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Export Study - Chapter 3.3 Germany - Organic Trade Association
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Export Study - Chapter 3.3 Germany

 

3.3.1 Development of Organic Agriculture

Germany is certainly one of the countries with the longest tradition in organic farming, with its earliest roots dating back to the end of the 19th century. During this time, the so-called "Reformbewegung" (reform movement) developed its philosophical view of the connection between the health of the soil, the growth of plants and the health of mankind. "Reformhäuser" or reform shops were established where it was possible to buy the goods that were grown according to this view. In 1924 Rudolf Steiner outlined the principles of biodynamic agriculture and in the mid-thirties the Müller-Rusch biological-organical method gained ground. However, all these movements remained marginal and the reform shops were the only places where organic products were to be found.

In the early seventies, organic farming became more popular, and a plethora of small, independently owned Bioläden and Naturkostläden (organic food shops and natural food shops) spread throughout the country. They were solely dedicated to selling organic products, and their customers were mostly dedicated, even zealous supporters of organic farming and alternative sales structures. While the nature of these shops and their approach has changed, in Germany the mostly independent Bio- and Naturkostläden continue to be the main force in terms of selling and promoting organic products.

Figure 10: Number of Organic Farms and Acreage under Organic Cultivation
Until 1990, the number of farms devoted to organic agriculture remained below 1,000. The enactment of the EU rule 2092/91 for organic agriculture in 1991 triggered an rise in the number of farms and the acreage under organic cultivation that is still going on today. Since 1994, Germany has experienced a steady increase in organic acreage and number of farms. In fact, the number of organic farms increased almost tenfold during the last decade and is now in the area of 9,500 farms, the third largest number of organic farms in any European country (see figure 10). The total organic acreage is more than 1,000,000 acres, second only to Italy. In 1999, 2.42% of the total German arable land was devoted to organic agriculture. The average acreage per farm is 105 acres, with a major increase in average farm size triggered by the conversion of large East German farms going organic after the German reunification in 1990. One of the corollaries of the constant growth in numbers of farms and acreage has been that organic grain prices have dropped substantially, due to an oversupply situation. Germany, in the eighties the biggest importer of organic grain in Europe, has become almost self-sufficient with respect to organic grain supply.

German organic farmers are organized in more than ten producers association, some of them with more stringent rules than the EU regulations. The Arbeitsgemeinschaft Ökologischer Landbau (AGÖL - Association of Organic Farming Organizations in Germany) is an umbrella organization comprised of nine of the bigger producer associations, accounting for 80% of organic farms in Germany.

3.3.2 Infrastructure of the Organic Market

3.3.2.1 Processing, Distribution and Wholesaling

As in France, the German processing sector has historically been dominated by a large number of small processing firms, and this is still the case. Under the umbrella of AGÖL, the Arbeitsgemeinschaft Ökologischer Landbau (Association of Organic Farming Organizations in Germany), which originally was created as an association of the nine largest organic farming associations (Demeter, Bioland, Naturland, Biokreis, ANOG, Biopark, GÄA, Ökosiegel, Ecovin), presently 800 processors are certified. The biggest organic food processor in Germany is the baby food manufacturer Hipp, which claims to be the leading organic food processor worldwide with 1,000 organic farmers and approximately 45,000 acres under contract. Hipp’s gross sales in 1999 are estimated to be $ 250-300 million. The company’s share of organically grown ingredients is presently well over 70% of its total ingredients supply and still growing. It is Hipp’s stated goal to convert its production completely to organic. Hipp is not only known for its organic baby food and fine desserts, but also for its sincere commitment to an environmentally sound production. The company is also unique in that as a midsize enterprise it is the overall leader market leader in baby food on the German market (total market share 39.5% in 1999 and market share of baby food in glasses over 60%). It successfully competes with far larger food concerns like Nestle (brand name Alete) or Numico N.V. (brand name Milumil), the market leader in infant and baby nutrition in Europe. [24]

Another major player is Rapunzel AG, with a gross turnover of $40 million in 1998. From the very small beginnings of a Bioladen (specialist organic food shop) Rapunzel grew to its current size within the last 20 years and is one of the organic pioneers in Germany, its name very renowned in the industry. The company acts as processor, importer, and distributor of organic foods and is certainly a key supplier for specialist organic food shops (Naturkostläden or Bioläden in German) and boasts of carrying more than 800 different products, most of them sold under the Rapunzel brand. The company is solely dedicated to organic food and has a strong social and environmental commitment. It maintains excellent trading ties to many European countries and owns an oil mill in France. Furthermore, Rapunzel played a vital role in developing organic agriculture in Turkey. The company recently founded a subsidiary whose main goal is to serve the private label business for supermarket chains without alienating its traditional customers.

Naturata e.G., is a somewhat smaller company in this field with estimated gross sales of $18 million and its own Naturata brand. Naturata prefers products of biodynamic origin, which it distributes to twelve wholesalers, which in turn exclusively sell Naturata products to specialist and health food shops (Naturkostläden). The De-Vau-Ge Gesundkostwerk consists of a group of manufacturers with brands like Bruno Fischer, Martin Evers, Granovita, Eden, Linusit and the Distribution Company Biologistik. runs the organic "Gut und Gerne" brand and organizes several others.

The big conventional food manufacturers have entered the organic market in only a limited fashion and with mixed results. Nestle has some organic baby food lines, but Danone’s attempt to convert its "Jahreszeiten" Yogurt brand to organic failed and the product was pulled from the shelves.

There is some movement in the conventional ingredient supplying industry, though. For example, Döhler Natural Food Ingredients GmbH, an internationally operating company with production plants in Germany, Belgium, Belize, Brazil, India, and China has started to manufacture organic ingredients. Döhler is known as a supplier of bases, concentrates, flavorings, and emulsions for juices, vitamin and health drinks, iced teas, colas, fruit yogurts and frozen gateaux of leading brands. Another example is Kessler & Co., a mid-sized supplier for the baking industry, which recently introduced organic product lines.

Producers and processors of organic foods are organized in the Federal Association of Organic Food Producers (Bundesverband Produzenten ökologischer Produkte). The "Alternative Business Directory" (Alternatives Branchenverzeichnis), published by Altop Publishers, contains a comprehensive list of list of certified organic processors (see Annex 1, Germany).

Wholesalers in Germany generally operate on a regional level. A strong political and philosophical movement, emphasizing the importance of regional connections in production and trade as well as the environmental impact of foodmiles has supported this structure in the past. In practical terms this distribution structure required access to a network of wholesalers (10 or more) in order to cover the whole country distribution wise. The Bundesverbände Naturkost Naturwaren (German Association for Natural Food and Products) is the association of wholesalers and retailers of the organic industry and includes 28 members of the wholesale sector (see Annex 1, Germany, for access to a list of German organic wholesalers).

One of the bigger wholesalers is Dennree Versorgungs GmbH with estimated gross sales of $65 million in 1999. Dennree sells mainly dairy, fruits and vegetables. Bio-Zentrale GmbH, controlled by Delvena Lebensmittel Kontor , had a gross turnover of $38 million in 1999. Bio-Zentrale also supplies the dry assortment of several private labels and is increasingly involved in dealing with fresh produce including dairy. Another major player in this category is Lehmann Natur, which specializes on organic fruits and vegetables for supermarkets. Other wholesalers and packers are Care Naturkost GmbH, Grüner Punkt Naturkost GmbH, Georg Rösner Vertriebs GmbH, Übelhör KG, Naturkost Schramm, Ernst Weber Naturkost, and Euro Bio Korn.

In the last decade, however, a substantially new development has taken place: large supermarket chains have entered the organic marketplace. Pioneered by the smaller companies Tegut (Alnatura) and Tengelmann (Naturkind), gradually most of the major multiples either created their own private organic labels or started selling a wide array of organic products or both.

The "traditional" organic manufacturers, which have been oriented to selling exclusively through Natural Food Stores, Cooperatives, Reform Stores and Organics only supermarkets, have reacted to this development by creating labels which specifically cater to those supermarket chains so as not to alienate their traditional customers.

This decision of major supermarket chains to create their own organic labels or introduce organic products is already showing its effects on the distribution and wholesale level resulting in mergers or acquisitions of smaller wholesalers by bigger ones so as to generate enough sales volume to stay competitive.

Weekly updated information on prices and general market information is available from the Zentrale Markt- und Preisberichtstelle für Erzeugnisse der Land-, Forst- und Ernährungswirtschaft GmbH (ZMP, Central bureau for information on markets and prices for agricultural, nutritional and forestry products) at http://www.zmp.de/projekte/bio/bio_titl.htm. Unfortunately, this information is only available in German.

3.3.2.2 The Retail Market

Germany is by far the biggest market for organic food in Europe, with total current retail sales estimated at $2 billion (figure 7), more than double the size of the next biggest market, Italy (current size approximately $880 million).

Figure 11: Retail Sales of Organic Food in Germany 1994-2000

In comparison to other larger organic food markets, growth is at a rate of 8-9% in 1998 and 1999 substantially lower than in France and the UK, but from a substantially higher basis. With more than 82 million inhabitants Germany, is the most populated country within the European Community. The per capita consumption of organic food, however, is not extraordinarily high, and compared with the Danish annual per capita consumption considerably less than one half ($22 to $56). The estimated total retail sales of organic food in the amount of $2 billion (figure 11) in 2000 account for a share of 1.8% of the total food market.

Figure 12: Sector Shares of Retail Outlets in Germany in 1999

Source: BNN Comber [4,7]

Figure 8 clearly demonstrates that specialist organic shops (Bioläden and Naturkostläden) account for the lion’s share of sales; together with Reform shops and farm gate sales they hold 64% of the retail sales. This structure reflects the generally high dedication of the more traditional organic customer, who in many cases goes the extra mile to visit one of the approximately 2,500 specialized shops or makes the extra effort to buy directly at the farm gate. By contrast, supermarkets hold a market share of only 24%, considerably less than in France and the UK, but about the same level as in the Netherlands. In Germany, like in France, there are many small bakeries solely dedicated to baking organic bread, even if the total number of several hundred pales in comparison to the several thousand in France. [7]

Even if the market share of specialist organic food shops (health food shops in figure 7) is slightly declining due to the slowly increasing market share of the multiples, overall sales are still growing, as is the average square footage of the shops. The latter rose from 825 square feet in 1997 to 1,000 square feet in 1999, which is still small in proportion to US shops. The vast majority of the specialized shops are still independently run. Franchising systems or other forms of cooperation have not yet taken root among the specialists.

A recent development is the introduction of organic supermarkets. The pioneer of this outlet type was Alnatura, which established the first outlets 10 years ago and presently runs eight shops. These supermarkets carry around 7,000 different items, including non-food articles like clothing, natural cosmetics and toys. Presently there are 30 organic supermarkets open, and one of the newest, Basic in Munich, serves as a pilot unit for testing a franchising system. Average square footage is in the area of 6,000 square feet and annual gross turnover is between $1 million and $2.5 million. Some experts expect 150-200 of those stores to be established in Germany by the end of the year 2000..

Reform shops, which are connected to the Reform Movement emphasizing a healthy lifestyle, natural cosmetics, certain food supplements and nutritious food, if not necessarily organic, still make up for 9% of total sales.

Farm gate sales and box schemes have thrived within the last years. Box schemes, which are subscription system for organic produce and groceries, mostly on a weekly basis, have been introduced with great success ten years ago. There are now almost 300 subscription systems for box schemes being offered, as they provide the convenience of home delivery in combination with a trusted source for organic food. Properly conducted y farm gate sales leave a greater portion of the profits with the farmer and in many cases can be combined with a direct experience of the farm, an especially attractive combination for young families.

The Tengelmann Group introduced organic products in supermarkets. Its "Naturkind" label was the first of its kind in Germany. The smaller Tegut group followed suit a couple of years later, with the introduction of the organic Alnatura shop-in-shop concept for dry goods and carrying fresh produce and dairy products from a variety of different suppliers. Tegut maintains that 8% of its total foods sales are organic (1999). In the early nineties, the larger multiples Edeka and Rewe, followed by Metro and Globus joined the organic field. Rewe is estimated to reach up to $250 million of organic annual sales by the end of the year 2000 [7]. For a complete picture of the companies involved, see the table 8. It should, however, be noted that although the list of involved multiples looks fairly impressive, the involvement of a major retailer does not necessarily mean a full-hearted engagement, resulting in the fact that several of the multiples shown below do not carry organic products in all of their outlets.

Table 8: Major Food Retailers in Germany and their Involvement in Organic Food Sales

Company

Main outlets

Organic assortment, fresh

Own label, dry

Labels

Rewe

Minimal, Toom, Rewe

Yes

Yes

Füllhorn,

Gut & Gerne*

Metro

Real, Extra, Metro, Kaufhof

Yes

Yes

Grünes Land

Edeka

Edeka, AVA Neukauf, E-Center, Marktkauf

Yes

Yes

Bio-Wertkost

Aldi

Aldi

Very few products

No

No

Tengelmann

Tengelmann, Kaiser, Grosso

Yes

Yes

Naturkind

Spar

Spar

Various products

No

No

Lidl & Schwarz

Kaufland

Few products

No

No

Schlecker

Schlecker

Only baby food

No

No

Dohle Group

Dohle, Marktfrisch

Few products

No

No

Globus

Globus

Yes

Yes

Terra Pura

Tegut

HaWeGe, Okay, Top Markt

Yes

Yes

Alnatura*

*Labels with an asterisk are manufacturer labels.

Source: Kortbech et al., [22], Organic Insights

Recently, sales of organic goods through the Internet have started. Rapunzel was on the forefront of this development, and in September 2000 the Tegut supermarket chain, a pioneer in organics retailing, announced its intention to start selling 150 different dry organic products over the Internet in the fall of 2000. Tegut intends to expand this service to fresh produce in the course of spring 2001.

3.3.3 Breakdown of all Organic Products Sold

Fruits and vegetables

Fruits and vegetables constitute the largest product group with more than 18% market share. (table 9). While the domestic supply oh fresh produce like potatoes, carrots, onion, cabbage, leeks, celery and zucchini is more than sufficient, there is a significant supply problem for many fruits except apples and pears, and even apples are meanwhile being imported from Italy.

Table 9: Sales of Organic Food by Product Group in Germany in 1998

Product Group

Retail Value $ million

% of total Sales

Fruits and Vegetables

331

18.4

Dairy, incl. eggs, Tofu

295

16.4

Bread and Bakery

257

14.3

Baby Food

200

11.1

Pasta, dried fruit, cereals, muesli

129

7.2

Whole grain, seeds, nuts

111

6.1

Bread spreads, honey, nut butter

92

5.1

Chocolate & Sweets, biscuits,

Baking ingredients

74

4.1

Soups, cans, convenience food

65

3.6

Meat & Sausages

55

3.1

Alcoholic beverages

55

3.1

Tea

37

2.0

Coffee & Cocoa

37

2.0

Fruit and vegetable juices

37

2.0

Oils & spices

27

1.5

Total

1,800

100

Source: Bundesverbände Naturkost Naturwaren [2], Kortbech et al., [22]

As in some Nordic countries, the limited supply range especially of fruits has slowed down the market development. Another factor is that many of the smaller specialist organic food shops carry only a very limited range of fresh produce and fruit as turnover is too low to stock a greater variety, as these products are susceptible to fast decay.

One of the bigger fruit and vegetable supplier is Lehmann Natur, which owns the Ökogarten label and belongs to the US Chiquita group.

Dairy

Dairy products represent an important product group for German organic consumers. It is estimated that the share of dairy products is still growing and presently may account for as much as 18% of total sales. Germany produces more organic milk than is presently consumed, partially a transportation problem owing to the fact that there are not enough organic dairies in reasonable vicinity to the dairy farms. Some estimates put the amount of organic milk sold conventionally as high as 50% in 1998, but this portion is definitely decreasing.

The largest product sectors are milk and cheese, followed by yogurt, butter, and quark. Main players in this market are Molkerei Söbbeke and Andechser Molkerei Scheitz. In 1997 Danone launched its Jahreszeiten-Joghurt in biodegradable containers. This product has been no success story, though. One of the main reasons was the marketing approach Danone chose, which was to alter an existing conventional label to organic. This did not work out well and Danone pulled this specific product in 1998.

Bread, bakery and cereals

Germany is renowned for its vast range of different breads and rolls and boasts the widest selection of bread available anywhere. Therefore, it is no surprise that bread and bakery products make up almost 15% of the total organic retail sales.

Bread and bakery products are mostly sold in small independent organic bakeries. However, the tendency to organize organic bakeries as chain operations is on the rise. The biggest chain of bakeries with over 100 outlets in southern Germany is owned by the Hofpfisterei, located in Munich, Bavaria.

A major player in the cereal sector are Rapunzel AG, which offers several types of mueslis and other cereals like oats and rolled oats, wheat and rye. Other companies involved in cereals are Naturata, Zonnatura and BZ Biozentrale, which is 50% owned by the large sugar company Pfeiffer & Langen of Cologne. The supermarket chains Rewe, Tengelmann, Edeka and metro also sell cereals under their respective labels. Davert Mühle is a major processor of grains and cereals.

Meat

Until 1997 meat had a minor place with very moderate growth rates from a modest base, but is currently one of the fastest-growing organic food sectors. The current annual growth rate is estimated to be as high as 25%. This growth rate reflects the concern of many consumers regarding food safety after the BSE scandal and a growing concern about animal welfare and the living conditions of animals on many conventional farms. [4] Also, the growth rate reflects the increased involvement of multiples, as they are much better equipped than health food shops to deal with fresh meat and sausages. Presently the biggest success story in organic meat in Germany is the alliance between Edeka Nord, a subsidiary of the Edeka supermarket chain, and the producer association Biopark. According to Wirthgen [43] Edeka Nord’s organic meat program accounted for 10-15%of of its total meat sales in the spring of 2000. This involved the creation of a specific label, Gutfleisch, as well as a sophisticated and appropriately financed marketing campaign. Rewe, one of Edeka’s competitors, has formed an alliance with Naturland, one of the big organic producers associations, and the smaller multiple Tegut also started selling fresh organic meat and sausage.

Other Product Categories

Organic baby food in Germany has been a spectacular success, owing to the efforts of the market leader, Hipp, who decided twenty years ago to use as much organic ingredients as possible in its products. Another reason why organic baby food is popular is the extremely severe EU regulation on baby food in terms of chemical residues, which are for most compounds near or at the detection level. Therefore, it is sometimes less expensive for conventional baby food companies to convert their production to organic and thereby ensure compliance with existing laws.

The popularity of Tofu products and other meat replacements is still increasing, as is that of convenience food and canned soups and vegetables.

Underserviced product areas

  • With the increase in organic bakery chains and shop-in-shop bakeries in supermarkets carrying organic bread and baked goods there is a heightened demand forecast for organic flour mixes and grains in general.
  • Demand for frozen foods in general is also increasing, albeit from a small basis. One of the problems with frozen foods, especially vegetables, is the insufficient availability of large quantities with limited quality variations and the guaranteed steadiness of supply.
  • Organic beverage sales will certainly boom, and especially those manufactured from tropical and subtropical fruits like grapefruit or oranges as well as vegetable juices. Germany is by far the biggest market for the just maturing organic beverage industry. Zenith International assumes that German fruit juice consumption between 1998 and 2003 will more than triple from 19.8 million liters to 63.5 million liters (from 5.2 million gallons to 16.8 million gallons), which will then represent 46% of total European consumption. [9]. While trade sources expressed some interest in Californian wine, the market potential seems limited owing to prices that are generally prohibitive as even conventional Californian wine is almost twice as expensive as German, French or Italian wine.
  • Condiments in organic quality including honey, maple syrup and jams are in demand.
  • Another area of growth is convenience food in all forms and shapes, and even specialized organic shop owners see it as a major growth area, although many of them shy away from the necessary investment to carry frozen food.
  • In parallel with the growing demand for ethnic dishes in general, ethnic organic food, particularly in the form of convenience food, appears to attract strong interest, specifically among buyers with higher income and education level.

3.3.4 Infrastructure and Characteristics of the Import Market

3.3.4.1 Channels of Entry and Imported Products

Germany is by far the biggest importer of organic commodities and products for sale in Europe. In former years, more or less specialized importers and industrial suppliers, who in turn packed or directly distributed the goods, carried out most imports of organic products. Within the last few years many of the companies engaged in distributing and wholesaling started to directly import themselves, while direct imports of multiples are still relatively infrequent, but rising. Therefore, almost all companies mentioned in the chapter on processing and wholesaling are potential importers.

Table 10: Value of Imported Raw Materials and Percentage of Raw Materials Imported in Germany in 1998

Product Group

Import Value $ million

% of raw materials imported

Fruits and Vegetables

46.5

45

Dairy, incl. eggs, Tofu, soy

26

20

Bread and Bakery

1.5

5

Baby Food

0

0

Pasta, dried fruit, cereals, muesli

19

78

Whole grain, seeds, nuts

17

90

Bread spreads, honey, nut butter

12

85

Chocolate & Sweets, biscuits, Baking ingredients

6

80

Soups, cans, convenience food

6

60

Meat & Sausages

0

0

Alcoholic beverages

3.5

60

Tea

5

90

Coffee & Cocoa

5

95

Fruit and vegetable juices

3

50

Oils & spices

3.5

95

Total

154

Source: Trade estimates as published Kortbech et al., [22], modified by Organic Insights

In addition, there are some specialized importers like Care Naturkost GmbH & Co (grains, seeds, dried fruits), Euro Bio Korn (cereals, seeds, fruits), Grüner Punkt Naturkost GmbH (fruits, preparations), Georg Rösner GmbH, Übelhör KG, and Weber Naturkost.

Overall, imports are an estimated 38% of the total value of raw materials. The biggest category is vegetables with $46.5 million, followed by the dairy, eggs, and tofu category with $26 million. In this category, most imports are soybeans and tofu, and, to a lesser extent, eggs. Next are the dried fruits, pasta, cereals, and muesli category with $19 million import value (table 10).

3.3.4.2 US Imports

According to a report by the Regierungspräsidum Karlsruhe [29], a state authority coordinating importing activities of organic products into Germany, in 1995 24% or 109 of all import licenses issued to so-called third countries were allocated for US imports, followed by Hungary with 40 licenses and Turkey with 38. These numbers, however, do not reflect the current picture, as imports from third countries such as Turkey, the Czech Republic and others have increased considerably during the last five years. For a complete overview over import licenses issued for US organic products between January 1999 and July 2000 see table 11 below.

Table 11 gives a comprehensive picture of the US organic products that are presently being imported to Europe, apart from giving a complete picture in terms of products imported into Germany. From the table it is clear that main product categories are grains including rice, pulses, fruits, dried fruits and nuts including almonds, dates, and soybeans. What is also worth noting is that in June 1999 the first import license for frozen food ingredients where issued, and in July 2000 the first license for frozen juice.

Table 11: Import Licenses Issued for US Organic Products Imported to Germany

1/1997-7/2000

No.

Date

Imported Organic products from the USA

1

2/25/97

Beans, linseed, mustard seed, millet, soy beans, alfalfa, peas, peanuts, popcorn, lentils, buckwheat, wild rice

2

2/25/97

Buckwheat, millet, linseed (brown), wheat, sunflower seeds, buckwheat grits, buckwheat flour

3

3/18/97

Raisins, almonds, currants,

4

3/18/97

Linseed, millet, sesame, buckwheat sunflower seeds

5

3/18/97

Spelt, sesame seed, Linseed golden, adzuki beans, mung beans, soy beans, buckwheat (peeled), Millet (peeled), sunflower seeds (peeled)

6/7

3/18/97

Grapes, dates (dried)

8

4/18/97

Buckwheat, linseed, millet, sunflower seeds, wild rice, basmati rice, soy beans, adzuki beans, mung beans, anastasi beans, Red Lentils, Red Lentils (peeled), du Puy lentils, brown lentils, pinto beans, green Peas, Red kidney beans, black Beans,

Small green beans, amaranth, blanched peanuts , almonds, plums (dried), raisins, soy lecithin, wheat, durum wheat, oats, barley, rape seed, thistle seed, dates

9/10

6/26/97

Apple bits (dried), apple rings (dried) Basmati rice

11

6/26/97

Sunflower seeds (peeled), buckwheat (peeled), millet (peeled)

12

7/8/97

Alfalfa, Radish

Buckwheat, millet, sesame, brown linseed, golden yellow linseed, alfalfa seed, amaranth, kamut, sweet rice, popcorn, corn, red and green lentils, mung beans, kidney beans, soy beans, white beans, green peas, flagolet beans, sunflower seeds, quinoa

13

7/8/97

Wild rice, mustard seed, radish seed, Thistle seed, Almonds, radish seed

14

7/8/97

Almonds (peeled), Plums (dried)

15/16

7/8/97

Cress seed, radish seed, , brown linseed, golden yellow linseed, beans, soy beans, buckwheat (peeled), sweet rice, amaranth, mung beans, linseed brown, linseed light

17

8/11/97

Alfalfa, clover, yellow peas, navy beans, popcorn, walnuts, radish seed, white beans, apples (dried), pears (dried), tomato powder

18

8/11/97

Popcorn, clover seed

19

8/11/97

Grapes, dried

20

8/11/97

Plums (dried), peaches (dried), pears (dried), apples (dried)

21

8/11/97

Amaranth, soy beans, kamut, alfalfa, buckwheat, wheat, lentils, beans: black turtle/ navy/adzuki/ chili/ kidney beans, radish seed, peas, linseed

22

8/11/97

Apples (dried), adzuki beans, alfalfa, amaranth, anastasi beans

23

8/11/97

Basmati rice, Pears (dried), clover seeds, brown Lentils

24

8/11/97

Buckwheat, thistle seed, du Puy lentils, peanuts, barley, green peas, oats, durum wheat, kidney beans, linseed, almonds, mung beans, navy beans, plums (dried), pinto beans

25

8/11/97

Popcorn, radish seed, rape seed, raisins, red lentils, black beans, sunflower seeds, soy lecithin, soy beans, walnuts, white beans, wheat, wild rice, millet

26

8/11/97

Alfalfa, adzuki beans, mung beans, navy beans, pinto beans, kidney beans, peas, millet, lentils, linseed

27

8/11/97

Adzuki beans, alfalfa, amaranth, clover, beans (white and black), buckwheat, peas (green and yellow), peanuts, millet, linseed, lentils (brown and red), mung beans, navy beans, pinto beans, sunflower seeds

28

8/11/97

Lentils, wheat, kamut,

29

8/28/97

Soy beans, beans, lentils, rice, (peeled)e sunflower seeds, (peeled), millet, (peeled), buckwheat

30

9/22/97

Sultana raisins

31

11/3/97

Grapes, dried

32

11/7/97

Sesame, linseed, sunflower seeds (peeled), millet (peeled), millet husks

33

12/2/97

Almonds, pistachios, dried raisins, dried apples, dried plums

34

12/2/97

Figs (dried)

35

2/27/98

Durum wheat

36

4/22/98

Lentils, peas, quinoa, radish seed, red clover seed, adzuki seed, black turtle beans, great northern beans, kidney beans, mung beans, navy beans, pinto beans, popcorn, soy beans, alfalfa seed, cress seed, linseed brown and yellow

37

4/22/98

Mustard (oriental and brown), amaranth, basmati rice brown, buckwheat, millet, sunflower seeds, buckwheat grits, wild rice, long rice, basmati rice

38

4/22/98

Buckwheat, linseed, sunflower seeds

39

7/10/98

Sunflower seeds, millet, buckwheat

40

8/17/98

Basmati rice

41/42

11/6/98

Almonds, plums (dried)

43

11/6/98

Apple rings (dried), apple bits (dried)

44

11/7/98

Grenadillos (Passioflora ligularis)

45

2/1/99

Palm fat

46

2/1/99

Cane sugar, cane sugar molasses

47

2/1/99

Peppermint leaves

48/49

2/1/99

Pears

50

2/1/99

Ruby grapefruit

51

2/1/99

Lentils, Wheat, Linseed, Beans, popcorn, sunflower seeds, soy beans

52

2/1/99

Soy beans

53

3/11/99

Buckwheat, linseed, millet, sunflower seeds, wild rice, basmati rice, soy beans, adzuki beans, mung beans, anastasi beans, red lentils, red lentils (peeled), du Puy lentils, brown lentils, pinto beans, green peas, red kidney beans, linden flowers

54

3/11/99

Black beans, small green beans, amaranth, peanuts, almonds, dried plums, raisins, wheat, durum wheat, oats, barley, rape seed, thistle seed, alfalfa, bockshornklee, yellow peas, navy beans, popcorn, walnuts, radish seed, white beans

55

3/11/99

Apples dried, pears dried, garlic powder , tomato powder

56

3/11/99

Dried apples, adzuki beans, alfalfa, amaranth, anastasi beans, basmati rice, pears dried, clover, brown lentils, buckwheat, thistle seed, du Puy Lentils, peanuts, barley, almonds

57

3/11/99

Mung beans, navy beans, dried plums, pinto beans, popcorn, rape seed, radish seed, raisins, red lentils, black beans, sunflower seeds, soy beans, walnuts, white beans, wheat, wild rice

58

4/12/99

Pears

59

5/3/99

Linseed pellets, brown lentils, buckwheat, thistle seed, du Puy, lentils, barley, green peas, oats, durum wheat, linseed, rape seed, red lentils, wheat, wild rice

60

5/3/99

Soy meal

61

5/21/99

Buckwheat, linseed, millet, beans, peas, lentils, peanuts, rice

62

7/15/99

Lentils, wheat, linseed, beans, millet, popcorn, sunflower seeds, soy beans, buckwheat, various seeds, Cereals, dried fruits, pulses, oils, fats, maple syrup, okara

63

8/9/99

Almonds

64

9/6/99

Frozen corn, frozen beans, frozen carrots, frozen potatoes, frozen peas, strawberry puree, raspberry puree, peach puree, apricot puree, pear puree, apricots, hazelnuts, figs, sultana raisins

65

10/7/99

Cashew nuts, soy beans, beans, Sugar

66

10/7/99

White and brown basmati rice

67

10/7/99

Apples, Pears

68

11/3/99

Dried dates (Medjool)

69

11/29/99

Dried dates

70

3/2/00

Medjool dates, rolled dates

71

4/7/00

Pears

72

4/7/00

Sunflower oil

73

5/26/00

Millet, buckwheat, sunflower seeds

74

5/26/00

Wheat

75

6/30/00

Rye, oats, wheat, buckwheat, barley, sunflower seeds, linseed, soy beans

76

7/25/00

Orange juice, frozen

Source: Bundesamt für Landwirtschaft und Ernährung (German Federal Authority for Agriculture and Nutrition) [2A]

3.3.5 Consumer Buying Patterns and Attitudes toward Organic Products

Various studies have been conducted to probe consumer attitudes and behavior towards organic products, among them the Sinus-Study by the Sinus Institute in 1995, a comparable study by Fricke, 1996, the CMA report 1996/1998 and a recent study commissioned by the Bundesverband Naturkost Naturwaren in 1999 (BNN study). [32, 15, 6, 4] The Sinus study found that:

  • 44% of consumers came from a liberal-technocratic environment
  • 27% came from an alternative environment
  • 6% came from a conservative environment
  • 9% belonged to a variety of backgrounds.

The same study found that 77% of the customers belong to the higher and middle social classes with higher than average disposable income, while other studies, for example the BNN study, found a higher than average educational background, but a lower than average income. This study was exclusively conducted with patrons of organic food shops, and it is possible that this may reflect that the specific clientele of these outlet types belong more to the younger, well educated but professionally not as settled segment of the population.

In a study conducted for the CMA in 1996 with updates in 1999, 74% of customers claimed that health reasons for their key influence for purchases of organic food, followed by environmental considerations (51%), higher nutritional value (29%), and better taste (20%). The same survey found that 56% of consumers were prepared to pay a price premium of more than 15%, 33% a price premium less than 15% and 11% did not want to pay any premium for organic goods.

A more comprehensive survey of the GfK, Germany’s biggest market research company, revealed that the earlier classifications of organic consumers is not valid any more. It rather appears that organic consumers display an apparently contradicting behavior. For example, food miles are given as a consideration for purchase decisions with preference for locally grown produce, but a keen interest in ethnic dishes is also displayed; the demand for best possible quality is not directly in line with the desire for low prices, and health considerations are not necessarily compatible with the drive for convenience food. "For example, it would not seem absurd for an individual consumer to have a healthy breakfast with muesli, yogurt and fruit, a fast-food lunch, and a celebratory dinner with lobster and champagne." [22]

3.3.6 Trends and Conclusions

The future development of the German organic market is certainly the most volatile of all countries described. While Germany’s overall economic situation is clearly improving, with declining unemployment rates and disposable income rising, the trade environment in Germany has some specific problems. One of them is the abundance of organic logos and certification schemes, which creates difficulties for consumers to easily recognize organic products. In recognition of this fact, the Central Marketing Association for Agriculture (CMA), a federal agency with the assignment to foster the marketing of agricultural products, in cooperation with AGÖL, has created the "Ökoprüfzeichen", a logo who’s aim is to introduce a nationwide, easily recognizable symbol for organic products. It is designed to be financed voluntarily through licensing fees, and therefore dependent on broad recognition. The inherent problem of the logo is that only AGÖL member organizations could participate in the logo, thereby excluding about 20% of German producers. In addition, the logo is not available for importers, which is different from the French AB logo, for example. The AB logo can be used for a licensing fee even by importers, and has found wide acceptance with French manufacturers and consumers alike. The narrow definition of the "Ökoprüfzeichen" logo is probably due to the internal tensions AGÖL is presently facing, and the present solution is the smallest common denominator the involved parties were able to agree upon, rather than the best solution for the industry as a whole. According to trade and scientific sources, the future of the Ökoprüfzeichen is nevertheless in jeopardy, despite its highly touted announcement at the "Grüne Woche" in February 1999 in Berlin. Most probably this is due too the aforementioned tension within AGÖL and the obvious fear of some member organizations that a countrywide available logo might devaluate their own association’s logo, as well as to a relatively low acceptance within the industry.

Another issue at this point is the degree of commitment of major supermarket chains and multiples that have entered the organic market. With the change in the consumer base, the expectations of many consumers toward organic products have changed, too. Simply put, organic products need to be treated like premium products in terms of freshness, appearance, and shelf display and product information. While there is one smaller chain of supermarkets (Tegut) that has understood this issue and has acted accordingly and therefore has reached an organic share 8% of all its foodstuff sold, most of the multiples do a fairly sloppy job in presenting, marketing and informing customers. The situation clearly needs to be addressed and mended, if growth of organic sales is to be maintained. In relation to this, it should be mentioned that there is presently fierce price competition between multiples in Germany going on. In direct connection with this development, it remains to be seen how the recent entry of Wal Mart, and its attempted takeover of Germany’s biggest retail chain, Metro, will play out.

On the other hand, there has been a strong opposition from certain quarters in the organic movement to include supermarket sales. While this opposition is certainly decreasing, it has not made for an easy and smooth partnership between the multiples and the organic industry as a whole. In effect this has led to a situation with a split retail market and a related split in the distribution system, where it is very hard to establish brands that are simultaneously sold in specialized organic shops and through the conventional retail outlets. As mentioned earlier, some manufacturers have reacted to this situation by establishing affiliates with that deal exclusively with the conventional retail outlets, like Rapunzel AG. Other manufacturers either supply the specialized organic shops or the supermarkets, but not both. This fact of course makes manufacturing and distributing more difficult and expensive. The challenge in this regard appears to be very clear: are the organic movement, the manufacturers and processors and the organic industry able to enter into long-term professional relationship with major market forces while maintaining the integrity of organic production and the ideals that come with it?

It seems apparent that further substantial growth of the organic industry necessitates augmented efforts and more sophisticated marketing strategies of the multiples in order to increase their current market share beyond 24%, which is small compared to Denmark, France and the UK. It is not immediately evident, however, how strong this commitment really is. While some of the chains do a good job in promoting and presenting organic food, in many cases the presentation of organic food is still poor and the upper management decision to go organic is not appropriately reflected in the actual stores. The same relates to the training of sales clerks: in this regard, the natural health food shops do a far better job than multiples, and education and presentation no doubt will have a major effect on organic sales.

There is another inherent weakness in the German organic industry, which has hampered growth in the past in the past and most probably will do so in the future. The organic industry association "Produzenten ökologischer Produkte" (Producers of organic products) was only able to attract 45 industry members, less than one tenth of the whole industry, and thus never grew to be a strong presence in the marketplace. As one consequence, there has never been a strong nation-wide generic promotional campaign for organic products. Unfortunately, on the association’s last board meeting in June 2000 it was decided to cease the operation of the association, thereby making it even more difficult for the organic industry to speak with one voice and promote organics in a comprehensive and coherent way.

The latest development that will certainly influence and boost organic production in general has been the first reported and confirmed case of BSE (Bovine spongiform encephalitis) in Germany in November 2000. The immediate customer response to the outbreak of BSE has lead to an unprecedented 70% drop in overall meat sales within one week. [29A] In the wake of this event, fostered by the immediately enacted EU-wide general prohibition of the use of animal residues in animal feed, industrial agriculture has come under renewed severe criticism, and the corollaries will certainly be felt in terms of

In conclusion, we see a huge opportunity in the German market, provided that the internal problems of organic agriculture movements and the organic industry as a whole will be overcome and therefore will be able to act as a strong partner in closer cooperation with the conventional supermarket chains, that also need to reconsider their commitment and marketing strategies toward organic products. Obviously, consumer demand fueled by health concerns, food scares and the genetic engineering issue is strong and, in unison with a positive overall economic outlook, bodes well for the future of the organic market in Germany.

 
 
2014 Annual Fund

Research and Promotion 2012

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