After a weak first half of the year, customers are returning to organic retailers. Because of the high prices caused by inflation, many consumers have recently been avoiding organic goods more often.
According to industry sources, demand for organic products from specialist retailers is increasing again. Because of the high prices, many consumers preferred to use conventional products last year or buy cheaper organic goods in discount stores. Now organic markets are getting fuller again, said Kathrin Jäckel, managing director of the Federal Association of Natural Foods (BNN).
“Overall, the organic specialist trade will be robust in 2023, contrary to many expectations,” says Jäckel. Demand has increased significantly again, particularly in the current second half of the year.
However, it remains to be seen whether the increasing sales figures in the second half of the year will be able to compensate for the losses in the first half of the year. So far, the industry is assuming stagnation. At best, there could be a slight increase in sales at the end of the year, it was said.
High prices have stopped the boom
In the first half of the year, sales were still significantly below the previous year’s level. According to BNN, industry revenues fell by seven percent in January alone. According to the association, many people no longer buy organic products in purely organic markets, but rather resort to cheaper organic goods in discount stores – if at all. The high prices resulting from the war in Ukraine had temporarily halted the years-long organic boom.
Since inflation has fallen more sharply in Germany, consumers have been shopping more frequently in organic stores. Since June, the industry association has consistently recorded increasing sales figures compared to the respective months of the previous year – even though the average number of items purchased and the average receipt value, i.e. the purchase amount, remain the same.
Slight increase in Agricultural areas
“Now it’s up to politicians,” continued Jäckel. “It should promote concrete measures to achieve the goal of 30 percent organic by 2030.” What is meant is the federal government’s plan to have 30 percent of agricultural land in Germany cultivated organically by the end of the decade.
Recently, the proportion of organically managed fields and meadows had continued to rise, but only slightly to 11.2 percent as of the end of 2022. Currently, 14.2 percent of all agricultural businesses fall under organic farming. Sales in 2022 were 15.3 billion euros.