Trade Symposium at BioFach: Attracting Customers, International Models of Success

“Organic trade - reaching consumers with innovative ideas” was the title of this year’s specialist symposium that was held one day before BioFach opened in Nuremberg. It was attended by around 200 visitors from 39 countries. The Federal Ministry for Food, Agriculture and Consumer Protection and IFOAM (International Federation of Organic Agriculture Movements) organised this fourth international symposium as part of BioFach. The speakers - politicians and successful entrepreneurs from Denmark, Poland, India, the USA and Germany - dealt in their contributions with the topic of appealing to the consumer, and they provided a picture of developments in their own countries. How do I reach new groups of customers, bearing in mind the particular context in my own country? This was the question to be addressed.

Picture: The German Government plans a Law against Dumping

Jan Krzystof Ardanowski (picture), Permanent Secretary in the Polish Ministry of Agriculture, stated that the aim of his government was to increase organic agriculture. Their long-term objective was to improve the environment and food quality by means of organic agriculture. Also, his government did not want more and more people leaving the countryside for the towns; it was a question of stopping this migration and giving farmers better prospects. Ardanowski said: “We are a part of the community which is Europe and we can see how the interest in organic products is increasing.” He admitted that interest in Poland was not as pronounced as in Germany, but it nevertheless clearly existed.  He expressed his hope that Germany would support the developments in Polish organic farming.

For Ardanowski, great opportunities to develop organic products arose from problems like BSE and bird flu but also from the fact that Poland had good prospects as a farming country. Poland used, for example, only one tenth of the pesticides employed in the countries in Western Europe. The natural environment in Poland’s rural regions was far less contaminated by growth hormones and plant protection chemicals. The Polish Government was not interested in introducing genetically modified products. He emphasised this standpoint: “We don’t want to do any experiments with genetically modified products.”

He went on to explain that opening up the market in Poland was made difficult by the fact that there were no functioning sales systems for organic products. Also, regulation and certification had to be improved. At the top of the Government’s current agenda were explaining organics to the consumer and providing information. He promised a campaign of consumer information about organic farming and organic products, one half of which would be financed from EU funds and the other by the Polish State. Among other things, TV advertising was planned to make customers aware of the high quality of organic products but also to point out that higher prices were necessary. As well as promoting organics, the three-year programme was intended to drive forward research, science and the development of production methods. “Modernity in agriculture in Poland means using natural resources and producing food without exploiting nature.”

Dr. Gerd Müller (picture above), Permanent Secretary to the Minister for Food, Agriculture and Consumer Protection, emphasised the growth rates worldwide of organic agriculture and the marketing of organic products.  He declared that Germany was in a leading position with its turnover of 4 thousand million Euros and was the biggest market for organic products after the USA. Dr. Müller, representing the Consumer Protection Minister (Mr. Seehofer) at the symposium, explained that it was the duty of the organic trade to retain its customers over the long term and to communicate to them that “quality comes only at a price.” The proposal of his ministry was: “A law has to be brought in to prevent the sale of food at dumping prices. A law against profiteering is great in the case of food.” For him the objective was that consumers could expect high quality in the case of all products, whether traditional or organic, and certain standards in animal keeping and feeding. Common standards (sustainability and production) had to be discussed in the EU and worldwide. However, it was up to the consumer to decide what he bought. “The government is on the side of tolerance in our dealings with each other and is open to such ideas as sustainability.”

Walter Robb, President and Managing Director of Whole Food Markets, Inc., USA, introduced the strategy of an enterprise that has the highest turnover in organics worldwide (3.8 thousand million US$). He said the slogan of his enterprise was: “The management looks after the employees, the employees look after the customers, and the customers look after the shareholders.” He explained that in a nationwide ranking of the best jobs Whole Foods came 15th. He went on to say that the business aim of the company was to turn occasional customers into permanent customers. “We want to sell more products to more people. Organics must become mainstream.” It was important to work towards this goal. Whole Foods stores are open 365 days a year, and the organic stores were the first to be given certification. (Editor’s note: only around a third of products in these supermarkets is organic.)

Mr. Robb stressed that it was important to tackle the issue on many fronts. He gave the example of Los Angeles, where the curriculum has been developed to make the younger generation aware of organics, so that children learn to appreciate the full meaning of sustainability. He described other ways of reaching more customers: sending out gift tokens for the purchase of baskets of fruit, opening restaurants on organic farms and addressing the requirements of different ethnic groups. In his opinion, delivery services often reached people who did not go into organic shops.

The fact that organic products were available through more and more sales channels, such as the big conventional supermarkets Safeway and Kloger and regional programmes for regional organic goods, would soon make itself felt.  The range of organics was becoming more and more varied and also more professional: there was a much wider choice of clothes available, and there was now a wide selection of natural textiles for the household. Similarly in the retail trade, product ranges were being extended all the time: salad bars, juice bars, self-service meat and organic flowers were slowly becoming standard. Not least, the organic market needed credible, prominent advocates who, out of conviction, would break a lance for organic food and the new lifestyle.

Annette Hartvig Larsen (picture), the Managing Director of the Danish box scheme company Aarstiderne (25,000 boxes a week), summarised the service concept of the enterprise:

The four pillars supporting the concept were: “Being there”, “Involving yourself”, “Being honest”, and “Making it happen”.

She explained what these meant:

1. Being there: the boxes were a solution for busy families. The food products were brought to the door, and the boxes also contained recipes and a newsletter.

2. Involving yourself: through security, peace of mind and a position of strength. Instead of an anonymous call centre, Aarstiderne had set up a special facility, an open forum on the internet for conversations and internet diaries and news from the company.

3. Being honest: trusting employees, offering transparent prices instead of discount campaigns. Making yourself different from the mainstream, always communicating and creating clarity; involving employees in management decisions.

4. Making it happen: doing what you say you will do, giving employees the opportunity to get involved.

Raj Seelam, the managing partner in 24 Lettered Mantra, the first whole food chain in India, explained the great importance attributed to food in general in India. India is not only one of the most important growers of rice and vegetables in the world but also one of the biggest producers of milk. Currently, 45 % of the population work in agriculture. Seelam considered the large number of young people in the population, growing prosperity (many households had two incomes), awareness of new trends and a strong awareness of quality to be the right conditions for creating an attractive market for organic products in India.

He pointed out that there were, however, a number of factors that stood in the way of development. Among these were the low level of awareness in the population of organic products, the varied availability of organic goods and the very high cost of marketing. Despite these obstacles, Mr Seelam was confident that in the short term the market would develop positively, not least because of a growing awareness of health issues. It is to take advantage of this opportunity that he wanted to create a strong brand with 24 Lettered Mantra, emphasising whole food products and embodying health and purity of product but also communicating the message about the environment. In his view, important work had to be done to raise consumers’ level of understanding of organics so that they appreciated the difference between genuine and pseudo-organic products. His final comment was that in India about 70 % of the daily food requirement could already be covered by organic products.