 m²) on the market. Over the last few years these shops have almost all been renovated and expanded under the auspices of Does Winkelexploitatie. Gerard Does, founder of the Does shops and father of Erik Does, states that they had already gained a great deal of knowledge and experience in the retail trade. ‘We want to make this knowledge and experience available to shop entrepreneurs who want to make a step toward expansion into a renovated shop. Knowledge is also finding good locations and ensuring that you can get that location. This was also the reason why we started Organic Retail Partners. In that capacity, we support shopkeepers who want to steer their own course.’ (Picture: Erik Does and Erik-Jan van de Brink)

A form of far-reaching integration between wholesalers and shops is the goal of fresh food wholesaler Odin, known from its cooperation with Salamita and as the creator of the successful vegetable subscription (picture) , which over 20,000 households use once per week. In the beginning of 2004 Odin started a shop formula – Estafette – the organic eating shop. The formula places great emphasis on organic and biodynamic fresh products. There are currently 6 Estafette shops in the Netherlands.

Market leader among the Dutch wholesalers is Natudis, specialised in dry groceries with many of its own brands, including De Rit and MolenAartje. Natudis has a turnover of roughly 70 million euros. Udea, number two with an estimated wholesale turnover exceeding 30 million euros, recently moved to a very modern new building (picture) measuring over 8,000 m². Besides number three Odin, there are other active wholesalers with more of a regional function: Kroon (fresh) in Nieuwegein, De Zaai-Ster (fresh) in Leek and the Nieuwe Band (dry goods) in Marum. Two nationally distributing bakeries are also active: Bakkerij Verbeek and Bakkerij V.d. Westen. Virtually all companies mentioned are also active in Belgium to a higher or lower degree. An important recent development is the announcement at the end of November by four wholesalers to start close cooperation in the field of assortment and promotion. Natudis, Udea, De Zaai-Ster and Bakkerij Verbeek join their forces to give more professional support to the organic shops in the Netherlands. The cooperation starts at the beginning of 2006.

Under the name Stichting BioMerk nine respected brand-manufacturers started in spring 2006 cooperation in the field of promotion for organic shops in the Netherlands and Belgium. The nine companies, Horizon, De Traay, Corn Candies, Yarrah, Bonvita, Simon Lévelt, Joannusmolen, De Halm and OFC Piramide, aim to support the organic shops in the sales of their brands. Another aim of the nine companies is to cooperate in export.  

The most important development in the Belgian market over the last few years is the start of the Bio Planet supermarkets by Colruyt. In the meantime, there are now three branches that vary from 600 to 1100 m². They are supplied from their own distribution centre. The organic products are also offered via the website and can be ordered by regular Colruyt customers via the Internet and picked up at the 157 Colruyt supermarkets. Before the summer, Danny Debock (picture) reported that the distribution centre is now operating on a break-even level and can become profitable by opening more branches. In addition, they are looking for suitable locations in the southern Netherlands.  The shop structure in Belgium is different than in the Netherlands. There are many more shops, roughly 900, but the scale size is very limited and the total sales do not amount to half that of the Netherlands. A great many wholesalers and local and regional distributors operate there as well. The two major national wholesalers are Biofresh and Hagor-Bioservice. Hagor-Bioservice is a part of the Wessanen group and works closely together with Natudis in the Netherlands. The sales of organic fresh food are clearly on the way up this year. Bioforum reports a 5 % growth in sales over the first half year. The market share of organic fresh food has risen to 1.6 %.
 
More information:

www.natudis.nl
www.wessanen.com
www.udea.nl
www.odin.nl
www.zaai-ster.nl

www.denatuurwinkel.nl
www.degroenepassage.nl
www.ekoplaza.nl
www.bioplanet.be