Companies that have a large proportion of organic food in their range have a more positive view of sales development than companies with a smaller share of eco in the range. This is shown by a new KANTAR Sifo survey among companies that have organic products in their range.
Six out of ten companies believe that organic sales will increase, of which almost a quarter believe in a large increase. The survey shows that the larger proportion of organic foods companies have in their range, the more positive they look at sales development over the next two to five years. Among the companies that have the largest share of organic products, seven out of ten believe in increased sales.
What also emerges in the survey is that companies with a large share of organic experience that they have better profitability compared with the companies that have a small share of organic in their range.
- Organic and KRAV-marked is important and contributes to many of the UN's global sustainability goals. Therefore, it is important that eco is not reduced to a trend. As eco is already an established value-added concept in the market, sales will continue to increase. We as a company will continue to invest and make more and more products available on the market, says Jonas Regnér CEO Saltå Kvarn.
The three added values that companies believe will be most in demand over the next five years are locally and locally produced (51%), organic (19%) and environmentally friendly and sustainable (18%). The fact that locally and locally produced produce appears as the most important added value can be linked to consumers' increased interest in the climate issue and food with a clear identity. A renewed focus on Swedish agriculture after the drought in the summer of 2018 is another explanation.
- This should not be interpreted as a reduced interest in organic and KRAV - but rather that consumers to a greater extent demand locally produced food that is organically grown. Through closer collaboration between organic farmers and processing companies, the organic industry can become much better at developing products with raw materials from Swedish organic farming, says Charlotte Bladh André at Organic Sweden.
The biggest challenges for developing and increasing the supply of organic and KRAV-labelled foods are, according to the companies, the supply of ingredients and raw materials, price and profitability, demand and difficult rules. The survey also shows that the interviewed companies believe that increased awareness, campaigns in the grocery trade and more marketing are important measures to increase the supply of organic products. These measures are about making visible and communicating the benefits of organic and KRAV-marked food.
EDGES The Sifo survey was commissioned by KRAV and Organic Sweden and is called the "Organic Producer Barometer"
The most important insights:
- The greater the proportion of organic food relative to its turnover, the better profitability and a more positive view of the future companies have
- The benefits of organic certification, such as KRAV, is perceived as significantly larger among companies with a high proportion of organic in the range
- The three added values that companies believe will be most in demand by their consumers over the next five years are locally and locally produced (51%), organic (19%) and environmentally friendly and sustainable (18%)
- The main challenges for developing and increasing the supply of organic food are supply of ingredients and raw materials (26%), price and profitability (25%) and demand (16%).
- Three out of four exporting companies believe in increased exports of organic food and beverages
- There is widespread uncertainty about what added value is required in the export markets as well as about what measures are needed to increase exports
A total of 193 processing companies were interviewed with organic food in the range over the telephone. Those interviewed were primarily the CEO and marketing manager as well as the export manager in cases where the companies had any exports. Among the selection, we find companies with production in more than 15 different categories. The most prominent categories are cereals & bread (19%), meat & charcuterie (18%), vegetables (13%) and dairy & cheese (10%). Also in terms of turnover, there was a large spread of companies in the survey.
Download and read the full report:Ecological Producer Barometer 2020