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Share of Swedish organic market decreasing due to new trends – Insurance for Pets

The Swedish organic food market is losing shares, the Ekoweb market report shows. Although the turnover measured in the Swedish krona increased in 2019, this is due to the higher food prices, while the share of organic products is decreasing.

Olle Ryegård, analyst at Ekoweb: “Sales of organic food via the retail trade decreased in 2019. All major shareholders lose organic shares. Systembolaget (responsible for alcohol sales), Foodservice wholesalers and web stores see an increase in both sales and organic stocks. Nevertheless, the total Swedish organic food market is losing organic shares. « 

Now that Ekoweb is presenting its market report on the organic food market in Sweden for the twelfth year in a row, it is clear that the increase in turnover of recent years has now stopped. This trend was already expected in 2016, Ekoweb writes in a press release, but is now visible throughout the retail trade.

Organic food sales have been estimated to have increased by one percent in the past year, equivalent to 400 million Swedish krona (€ 37.5 million) and 2 percent of the projected forecast for 2019. But food prices also rose over the same period by 3.5 percent, as a result of which the share declined organically from 9.3 to 9.0 percent.

Different focus
The declining biological share in the market can be explained by a changing focus in the retail trade. According to Ekoweb, the focus is shifting from organic to other trends and thus following the social debate. Trends such as health, sustainability, environment, climate and CO2 are still current. Vegetarian is emphasized in the report as an increasing trend in which many stores invested during the year.

Olle Ryegård: “It is clear that the sale of organic food has declined. They are no longer as hot and trendy as vegetarian products. A great added value, and a requirement, is the extremely high welfare of the animal, an added value that is of course completely unimportant for customers who purchase vegetarian food. But trends that increase convenience, such as the ready-made meals that are now extremely popular, also have a negative impact on organic products, because there are hardly any organic alternatives in that area. I am convinced that the organic market can still grow, but then the retail trade must want to change, especially how it is offered. Otherwise we have to accept a stagnated market. « 

Fewer animal products
The segment within the organic products that decreases the most according to the report are Swedish animal products. Sales of Swedish organic dairy products decreased by around 5 percent during the year. But also organic minced meat, lamb, chicken meat and organic eggs are declining. According to Ekoweb, this may be because the general view is that organic is expensive and / or because the stores offer it less.

Increased online trade
Systembolaget increased its share in the organic market to 13.25 percent in 2019, making it the second largest shareholder. The public sector remains the largest with a share of around 38 percent. However, there is a trend that municipalities are saving on organic food, despite the national target that 60 percent of consumption should be organic by 2030. Furthermore, online sales continued to grow and even increased by around 20 percent last year. Organic sales for hotels and restaurants increased by around 8 percent.

Finally, the forecast for this year was presented. Ekoweb expects that the sales of organic foods with around 500 million Swedish krona (€ 47 million) will continue to increase in 2020. This corresponds to a value increase of 1 to 2 percent. It is also expected that sales will grow by almost 10 billion Swedish krona (€ 937 million) by 2029, which means a biological share of just under 13 percent.

Some figures from the Ekoweb market report

  • In the retail trade, supermarket chain ICA had the largest market share of organic food in 2019, followed by Systembolaget and Coop.
  • The value of organic sales rose to 28.2 billion Swedish krona (€ 2.6 billion) in 2019.
  • Denmark leads the way in terms of organic growth and exported 4 billion Swedish krona (€ 375 million) of organic products. Swedish exports amounted to 1.2 billion Swedish krona (€ 112 million).
  • There are 5700 organic farms in Sweden. In 2018, 20 percent of the total agricultural area was used for organic cultivation.