The specialist trade in Switzerland ready to take off?

The specialist trade in Switzerland is characterised by fairly small and medium sized businesses. Only five of 387 stores listed in the specialist service Bionetz.ch have more than 200 m² of floor space at their disposal. So far there has not been a boom in founding organic supermarkets such as has occurred in Germany and Austria. The reason may be the proverbial resistance to change on the part of the Swiss;

Picture: Höheners in Basle

on the other hand, the reason frequently given for the lack of enthusiasm for opening more organic supermarkets is the massive competition from the Coop (market share of organic products 51 %) and Migros (25 %) which are regarded as large-scale operators in Switzerland. The specialist trade is left with just 15 %. Moreover, according to industry experts, it is difficult to find locations that are both good and affordable (less than 15 Euros per m²). However, in Switzerland the average turnover per head (97 Euros) is more than twice as high as in Germany (42 Euros). A rough calculation shows that the percentage per head spent in organic food shops is about the same.

An up-to-date analysis carried out by the business consultants Ecozept investigated 50 shops. The average floor space of these specialist businesses was 95 m² (France: 113 m², Germany 126 m²). In a comparison of the three countries, the turnover in Switzerland of 6300 Euros per square metre was the highest. The turnover per employee was found to be about 160.000 Euros. Whereas almost two-thirds of shops in France and Germany experienced a positive development in turnover last year, this only applied in Switzerland to a good third of shops. Just under half stated that turnover was stagnating, and in the case of 18 % turnover was even declining.

At the moment, it is difficult to say whether in the next few years suitable entrepreneurs (picture: Thomas Vetter, Bern) will appear on the scene with the necessary experience to establish new organic supermarkets. What is certain is that various modes of financing could be utilised apart from the conventional loans from banks. It is the opinion of the author that suitable locations too would be found if a professional search was implemented.

At the beginning of November 2005 the whole food shop Rägeboge (Rainbow) in Winterthur is moving into new premises and is increasing its floor space to 332 m². The shop will open on 11th November. About 200 m² will be occupied by a pharmacy with natural

products and 72 m² will be taken up by an organic bistro. Rainbow is a cooperative with two shops and has been operating in the organic market since 1982. The original shop was re-positioned in 2003 at the upper end of the old town in Winterthur and has approximately 120 m² of floor space. The second shop was founded in 1986 and is now making excellent progress. (picture: Höheners, Basle)

The total turnover of organic products on the Swiss market was 1.18 thousand million Swiss Francs (760 million Euros) according to the Yearbook Organic Agriculture in Switzerland 2005. This constitutes 3.5 % of the total food market. The organic proportion in some products is much higher: in the case of beef already as high as 9 % but only 1-2 % of pork, poultry and veal. The figures for milk are 11 %, for eggs 9.5 % and for bread and fresh vegetables 9 %. It is stated that studies carried out by various institutions have shown that the preference level for organic products differs according to the product group. According to the FibL Yearbook this is attributable in the case of milk products (yoghurt, cheese) to a more limited supply, poorer quality and 'unappealing packaging'. A survey by FibL of the conventional food retail trade revealed prices for organic food 53 % higher than for conventional food. The prices in the specialist trade are 32 % above these prices. Whereas a few products in the specialist shops are very slightly more favourable than in conventional shops, prices are 50-70 % higher in the case, for example, of fruit and natural yoghurt, Emmental cheese and olive oil. The consultant Toralf Richter who organised the survey commented: 'The reasons for such a wide variety of margins between the specialist shops and traditional shops are obscure'. To compare prices, 26 products were purchased in February 2005 at the Coop, Migros and three specialist shops.

The area of land devoted to organic farming has grown continuously since 1997. Last year the growth rate was 3 %. The proportion of organically farmed land is 10.5 % of the total agricultural land available. This figure puts Switzerland in third place in the world after Liechtenstein and Austria. The number of organic holdings is 6420 which constitutes 11 % of all farms. In the Canton Grisons, the majority of farms (52 %) are already organic!

The food market in Switzerland is largely sealed off from the outside world. Food can only be imported with a tariff if a shortage of particular products arises. Because of comparatively high consumer prices for food adequate producer prices have been achieved which was to the benefit of farmers. Thus, 80-85 % of organic food in Switzerland is from domestic production. Imports are mainly products like tropical fruit that cannot be grown at home. However, it is expected that in the process of convergence with the European Union protection of agriculture will be reduced. Consumers will be happy with this development, but it will probably be to the disadvantage of farmers, as we have seen in the countries in the European Union over the past few decades. (Diagram: Market Share in Organic Sales in Switzerland)

Few have sought to emulate the pioneer of Basle

Andreas Höhener is about to celebrate his tenth anniversary: in November 1995 he moved into a former Migros Store, a shop with 200 m² of floor space and big display windows on the edge of the old town in Basle. Before this move, he had gained experience with his 75 m² shop nearby. Together with Vatter in Bern (picture), he is one of the few specialist shops in Switzerland with a fresh meat counter. By virtue of well organised and clearly arranged shelves, the customer quickly gets a picture of the whole range. The presentation of fruit and vegetables, meat and the bread, cakes and pastries counter are especially attractive. In season, a wide range of herbs and potted flowers is on display in front of the shop. Much care and attention has been devoted to decorating different areas down to the last detail, for example where wine or food samples can be tasted. Customers can enjoy a snack or a fruit juice at three bistro tables. Open sandwiches and hot and cold drinks are available. He challenges competition from a nearby Coop supermarket with clever advertising in the daily paper and with cinema slides. Fourteen full-time and part-time staffers keep the shop going and achieve a turnover of approximately 3.5 million Swiss Francs (2.2 million Euros).

Tips:

The Health Food Market - A Comparison of Germany, France and Switzerland,  Price 70 Euros - http://www.ecozept.com/Ecozept Naturkoststudie Bestellschein 2005.pdf

FibL Year Book 2oo5, Price 17 Euros, 140 pages www.fibl.org/aktuell/pm/2005/0617-jahrbuch.php

Specialist Information Service for Switzerland: www.Bionetz.ch

The Shopping Guide for Organic Products and the Restaurant Guide 'Gout
mieux' 2005/2006 from the World Wildlife Fund for Nature: www.wwf.ch/essen