The German organic food market is recovering after a brief decline during inflation. However, the industry warns against planned savings measures by the government in the area of subsidies.
The market for organic food in Germany appears to be recovering after temporary losses during the period of high inflation, according to a current market report from the German Farmers’ Association. “Eco sales will consolidate in 2023,” it says.
By October, sales of fresh organic products had grown by 2.8 percent, according to data from market research company GfK. The range of packaged goods is also likely to have been in positive territory. “German organic food sales would grow towards 16 billion euros in 2023.” The large retail chains and the price play a more important role.
Positive signals despite previous decline
After a minus of 3.5 percent in 2022 according to figures from the Federal Organic Food Industry, there are optimistic prospects for 2024. “Growing sales can be expected for 2024,” says the market report at the turn of the year. All major food retail chains have made a name for themselves with organic ranges.
Politicians are also focusing on a faster expansion of organic agriculture – and this depends on continued growing demand. The coalition’s stated goal is to expand the organic share to 30 percent of the total agricultural area by 2030. Most recently it had risen further – but only slightly to 11.2 percent as of the end of 2022. 14.2 percent of all farms now work organically.
Organic market defies setback in 2022
In the first year of the corona pandemic in 2020, when many people cooked at home, sales jumped by 22 percent to 15 billion euros and grew even further to 15.9 billion euros in 2021. In 2022 there was an unusual setback. Despite the return of many people to restaurants and canteens, where there is usually no organic offering, organic sales were still “largely” able to maintain sales, explained the Federation of Organic Food Industry.
However, organic products, which usually cost a little more, were also affected by a reluctance to buy more expensive foods in times of high inflation – with a strong trend towards buying in supermarkets, while specialist shops were left behind. The discounters were once again the “eco sales winners,” according to the farmers’ association report. However, the Federal Association of Natural Foods Natural Products recently reported that the initially low demand increased in the second half of 2023. Since June there have been consistently higher sales figures than in the same month last year.
Özdemir’s strategy to stimulate organic sales
Agriculture Minister Cem Özdemir (Greens) has presented a strategy for his department that is intended to boost organic sales. The focus is, for example, on increased organic research in order to increase yields from organic farming. Consumers should also be informed more precisely about organic benefits for environmental and animal protection.
One lever should be more organic food in canteens, cafeterias and restaurants. In order to make the organic content of kitchens easier to recognize, providers can voluntarily use a logo in the medal colors. It shows the organic share of the total value of the goods purchased and ranges from gold (90-100 percent organic) to silver (50-89 percent) to bronze (20-49 percent). Some companies have already started using these logos.
According to the ministry, the logos can be attached if companies are certified – the company’s own canteen in Bonn and that of the Ministry of Labor in Berlin already have a logo in bronze.
Organic industry warns against planned cost-cutting measures
In order to be more organic, it is also important that more farms take part. Özdemir emphasized when he presented his strategy in mid-November: “Nobody has to switch to organic.” It is an option.
However, the mood in the entire industry has been at a low point since the government coalition’s plans were announced to abolish two benefits in order to save money: the regulations on agricultural diesel and the vehicle tax exemption for agricultural vehicles. Özdemir kept his distance. However, the farmers’ association warns in the market report that the subdued economic prospects threaten to worsen further. There were also sharp protests from organic producers.