Food: Organic is no longer booming

Vo not long ago it would probably have been an unthinkable step: the discounter Aldi will sell organic food from the Naturland cultivation association in the future. “The partnership is an important step in the further development of the comprehensive organic range,” says the discounter.

So far, consumers can only buy EU organic goods in the branches, but the standards of the associations are considered to be significantly higher. At Naturland, for example, 50 percent of the feed must come from the respective farm, at EU-Bio it is 20 percent, which must be produced either by the farm or in the region.

Competitor already decided before Aldi Lidl entered into such a cooperation with the Bioland cultivation association in 2019 – and thus caused a stir in the industry. Because that a cultivation association would work together with a discounter was considered unthinkable at the time. So the discounters in particular are vying for the favor of customers with cut-throat prices.

30 percent by 2030

Even today, such a step does not seem to please everyone: representatives from agriculture, trade and politics are meeting at the Green Week, which is currently taking place in Berlin. You also talk about the challenges of the industry. This year there are particularly many: The big issues here are also the high costs on the energy, raw materials and fertilizer markets, which are putting pressure on the industry, the sharp rise in prices in the food trade and the changed consumer behavior of Germans. Because if everything gets more expensive, more and more consumers want to save – also when shopping for groceries: Instead of looking for particularly high-quality products in supermarkets or specialist shops, as was the case during the peak phase of the corona pandemic Food Keeping an eye out is currently focused on one thing in particular: the price.

The suppliers and producers of organic food are also noticing this: “At the moment, the considerations of switching to organic farming are cautious,” said Farmer President Joachim Rukwied of the German Press Agency. Because the organic markets, health food stores and other specialist shops that sell organic products would achieve significantly lower sales. “The trend for organic is currently clearly in the discount area.” And so the goal of the federal government to achieve an organic area share of 30 percent by 2030 seems to be difficult for Rukwied and other representatives of the industry to achieve.

The past few weeks have shown that specialist retailers in particular are under pressure: the organic market chain Basic filed for bankruptcy, before that the ecological retailer Superbiomarkt reported it. And even the conventional supermarket Tegut, which does not only focus on organic food, reports a slight decline of 2 percent in this segment compared to 2021.

According to the market report by the farmers’ association, the entire German organic market shrank for the first time in its history: from January to October 2022, sales of organic food fell by 4.1 percent compared to the same period last year. In addition, 5.7 percent less organic food was sold. This means that the forecast sales for the full year at 15 billion euros were still above the level of 2019, but were still declining.

The Naturland cultivation association also knows such numbers. And that’s why the cooperation with Aldi is right. “The partnership offers us a new sales channel to compensate for the consumer’s reluctance to buy,” says a spokesman on the phone. In any case, there are already association goods in discount stores, but these are sold without the Naturland seal. “Now our goods are visible.” He also noticed that organic products have come under pressure, especially in specialist shops. If consumers go to the discounter, then the organic business should be particularly present there. The spokesman cannot understand criticism that the goods would be sold there: “Aldi has a good reputation among producers because it pays better than other retailers.”

Above all, one thing is important: “The goal of the federal government is 30 percent organic. Then this share must also be visible in retail.” And retail also means discount.