The Coop is the Market Leader in Sweden, too

Where the most organic products are sold in the conventional food trade, it is often the cooperative organisations that are most involved in  considerations of ecology. This fact also applies to Sweden: 40 % of all food sold in the country that has the organic stamp ‘Krav’, 50 % of organic vegetables and 60 % of organic eggs are sold by  Coop Sweden. This second largest Swedish retail chain (turnover in 2004 approx. 2.8 thousand million Euros) is a subsidiary of the Coop enterprises in Denmark and Norway.

Picture: Coop-private brand Änglamark

Coop has 380 branches in Sweden bearing the names Konsum, Forum, Extra and Nara which are located mainly in the central regions of the country. At least 1000 organic products, of which 250 are Coop’s own brand Anglamark,  are sold. Last year  organic food represented 7.5 % of  Coop’s total turnover of food, amounting to approximately 130 million Euros. Two years ago the proportion of organic products sold by Coop was 8.5 % but since then, in the process of restructuring  the whole of Coop North, the number of organic articles has been temporarily reduced. For two years there were no large-scale advertising campaigns for organics. In 2004 a decision was taken in favour of organic products.  Since then almost 50 articles have been made available, including nuts, pulses, dried fruits and certain grain products like couscous, exclusively with the organic stamp. The products, in uniformly styled packaging, are supplied by Salta Kvarn which is a company in Jarna that as well as running a biodynamic bakery has recently begun to operate as a  wholesaler.  By the end of  2005 it aims to have increased its turnover to over six million Euros - twice as much as in 2003. For 2008 the company  already has 10 million as its target.

The conventional food trade accounts for 73 % of organic turnover in Sweden. The biggest retail chain, Ica, was for a long time rather indifferent to ecology but has taken a more active approach in the last few years. In its 1530 branches, Ica sells 440 organic products, of which 90 are its own brand Ica ekologiskt. In 2004 the turnover of organic products rose by 16 %. The proportion of organic products in the turnover of food in Sweden amounts to  a mere 2 % but, since Ica’s turnover is almost four times as great as that of Coop, it may well be the biggest retailer of organics in Sweden in currency terms. Other retail chains have so far not had a proper strategy, and therefore no figures are available on their sale of organic products. However, Mats Jansson, the deputy managing director of Axfood, a company listed on the stock exchange, did announce to the press in the spring of 2005 that  they were thinking about founding the first exclusively organic chain in Sweden. He stated that the new chain could either be independent along the lines of the American enterprise Whole Foods or could be managed as a part of the existing Hemkop chain with its approximately 180 stores.

The development of the Swedish organic market has slowed in this decade compared with the rapid growth in the 1990s. In 2004 the turnover of organic products grew by 6 % to 421 million Euros. Thus, as a proportion of the total food market, this currently represents 2.5 %. "I assume the growth rate will stay the same this year. In the first eight months of 2005 the sale of organics grew by 6-7 %", says Mikael Robertsson, the head of  the environment department at Coop. To make faster progress not only new customers have to be attracted but new interesting products  have to be made available to customers who until now have bought only a few organic products. This is the opinion of Karoline Jerkebring (picture) who follows market developments at the Association of Organic Farmers (Ekologiska Lantbrukarna). As few as 6 % of Swedes are convinced consumers of organic products. 48 % buy organic products occasionally, but almost as many (45 %) show no interest at all. The public sector  is an important source of support for the organic sector. The government has announced that the proportion of organic produce used by catering kitchens in the public sector should rise to 25 % by 2010.The town of Malmo has already achieved 18%, and in Stockholm the organic proportion in school kitchens is supposed to rise from the current 3% to 15 % by 2008.

The proportion of land farmed organically in Sweden is really quite high (8.4 %) but an obstacle is the lack of industries that should process the raw materials. ‘The food industry is not sufficiently prepared to invest in organic lines’ is the complaint of Karolinas Jerkebring.  There is almost a complete lack of even basic products like organic bread. Scarcely a single conventional large-scale bakery has shown any interest in creating its own product line for organic bread, and the local organic bakeries are mostly too small to supply the big supermarket chains in sufficient quantity.  In the past, even Coop was only able to provide organic bread for its customers in the capital. It was just a few weeks ago that  Coop was able to make these products available in every branch thanks to  Salta Kvarn extending its production range. But producers in general are not exactly motivated by the fact that the large retail chains have also been forced to lower their prices since the discounters Lidl and Netto penetrated the market in Sweden about three years ago.

A further factor that is keeping the pace of expansion of the organic sector very slow not only in Sweden but also in Norway and Finland is the almost unshakable faith of the population in the purity and quality of  food produced in their own country. To an extent this belief is certainly justified. The cold winters do limit pests and diseases with the result that agriculture makes less  use of chemicals than in other countries. In any case agriculture is less intensive than in the densely populated countries of central Europe. Compared with Germany, Sweden’s total land area is 25 % higher but with nine million inhabitants it has only about a tenth of the population. Food scandals are rare in Sweden, and there is not yet any real discussion of gene technology in agriculture.  This leads to the conclusion that ecologically produced food does not yet have a sufficiently positive image in the eyes of the consumer compared with conventionally produced food.

At the beginning of September 2005, a new network was founded to create improved cooperation and thus to strengthen the organic industry.  The project coordinator, Gunilla Anderson, reported that the first meeting was attended by 45 representatives of the retail and wholesale trade, industry, the public sector and various organisations from all over the country. She is the manager of the Regional Network Ecological Market Centre (www.eklogisktmarknadscentrum.org) in Malmo, and in her view the organic sector has a great deal of export potential. She thinks that jams made from wild blueberries and cranberries, crisp bread, French toast, cheese and other dairy products have a good chance of success.  The range of exports could also be expanded with industrial raw materials like sugar and potato starch.

As an exporter of organic products Sweden is still small-scale; the value of its exports last year were 6.7 million Euros. Cereals accounted for a third, with  oats especially  playing  a major role. Ecotrade is the biggest exporter in Sweden. Oats are used to manufacture the milk substitute products in the Oatly brand. These products are made by Ceba Foods in Lund in southern Sweden and have a turnover of  seven million Euros and an annual growth rate of approximately 30 %. Another important exporter is the firm Swedeponic that sells fresh herbs and other spices. The well-known Swedish furniture manufacturer Ikea is an export business of a more unusual kind: for example, 50-60 tons of blue cheese from the organic dairy Skanemejerier are sold in the Sweden-Shops of the furniture chain abroad. As with Ikea, the proportion of organic products produced by two conventional manufacturers is on the increase - Bjornekulla (jams and conserves) and Svenska Lantchips potato crisps). The family enterprise Bergman Sweden (turnover 2.1 million Euros) does not export food but organic cotton. This cotton is cultivated in Peru.

Organisations:

www.ekolantbruk.se
www.ekologisktmarknadscentrum.org
www.krav.se/english.asp

Companies:

www.coop.se
www.ica.se
www.axfood.se
www.satakvarn.se
www.ecotrade.se
www.oatly.com
www.swedeponic.com
www.skanedairy.com
www.bjornekulla.se
www.svenskaalalantchips.se
www.bergmansweden.se