Overview

The temperate climate in Scandinavia prevents or strongly limits the production of many food items, especially regarding items such as coffee, tea, cocoa, and spices, as well as most fruits, and certain vegetables and cereals. This means that in order to further increase the market for organic food, more suppliers are needed from other countries.

The Scandinavian market for organic food has for many years been one of the most expanding in Europe. During 2009, sales of organic food reached € 1840 million, an increase of about 6.4 percent, compared to the preceding year. Compared to 2007, however, the market has increased substantially more, or 36 percent. The rather modest increase in 2009 is in part due to the recession that has hit the world economy, and in part to shortage of supplies.

 

Organic products are in Scandinavia predominantly sold through large supermarket chains, and to lesser degree through specialised organic stores. Most of the larger supermarkets therefore have a relatively wide range of organic items in their selection. Furthermore, several Scandinavian supermarket chains, especially in Denmark and Sweden, are among the leading distributors of organic food in Europe.

This sector is characterized by a very high degree of concentration, both regarding number of stores and number of companies. This is shown by the fact that two retailing groups together account for about half the Scandinavian retail market for groceries. Furthermore, the five largest have a market share of over 90 percent.

These large retailing groups have integrated purchasing, logistics and retailing operations. Therefore, imports of groceries, whether organic or not, are as a rule handled by the groups themselves.

 

The convenience store sector, which consists of small convenience shops, kiosks, and food departments in petrol stations, account for a little less than 10 percent of the total food retailing sector. As a rule, the assortment of organic food is rather limited.

Speciality stores are either specialized in selling a wide variety of a single line, for example meat, fish, bread, liquor, fruit, or market halls. This segment is relatively small in Scandinavia, just accounting for a few percent of the total food market. There are also specialised health food stores, but they carry a relatively small assortment of organic food items.

The main reason is that they generally concentrate on nutritional products, supplements and vitamins.

In recent years, several specialised organic food stores have also been established, especially in university towns and larger cities. Their share of the organic market is still low.

 

Scandinavia has one of Europe‟s most interesting markets for organic food. Not only does Scandinavia have a very high per capita consumption of organic food, when compared to other countries in Europe, but the organic market has experienced a tremendous growth during the last decade. Even though a slowdown was experienced in 2009, mainly due to the worldwide recession and a shortage of supplies, the organic market is expected to show strong growth also in the future.

The positive market development means that the organic food range includes a wide array of different food products. In fact organic food now covers practically every single food group within the retail trade. But the market is far from saturated, as there is a growing demand for more sophisticated products, such as convenience food, tropical fruits, ethnic food, snacks, coffee, fruit juice mixes and refined fruit beverages.

Furthermore, consumers are more and more concerned about production conditions, of environmental damage caused by intensive production methods in plantations and the use of agrochemicals and pesticides. Another concern is how a product is transported and handled, from the production site to the supermarket. This has led to an increased public demand for support of organic agricultural methods.

With this in mind, it is rather obvious that the present market share for organic food - about 4-5 percent – will be substantially higher in the years to come. But to reach a higher market share, more supplies are needed. However, importers are not only pledging for more supplies, but also of products of good quality, with low fat content, good nutritional value and easy to prepare.

Imports have taken a large share of the market supply in recent years, about 30-40 percent, since local producers and manufacturers have not been able to keep up with the increased demand. Furthermore, for a large number of agricultural products, imports complement the short growing season, when local harvest is not enough to satisfy the market and when importing is more favourable. Fruits, vegetables, sugar, grains, and coffee constitute the major organic import articles. Other large import items are meat, snacks, spices and beverages.

Even if other EU-countries are the dominant trading partners, suppliers in Central and South America are also prominent, especially regarding fresh produce, coffee, cane sugar and meat. Exporters in Asia and Africa have in recent years also been able to penetrate the Scandinavian market for a number of products, such as fresh fruit, coffee and cocoa. It should be noticed, though, that a relatively large number of products originating in developing countries, to a large degree are imported via either Germany or the Netherlands.

Given the rapid development of the organic market, the current insufficient supply, and the large import share, food producers in developing countries should have good opportunities to export organic items to the Scandinavian countries.

 

Denmark

Denmark is one of the leading countries in the world when it comes to the consumption of organic food. In fact, Denmark currently has the highest per capita consumption of organic food products in Europe. A major reason is the high availability of organic products in both food stores and restaurants. For this reason, Denmark was chosen as the “the country of the Year at BioFach 2009”, the most important trade fair in the world for organic food (see also chapter 7.7 under “Visiting Trade Fairs”).

Consumption of organic food has seen a significant increase during the last decade, As a result, organic food covers practically every single product group within the food market.

During 2009, total sales reached about € 840 million in sales value, about 6 percent more than the year before. The relatively low increase in 2009, is mainly attributed to the economic recession and to price cuts, especially within the dairy sector.

Of the total, the retail trade accounted for € 657 million (78 percent) and sales to the foodservice sector for € 183 million (22 percent).

When measured by volume, the market rose almost 10 percent during 2009, reaching 256,000 tonnes. The relatively large increase in volume was partly due to price cuts within several products groups, especially for dairy and cereal products.

 

Sweden

The Swedish market for organic food was estimated to about € 865 million by market value in 2009, which was about 20 percent higher than the preceding year. This means that Sweden that year had Europe‟s sixth largest market for organic foods.

The total food market amounted to about € 20,000 million in 2009, which was 2.1 percent higher than the preceding year. Thus, the organic food market gained a substantial market share increase, from 3.0 to 4.3 percent of the total food market.

Of the total organic market, sales within the retail sector amounted to about € 724 million (80% share) and sales to the foodservice sector to about € 141 million (20%).   From 2007 to 2010 the organic market has increased 63 percent.

 

Norway

The Norwegian market for organic food is still in its infantry. In 2009, the Norwegian market share for organic food amounted to 1.2 percent, which was about the same as the preceding year.

In 2009, the total organic market reached € 125 million, about 8 percent more than the preceding year and 23 percent more than in 2007. Of the total, the retail trade accounted for about 85 percent and the foodservice sector for 15 percent.

Retail sales amounted to approx. € 114 million in 2009, an increase of 11 percent compared to the year before. Dairy products accounted for about 32 percent of the total, while the share for fruit and vegetables was 23 percent and cereal products 16 percent.

In local Norwegian currency (NOK), the organic market has increased 44 percent in 2007, 19 percent in 2008 and 11 percent in 2009. However, when measured by volume, the development has been more modest with an 19 percent increase in 2007 and 6 percent in 2008, and a 5 percent decrease in 2009.

Even though the present Norwegian market for organic food is rather limited, a substantial increase is foreseen in the near future. According to a government statement in 2009, called Soria Moria II, by year 2020, 15 percent of the Norwegian food production and consumption should be organic.