Distribution channels
Distribution Channels
There are four main distribution channels for imports of organic food into Scandinavia – retail groups, importing wholesalers, fruit and vegetable importers, and a few large food manufacturers.
The Nordic countries have a very high level of concentration within the food sector. This is shown by the fact that the combined market share for the top four retailers within the general grocery store sector, which includes supermarkets and neighbourhood stores but excludes small convenience and food speciality stores, is well over 90 percent in all four countries.
Each retail group has built up a close integration of purchasing, importing, wholesaling, distribution, and retailing. All groups are also more or less engaged in joint Scandinavian and European buying groups.
The retail groups are also among the leading importers of food products. Organic products are either imported by the groups themselves, or through specialised organic importers. A noteworthy trend is that the large supermarket groups have started to market organic food products under their own private labels, which means that they also import these products directly from the producer.
Leading Companies (Norway)
As stated in the introduction, the market is dominated by few large players. In fact, there are only three dominant players in the Norwegian market: Coop Norden, Reitangruppen and Norges Gruppen.
Coop Norden oversees operations of thousands of hypermarkets, supermarkets and discount stores across the Nordic region. It is a limited company owned by three co- operative societies; Sweden's Kooperativa Forbundet, FBD Denmark and Coop NKL Norway, 42%, 38% and 20% respectively. Coop Norge has a total of 208 cooperatives that run 1.300 stores through Norway. The company provides food products in variety of stores including Coop Marked, Coop Mega, Coop Obs, Bygg and Coop Prix.
Reitangruppen Is a Norwegian wholesaler and retail franchiser operating and operates around 1979 stores in the country. The company provides food products in variety of stores including 7 -Eleven, HydroTexaco, Easy24, Narvesen, Spaceworld and Pressbyrån as well as REMA 1000, a chain of discount supermarkets in Norway, Denmark and Sweden.
Norges Gruppen Is Norway’s largest grocery retailer in terms of numbers with 1.975 stores across the country. The company provides food products in variety of stores including Meny (large supermarkets), KIWI (discount stores), and SPAR formats. Norges Gruppen also operates in other retail markets through the regional supermarket chain Ultra, as well as convenience stores (Fresh, MIX).
Health Stores
Sunkost is Norway largest health food chains. Sunkost carries a wide selection of products in categories such as dietary supplements, natural skin care, exercise, food and drink.
Life is Norway and Scandinavia's leading marketplace for health food products. They stock a large range of quality products including, ecological food, tea and skin care products.
Other organic companies (in Norway)
The brand Helios present a wide range of organic and biodynamic grown food and drink. They started as Norway's first sales channel for organic foods. Organic foods were grown in Norway since 1931 and in addition to the Norwegian goods were also imported goods in order to provide a greater number of lines. The trademark Helios is currently owned Alma Norway AS, one of Norway's leading players in ecology, allergies and lifestyle products.
Soma Nordic AS was founded in 1997 by the founders Lars Ranes and Kevin Charlton Bækkevold. They are a large company, supplying health food stores, therapists and gyms with quality products in both Norway and Sweden. Soma Nordic ice ranked amongst the top 10 suppliers in the Health Food Trade Industry in Norway.
Other Scandinavian Leading Companies
Coop Danmark: comprises 1,200 food stores and is Denmark‟s leading food retailer with a market share of 37 percent. Within the organic market, the share is even higher, about 46 percent. The organic food range consists of over 1,700 items, of which about 200 carries the Coop organic label Änglamark. During 2009, 7.4 percent of all food sales were organic, making Coop Danmark probably the most successful organic retailer in Europe.
Coop Sverige : runs 800 food stores and is Sweden‟s second largest food retailer with a market share of 19 percent. However, regarding organic food, the market share is substantially higher, well over 30 percent. During 2009, organic sales increased about 15 percent. Organic foods currently account for almost 6 percent of the groups total food sales, making the group one of the leading sellers of certified organic foods within the European supermarket trade. But the aim is to reach a 15 percent market share within the next few years. Another aim is that in the future, all Coops' sales of fresh fruit and vegetables, fluid milk and eggs should be organic. Coop Sweden‟s organic product range covers over 1,000 organic items, of which 300 bear the Änglamark label.
The Coop group also includes the S Group, Finland‟s leading food retailer, with a market share of 42 percent.
Together these four consumer-owned cooperatives have a 30 percent market share within the Nordic general grocery store sector.
The Coop Group has formed a joint company, Coop Trading, based in Copenhagen, Denmark. The task is to develop and buy branded products and to handle joint purchases of private labels.
Coop Trading also handles international buying of organic food, including Coop‟s own organic products, which consist of about 1,000 items. About 300 products are marketed under Coop‟s own brand for environmental products, Änglamark. Even though the Änglamark products are not priced at a higher level than equivalent conventional products, the policy is that they have to be as profitable as other brands.
Dansk Supermarked (DS), which is part of the A.P. Møller - Maersk Group, Denmark‟s largest corporation, has a market share of 31 percent within the Danish grocery sector. DS also runs food stores in Sweden, Germany and Poland.
DS, which account for about 25 percent of the Danish organic sales, has its own buying and importing facilities, DS Indkøb. However, the company does not import organic products directly from the producers, domestic or foreign, but instead purchases organic products through Danish importing wholesalers.
SuperGros, which is part of Denmark‟s leading wholesaler, the Dagrofa group, is the largest supplier of foodstuffs for independent grocery stores in Denmark. The market share for the retail chains supplied by SuperGros can be estimated at about 25 percent. However, within the organic market, the market share can be estimated at approx. 15 percent. In addition, Dagrofa is the leading supplier of groceries to the convenience and food service sectors. SuperGros operates its own importing facilities for groceries and produce as well.
Axfood, Sweden‟s third largest food retailer (market share 15%), is a wholesale and retail group with about 800 stores. The organic product range inceased to 1,200 articles in 2009, of which 70 are marketed the Garant label, Axfoods own label for organic food. During 2009 organic sales increased 30 percent.
Axfood is a member of the Scandinavian buying group United Nordic based in Sweden, which also handles overseas buying for SuperGros/Dagrofa (Denmark), Tuko Logistics (Finland) and Unil/NorgesGroup (Norway).
Bergendahls is Sweden‟s fourth largest food retailer (share 6%). Bergendahls is a wholesale and retail group comprising about 100 stores, both large hypermarkets and independent supermarkets. Even though sales increased 20 percent in 2009, the organic range is still rather limited.
Specialised Organic Importers and Retailers
Besides the retail groups, importing wholesalers play a rather significant role for the importation of food products. It should be noted, however, that this channel also comprise several companies solely or predominantly engaged in organic items. Here follows a presentation of some of the most important ones of the organic suppliers.
Urtekram/Nutana, the oldest and best known organic distributor in Denmark, distributes more than 3,000 different food articles in Denmark and in the surrounding Scandinavian countries.
Biodania, of Denmark, deals exclusively in organics as a wholesaler, distributor and importer of fresh fruit and vegetables.
Bio Trading, is an important distributor and importer in Denmark for a wide range of organic raw materials and food ingredients.
SBP (Stiftelsen Biodynamiska Produkter), based in Sweden, imports organic products, both fresh and packaged foods, from all over the world. The company acts as an importer both for the large retail groups and for other wholesalers. In addition, BP sells directly to supermarkets and health food stores, as well as to the food service sector and the food-manufacturing sector. BP has a large range of fresh, frozen and packaged articles, of which a substantial part is imported. The total range consists of more than 1,000 different organic products.
Kung Markatta, which is one of Sweden‟s largest importers of packaged organic foods, acts both as a wholesaler and an importer. The company sells 800 articles (of which some are marketed under their own label). Also Fair Trade-labelled products are marketed. About 50 percent of sales go to the health food sector and 30 percent to supermarkets. Other customers are restaurants and food manufacturers.
Other importers on the Swedish market are Sackéus, Hedenborg, Biofood-Biolivs and Risenta.
Øko-kompaniet, with its Solgard brand, is one of Norway‟s leading importers and wholesaler of organic fruit and vegetables
ØkologiPartner, Norway, a specialised organic wholesaler for the foodservice sector
Other players on the market for organic food are: Helsam, Denmark, a health-food store chain. Matas, a Danish drugstore chain which carries a range of, mainly, dry organic food products, such as dried fruits, nuts, beans, seeds, kernels, pasta, cereals etc.
Life, Naturapoteket, Hälsokraft and Hälsokost för Alla; four health food chains in Sweden, with a limited range of organic items. The health food stores generally buy organic items through the specialised importers of organic products.