establishing ROOTS in the German organic food market

Transcription

1 establishing ROOTS in the German organic food market 2012

2 Foreword Mette Gjerskov (Photo: Rune Johansen) The organic market is growing worldwide with fast paces. The German market for or-ganic food and beverages was in 2010 the second largest organic market in the world. It is a fast growing market estimated to about 6.59 billion euros in 2011, growing by 9 per cent a year, encompassing 3.7 per cent of the entire food market in Germany in This is an opportunity for organic food companies, as it has never been seen before! It is my aspiration that this window of opportunity will be opened by providing high quality Danish organic products for a fast growing organic market. Many Danish companies are already active in the field of foreign trade, participating at international fairs and export promotions. Danish companies have the advantage of a well-established business platform and many are already acting with competence and skill on the German market greatly supported by Bio aus Dänemark. 2

3 The organic sector in Denmark has a very high credibility with a large degree of self-regulation. Our strict state-run control system from farm to fork is not only securing high credibility of the organic products, but also contributing to the safety of food products, since the organic inspection is part of the general food inspection. As a result of this our Danish consumers have a very high confidence and trust in organic products. Well-established public-private cooperation provides a prolific environment for new incentives motivated and supported by the Danish Government. Support of product in-novation and of organic exports is part of the Organic Action Plan Export initia-tives in line with our effort on enhancing a sustainable development in Denmark the greening of our economy are highly appreciated. The German market for organic food is a very challenging market, demanding high quality and storytelling organic food products as well as food products adapted to Ger-man tastes and customs. May the number of food companies taking up this challenge grow, and may they suc-ceed in their efforts to enter this huge and fast growing market! Mette Gjerskov Minister for Food, Agriculture and Fisheries 3

4 establishing ROOTS in the German organic foo Status Quo: German Organic Food Market 1) Organic sales and sales development in Germany 2) German organic production, export and main focus import 3) Consumers, organic marketing and market trends Focus: Organic Food Trade in Germany 4) Organic market structure 5) Food channels and their importance for organic sales a. Turnover development of organic food in the different channels b. The main players in the organic market over all channels c. Well known brands and labels in the organic market d. Organic food categories and their importance for the different channels e. A close look at the different channels for organic food (conventional followed by organic retail and wholesale) 6) Trade margins and pricing in the organic and conventional trade 4

5 d market establishing ROOTS in the German organic food market establishing ROOTS in the German organic food market 7) Hints for a successful import a. How to find and get in touch with your customers b. Special product quality c. Labelling, certification and quality assurance d. Rules and customs in German the food trade 8) Food Service Appendix Short historic review Schedule of fairs Blanks for product list, price list, logistic data Lists of a. Main conventional food discounters b. Conventional food wholesale and supermarket chains c. Organic wholesalers d. Organic supermarket chains 5

6 Status Quo: German Organic Food Market Organic sales and sales development in Germany With sales of about 7 billion Euros in 2012, the German market is (still) the largest organic market in Europe. The sales increase of 9% in 2011 covers the total organic sales 15 years ago. Looking at the market share and the average sales per person, it seems that there is further market potential. In 2011, the market share for organic food in Germany is the fourth largest in Europe with roughly 3.7% of total food sales (the increase mainly due to increased prices); the leading countries are Denmark with nearly 7.2% and Austria with 6% and Switzerland with about 5.7%. With average annual sales per person (2010) of 74 Euros, the Germans spend 2-3 times more money on organic products than the average European, but much less than consumers in Denmark, Switzerland and Austria (see figure). For this comparison, country-based price differences are not considered. 6

7 Sales in m Euro Germany France UK Italy Comparison of Organic Sales in Europe 2010 Switzerland Austria Spain (2009) Sweden Denmark The Netherlands Belgium Sales in m Euro Sales per person in Euro Average sales per person in Europe: 28 Euro/year Norway Ireland Finland Czech Republic (2009) Russia (2009) Poland Greece (2006) Portugal Sales per person in Euro Source: Wirthgen, based on data from AMI, Fibl, BÖLW 7

8 For the past years, until 2008, the organic market was growing quickly; between 2004 and 2008 the sales growth rate was in two-digits. Even so, in 2008 the organic market was still increasing by about 10 %. This boom stopped abruptly in The financial crisis has hit the organic market, even though the whole food market decreased even more. The organic market sales in 2009 more or less stagnated (slightly reduced) with about 5.8 billion Euros. But, while the prices fell, the total organic market volume still increased. However in 2009 and 2010, with an average growth rate of 2-3 %, this is a significantly lower level than in the previous years. On average, the volume of the organic market grew about 10 % annually the past 7 years ( ). The organic market has picked up again since 2010 (sales growth +4 %), first mainly driven by the organic retail (2010) and than by food scandals and price increases in 2011 (+9%) and 2012 (+4-5%). The market sales of organic products exceeded 6 billion Euros in 2010 and will exceed 7 billion Euros in For more details concerning the market shares in the different trade channels, see chapter Organic food trade. In the near future, market experts expect a moderately growing organic market. Since the organic market left the niche and now reaches many opportunity buyers, it is more sensitive towards financial changes than it was in its pioneering phase with only convinced, intensive organic buyers. Sales development in the German organic food market Yearly growth + 13% + 11% + 18% + 15% +10% - 1% + 4% + 9% + 4-5% Year * Organic sales (in bn ) * Footnote: Data from 2010 onwards are based on a new data sourcing method, thus not directly comparable with the others. *estimates Source: Wirthgen, based on data of AMI, Agromilagro, BMELV 8

9 Product categories: The main products in the field of organic food sales are clearly dairy products (incl. cheese), followed by vegetables (mainly carrots & tomatoes), bread and bakery products as well as fruits (mainly bananas). In 2011, these product categories reached market shares of about 10 % and more of the total food sales in these categories. Baby food, eggs, alcoholic drinks, sweets and fresh meat (incl. poultry) reached market shares of about 4-5 %. Market shares (sales) 2011 and growth rates of organic food categories 2011 vs Market share in % % Growth in sales Bread & bakery products Vegetables Fruits Dairy products (white) Cheese Baby food Eggs Sweets Alcoholic drinks Meat (fresh incl. poultry) Soft drinks Hot drinks Edible oils, butter Potatoes Spreads Cereals Frozen food Rest of dry food Meat substitutes Fixings Wirthgen based on AMI, BÖLW,

10 Often, the relatively high sales or growth rates of certain organic products are due to the listing at conventional retailers, especially at discounters. While some products stabilized their market shares over the past years, others show strong growth rates. From 2010 to 2011, sales of organic fresh meat showed the strongest increase of about 40 % (listed at Aldi & Lidl since 2009), followed by sales of eggs of about 32 %, hot drinks and meat substitutes about 20 %. Moreover, edibles oils, butter, sweets, dairy products, alcoholic drinks and spreads present growth rates between 10 %-15 %. The first data for 2012 present organic meat & sausages, milk mix drinks, edible oils and yoghurt as strong sales carriers ,5 Meat 9,5 7,7 Sausages Changes in Sales and Volume of selected Food Categories 2012 vs 2011 Quarters I-III 26,4 Poultry 39,8-5,5 Cheese -2 Volume changes in % Sales changes in % 3,1 3,6 Eggs -1,8 0,3 Fruits 2 2,1 Vegetables 5,1 Potatoes -6,9-3,3-6,2 Bread 3 2,8 Milk 21,6 19,2 Milk mix drinks 4,5 6,8 Yoghurt 1,8 1,4 0,2 0,3 "Quark" Butter 19 19,1 Edible oils Wirthgen based on AMI 2012 Some product categories are still not clearly differentiated compared to the conventional sector. Thus, there might be market potential. This is valid for convenience, frozen and functional food, as well as for meat and sausages. Apparently, only simple and intelligent organic convenience food seems to be interesting for consumers. Organic consumers are not the typical convenience shoppers. Furthermore, there is still market potential for basic organic food items like muesli, oat flakes and cane sugar as well as for products like organic cheese, wine, sparkling wine, soft beverages, yoghurt, sweets and organic cookies and pastries. 10

11 Organic production, export and main focus import Organic agriculture has a long tradition in Germany. Nevertheless, the demand is significantly beyond the supply and still rising faster than the supply. Even though Germany has the second largest sales of organic food worldwide, and the largest in Europe, its own organic production is with more than 1m hectares of organic production area in 2011 relatively small, but still growing, ranking eighth worldwide and third in Europe. It is therefore no wonder that Germany is the largest importer of organic food in the world. Even though the production in Germany has shown a continuous growth (except in the eighties), the demand has increased faster than the supply. However, Germany, known as a strong export country, does export some organic products, estimated about 5-10 % of the production. The main export products are: apples to the UK, world-wide distribution of muesli with a high market share, potato products e.g. chips, baby food and frozen organic food as well as beef, pork and dairy products. Germany s import quota show an increasing trend and depend strongly on the product ranging from % (see figure). It varies from year to year depending on own harvests. The German organic market is no longer imaginable without imported organic food. Referring to a research study from 2010/11, the main organic food products imported to Germany are oilseeds, followed by fruits & nuts and vegetables. Less than 30 % import quota show potatoes, pork, eggs, milk and cereals. Some products (potatoes, dairy food, meat) show imports although Germany shows a production surplus and own exports. This is due to special product qualities, prices and marketing. Apparently, poultry is the only product where Germany shows a deficit and Denmark a surplus. 11

12 More and more organic food products come from neighbouring EU countries, but also from countries outside the EU, the so-called third countries. In this context, more and more market experts stress the necessity to look at it as a European market and no longer as a national one. German organic import quota and main importers for selected products in 2010 Product/ Product group Import quota Main import countries Oil seeds 76% China, Brazil, Argentina, India, Rumania, Russia, Kazakhstan, Hungary Fruits: Bananas Apples Vegetables: 100% 50% Bananas: Columbia, Ecuador, Dominican Republic Apples: Italy, Austria, Argentina, New Zealand Peppers 91% Spain, The Netherlands, Israel Tomatoes 82% Spain, The Netherlands, Italy, Israel Cucumbers 51% Spain, The Netherlands, Bulgaria Carrots 48% The Netherlands, Israel, Italy Onions 35% The Netherlands, Argentina, Egypt Strawberries 33% Spain, Italy Potatoes 28% Austria, Israel, Egypt, The Netherlands Pork 22% The Netherlands, Austria, Denmark, Italy Eggs 20% The Netherlands, Italy Cereals 15% Italy, Slovakia, Rumania, Hungary, Russia, Austria, India, Pakistan, Finland, Sweden, Denmark, Lithuania, Latvia Milk 15% Denmark, Austria Source: BÖLW, AMI, FIBL, Agromilagro,

13 For the main importers of organic food to the German market, as well as other general hints for a successful import, see the chapter later in this handbook. Imported products pros and cons: Looking at the main imported products, it is evident that Germany primarily imports products which cannot be produced in Germany. But that is no longer the whole story people can now often choose between several domestic brands and products of foreign origin. There are some more reasons for, but also some against, imported products: Pros: This is an important factor, especially for German discounters and the conventional trade, but also for many consumers. The relatively cheap supply is not seen uncritically as it causes price pressure for the German farmers and the traditional organic trade. The latter, if possible, usually avoids imported products. Germany imports many products that transport a foreign culture and lifestyle to Germany, for example, as reminder of a holiday: Italian pasta, Spanish sausage, dairy products from Holland, Denmark or France etc.. Sometimes, countries are also well known by consumers and traders for producing products of a particularly high quality in some categories, for example, Switzerland for chocolate; Spain and Italy for ham/gammon; France, Switzerland, Denmark and Austria for cheese. That should be communicated as well. 13

14 This is supported by the openness of consumers towards new food experiences, new tastes and innovative concepts, for example, a new concept of nutrition like smoothies from the US. Cons: Sometimes, linguistic or cultural differences make it difficult for German traders to deal with exporters or foreign suppliers. The suppliers from abroad need to overcome these possible difficulties; in particular, they should inform people about local habits and customs. (Please see chapter: Hints for a successful import) Some consumers and traders simply distrust the foreign control systems for organic food. They are not sure if the imported food, which claims to be organic, really is organically produced. In addition to that, some traders regard the product quality and safeness of foreign organic food as being lower than that of domestic food. Food checks often discover pesticide residues in imported organic food. This applies all the more to organic products from third countries, since there the EU legislation (EWG 2091/92) does not require a 1:1 implementation of the EU rules. In Germany, traceability has been one of the major keywords in the food market for the past 10 years. This is due to several food scandals. Thus, a certain section of consumers and traders want to know where the food comes from, and request a transparent food chain. This is also a question of quality assurance and responsibility. In this 14

15 context, in 2002, the QS (quality and safeness) label was implemented in the German food market including all steps of the food chain and several products. By now, at least for meat products, the QS label is a must. Over the last few years, the QS system has gained international importance. Mainly in order to support the domestic or regional/local (organic) agriculture, consumers as well as traditional organic wholesales and retailers prefer domestic and increasingly more regional/local food. Regional procurement is also increasingly being used as a sales argument to distinguish from more anonymous organic and conventional supermarket chains. This also applies to some conventional supermarkets that, on the other hand, want to satisfy the consumer demand. Some people s argument is based on less transport kilometres (so-called food miles, which is often not the case), and others just prefer regional food for emotional reasons and for freshness. The preference for regional products is one major trend in the German food market in general, and the organic market in particular. The discounter Netto (Edeka), for example, offers milk produced by farmers in the region, promoting Ein Herz für Erzeuger with 10 cents more for the local farmers. Some people just wonder why they should choose a foreign food product if they can choose among several domestic brands. Generally, the high import quota of organic food (15-50% for most in Germany produced products) shows the acceptance amongst the German consumers. An imported product can have the same opportunities on the German food market as a domestic product. It often simply depends on price, quality, labelling, aesthetics and comprehensible communication arguments. The better the enrichment of the German food menu by foreign products is communicated, the higher the chances of success on the German market. 15

16 Consumers, organic marketing and market trends Consumers of organic food: The study European Consumption Barometer 2010 indicates that the financial crisis has, for the foreseeable future, caused consumers to focus more on price, but also on quality, as well as on environmental and social aspects. The financial and climatic crisis might support the demand for organic food in Germany by strengthening the motives of organic buyers. People want to live more healthy lives and consume sustainable products; they also want to support a fair and, partly, regional economy, independent of worldwide trade, the chemical industry and genetic modification. In this context, the so-called trendy consumer cluster, the LOHAS (lifestyle of health and sustainability), has recently appeared on the German market as a group with increasing organic purchase behaviour. A new trend study (Otto Group, 2012) shows that ethic consumption is moving from being a niche to the mass consumers. The only organic product that until now has reached the mass consumers is Bionade. But, due to a 30 % price increase in 2008 and the investment of Radeberger (Oetker), a new owner with distribution at discounters, Bionade has not only lost sales over the past years, but also reputation and credibility on the organic scene. This has resulted in chances for new competitors with increased sales (up to 20 % of its bio-limos). In 2012, Lammsbräu and Voelkel, sold more bio-limos at organic retailers than Radeberger; they moved ahead of Bionade with its trendy Biolimos Now and Bio Zisch. In 2009, the share of the German consumers total food purchases that were organic, accounted for about 3.2 %. Consumer studies state that % of the consumers buy organic food. This figure sounds large, but only about 3 % of the German consumers count as the so-called intensive buyers which alone contribute 16

17 roughly 40 % of the total spending on organic food! This group spends on average of less than half of its food budget on organic food (2011) and mainly comprises the traditional customers of the organic retailers. There is another 20 % who often buy organic food. But the majority of consumers only sometimes, or even coincidently, purchase organic products. These rather new organic consumers, as well as some parts of the 20 % who often buy organic food, purchase organic products mainly at the conventional trade stores (60% at discounters), attracted by relatively cheap offers. Market potential can be seen in all groups. The hope is still that the rather new organic consumers, who only sometimes buy organic food, turn into regular organic consumers; and, on the other hand, that the intensive buyers expand their organic purchase driven by extended organic product assortments at organic retailers and improved tastes and marketing of organic food. A current consumer study (Otto Group, 2011) indicates that the willingness to pay for organic food increased in all consumer groups. Nevertheless, the price still seems to be the main barrier (besides availability and taste!) to a stronger purchase of organic food. This is surely valid for the main part of price sensitive organic consumers buying at conventional retailers (~70% of the consumers) especially discounters (~60%), who are not only the consumers with low income! There are probably also about 1/3 of the consumers who really cannot afford organic food due to the relative high price. In contrast to that, a recent study at the University of Kassel (Hamm) points out that the price barrier might sometimes be overrated and that the willingness to pay for organic food sometimes is underestimated. This applies to consumers usually buying premium food. The reason is that people believe that organic food is always more expensive than conventional food. But this is only right when comparing average prices of organic food and with conventional food in general while the price range of conventional food is far wider than that of organic food. Considering that organic products are premium products, the price difference is no longer that high and sometimes insignificant. Occasionally, conventional brands are even more expensive than the organic alternatives. 17

18 Organic marketing and market trends: Today, it is no longer enough to simply produce bio products and sell them with the sales argument bio. The consumers are uncertain, more critical and more sophisticated. They demand authentic and credible bio products with added value. The credibility of the company and the product is the essential basis for the whole marketing concept! The added value should refer to current marketing trends favouring organic food. The sales arguments should be bio+healthy, bio+tasty and bio+fair (sustainable, ethical, animal welfare) good for human beings, animals and nature. Agro Milagro developed an organic marketing model for organic companies, and marketing concepts showing these marketing aspects are quite illustrative. Organic marketing model Sustainability is one major keyword and must be an essential aim in credible organic marketing. Companies must pay attention to ethical, moral, social and environmental issues, as well as to the economic side of their business. They need to have fair prices that can only be reached by good communication. In this context, consumers can orientate using fair trade logos as well as organic and environmental labels. For a few years, additionally the 18

19 major issue of climate change is mentioned more and more on labels, e.g. Stop climate change (in the food sector only for organic food) or topclimate etc. Sometimes, essential product advantages are missing in the sales arguments for organic food. One example is the taste; another is the essential health argument. Spiller et al. found that only the German organic manufacturer Allos refers to health in its organic marketing slogan. The current market trends strongly favour the organic market and polarise partly stronger than the subject bio in general. Thus, these trends and sales arguments should be used in organic marketing to further expand this market and to differentiate between different organic brands/ concepts. The main trends are: ( Echt Bio ), The product characteristics healthy, fair and regional can no longer be seen as a matter of course in today s organic market. Nowadays in the increasingly anonymous rising organic market, these can be the leading arguments used to differentiate from other organic products. The arguments fair and regional are already often a focus of many market players. 19

20 Focus: Organic Food Trade in Germany Organic market structure 2011 Production Manufacturers Farmers (incl. cooperatives) more or less for all channels 2 and 3 steps practiced at least for some products Wholesale Conventional and Organic some preferences and some refusals Retail Market shares (sales) in % Expected sales development Number of organic items Discounters National Supermarket chains Regional supermarket chains Drugstores (mainly 2-3 steps) Organic supermarkets & chains & organic shops Farmer shops, markets, -halls (1-3 steps) Butchers & bakers, specialist shops Reformhäuser (mainly 3 steps) ~20 ~19 ~9 ~6 ~7 ~4 ~ incl. others increasing big increasing increasing increasing increasing ones grow and small ones stagnating stagnating stagnating decrease up to 2,000 up to 150-2,450 2,500-10, ~1,000 n.a >3,000 Consumers (slightly increasing demand) Source: Wirthgen, own figure, partly own estimations basis: AgroMilagro, AMI, BIOwelt, biopress, BioHandel, Ein Herz für Bio Note: Change in data sourcing results in a new structure and is not comparable anymore with previous data. Organic retail includes large farmer shops. Others include the small part of internet sales and sales via garage forecourts and home services with frozen food. Drugstores not anymore include the category others. Farmers were underestimated in previous data. 20

21 The figure of the market structure in the German organic food market makes it evident that today the conventional and organic food markets do not differ significantly. The main differences are the additional channels organic wholesale and organic retail, which were once the main channels for organic food. Many regional, but also some of the large organic wholesalers, refuse to deliver to conventional retailers, but also to organic supermarket chains for competition reasons. Like in the conventional food structure, besides the usual route via wholesalers, there are also some retailers who buy directly from manufacturers or producer cooperatives (vertical integration) in order to save the wholesale margin. For instance, the two biggest discounters, Lidl and Aldi, mainly buy centrally from manufacturers and producer cooperatives. But also the owner-run conventional retailers (like a part of Edeka and Rewe retailers and many regional food retailers), the organic retail, butchers and bakers, some Reformhäuser and even some producer shops, get at least some products directly at the production level. The direct purchase from the farmers/ producer cooperatives is concentrated mainly on eggs, potatoes, fresh fruit and vegetables. Farmers and manufacturers deliver more or less to all retail channels, either direct by one step or by two steps via the wholesale. Manufacturers and producers of organic food were originally pure organic businesses. Today, many conventional manufacturers/ producers offer both ranges: conventional and organic food. There are also some special contract manufacturers producing Neuform-Reformhaus products which are sold directly to the retailers or to the wholesalers. 21

22 Food channels and their importance for organic sales Turnover development of organic food in the different channels: In Germany today, organic food is offered in nearly every food store, but in varying amounts. Compared to other European countries, Germany has a strong group of classic organic retailers like specialist organic food shops/ health shops, as well as organic supermarkets mainly with a 100 % organic food stock. Until 2004, the traditional organic food channels (farmers, organic retail and Reformhäuser), accounted for 50 % of the total sales of organic food. Over the years until 2008, mainly the conventional food trade (excluding butchers and bakeries) have won market shares at the expense of the traditional channels. Since 2007, the conventional food trade has accounted for more than 50 % of the organic market. The driving factors for this movement have been firstly, the further access to, and increased variety of, organic food at the conventional discounters, and secondly, the increase in variety of organic food in the conventional supermarkets. The boom in the discounting channel resulted in a boom in general food retailing. New organic customers were reached who not only buy at discounters, but also at organic retailers. After the economic crisis in 2009 with decreasing prices and stagnation in organic market growth, the market picked up a little in 2010 and totally recovered in In 2010, the winners of the slight organic market growths were mainly the organic retailers, in particular the further expanding organic supermarket chains, but also drugstores (many Schlecker shops got overtaken by dm; also Rossmann won some market shares due to the Schlecker insolvency; both show a relative strong organic focus), home services with frozen foods and e-commerce (amazon penetrated the sale of organic foods with about 10,000 products in July 2010). The main losers were Reformhäuser due to further shop closures and conversions, as well as discounters which partly reduced prices and organic assortments, like e.g. Netto. 22

23 Development of the turnover of organic food in the different food channels in Germany Turnover in bn Euro and as market share (%) without food service Turnover in bn Euro/ % Turnover in bn Euro/ % Turnover in bn Euro/ % Turnover in bn Euro/ % New data 5 categories Turnover in bn Euro/ % Turnover in bn Euro/ % Producers Bakeries, Butchers Others Reformhäuser Organic retail Organic retail Conventional food retail 3 Conventional food retail 3 Drugstores etc Total Total ) including weekly markets, farmers markets and farmers home services from 2010 on reduced by big farmer shops with a wholesale purchase of more than 50,000 Euros (net). The market share of producers selling at the farm gate was probably underestimated in previous data up to 2009, 2) including specialist shops for fruit & vegetables 3) including discounters (~1.65 bn in 2009) from 2010 also including drugstores, but without others 4) until 2010 including garage forecourts, mail order trade, e-commerce, frozen food home services 5) the new data base is not anymore comparable to the previous data. E.g., from 2010 on, others summarises producers (s. above), bakeries, butchers, Reformhäuser, garage forecourts, mail order trade, e-commerce & frozen food home services. 6) From 2010 on, including big farmer shops with a wholesale purchase of more than 50,000 Euros (net) Source: AMI, AgroMilagro, Hamm, BÖLW 23

24 In 2011, the organic market nearly reached a 9% market growth. The driving factors seem to be mainly the economic recovery with rising prices as well as some food scandals resulting in increased sales volume figures. More or less all channels profited in 2011, so that the relative market shares in the three new main different channels did not change from 2010 to For some channels it was the first growth for ages, e.g. for the producers and butchers. The first data for 2012 present a moderate sales growth of 4-5%, which is probably mainly due to increased prices. North-South divide: Apparently, in South Germany the demand for organic food is stronger than in the rest of Germany. This can be seen by the density of organic food stores in cities with more than 100,000 inhabitants: Most organic food stores are found in the cities Freiburg (10.5 shops per 100,000 inhabitants), Regensburg (9.7), Heidelberg (8.2) and Erlangen (7.6) Biowelt). This north-south divide is also reflected by the second biggest German discounter, the main discounter regarding organic sales. Aldi is offering a wider assortment with organic products in South Germany (Aldi Süd) than in the North (Aldi Nord). In addition to the north-south divide, there is a concentration of organic food stores in larger cities like Berlin, Hamburg and Cologne. The main players in the organic market over all channels measured by (mainly estimated) sales of organic food products are: Edeka, Rewe (both about 3-4% of the food sales), Aldi and Lidl (both about 2-3%) followed by Dennree and Alnatura (100% organic), Metro (~3%) as well as the regional chains like tegut (~25%), Globus (3-5%), Bartels-Langness (3-4%), Bünting (3-5%), Wasgau (4-8%) and Feneberg (6%). Since 2007, Dennree and Alnatura, the main organic supermarket chains, have appeared in the top 30 of all German food retailers, measured according to food sales. In 2011, they were ranked 25th and 27th respectively. In addition, all named regional food retailers are in the top 30. These retailers often stock up to >3,000 organic products, and reach (in some outlets) at most an organic share of about 30-40% of their food sales (tegut). These chains with bio 24

25 focus have, on average, about 5-10% organic share, while tegut, as the largest, reaches an average organic share of 25% (tegut is sold to Migros Zürich in 2012). Other supermarket chains account for about 3% of organic sales, and discounters, on average, about 2.7%. Lidl and Aldi together hold more than 60% of the whole food sales of the discounters and thus, with an organic share of an estimated 2.4% of the food sales, more than one quarter of the total organic sales of the conventional retailing channel (~3.55 bn in 2011). Altogether, the discounters account for 20% of the total organic market in Well-known brands and labels in the organic market: Regarding all brands and labels in the organic market, the national Bio-Siegel, the retailer labels and the organic brands of the producer associations like Bioland, Demeter and Naturland, rank at the top of the list. The EU-organic label and the special organic brands of manufacturers are generally less known. The only exception is the best-known organic brand Bionade. Furthermore, the own-brands of the organic retailers Alnatura and Dennree are well known as well. Not surprisingly, the retailers with the highest organic sales and/or the longest experience in the organic market also have the best-known retailer organic labels. These are: Netto (mainly Edeka originally Plus, Tengelmann) Edeka currently changed to Edeka Bio ) (Aldi). EU-organic label German national Bio-label Main brands of German organic associations 25

26 Organic food categories and their importance for the different retailing channels: Looking at the food categories offered in the different channels, the main differences are as follows (data from 2006 & 2008 (ZMP & biowelt) & 2007 (AgroMilagro) market experts predict that it is roughly again valid for 2012): organic product range similar to its wide conventional assortment (100-2,200 organic items). Most organic food products can be found at some regional supermarket chains. There is no special product focus. The bestsold organic item in super and consumer markets is probably still milk, with about % market share. Also meat and meat products, with more than 30 % market share, belong to one of the main product categories of this channel. share of about 30 %. They hold main shares in spreads, dairy products (especially successful fruit yoghurt/ yoghurt drinks and cheese from the counter), pasta and dry food, like flour and muesli, as well as bread and some beverages, like fruit juices. In their best-sold product groups, they can cover market shares of %. relatively small organic range on their typical food categories, with at least one organic item per category ( organic items). The most important organic product categories are fresh vegetables (especially carrots, with about % market share, and tomatoes), frozen vegetables (60-75%) followed by fresh fruit (especially bananas), potatoes, eggs and vegetable juices each with about % market share. In the product categories of noodles, dairy products (mainly fruit quark, packaged cheese and yoghurt), as well as pasta and dry food (like flour and cereals), they reach market shares of about 30 % or more. Also a certain fraction of organic fruit juices and bread (~25%) is sold by discounters. Some offer cheese and some meat 26

27 products. While frozen vegetables are mainly sold by Aldi, organic carrots, potatoes and eggs are available at all discounters. For vegetable juices, Plus was the most important player, but this might have changed as Netto overtook Plus (2007). Just recently the discount chains discovered the potential for organic fruit yoghurt (the first players here were Plus and Lidl), as well as for organic meat products (Aldi and Lidl). Usually organic food is sold under their retailer brand combined with the Bio-Siegel. and spreads ( organic items). In their first two main organic product categories, they reach market shares higher than 50 %. For the others, about 25 % and less. over some years. In 2011, they showed a surprising increase in sales mainly driven by food scandals and price increase. Their market share might stagnate with about 7 %. They concentrate on seasonal fresh fruits and vegetables, which is often supplemented by meat, dairy products and partly by wine. They are still one of the main places for organic bread and meat purchases. But both have been losing market shares over years. While the market share of the bakers might now stagnate, butchers won again in 2012, Bakers currently hold about % of the organic bread market. 27

28 Reformhäuser by now hold the smallest market share of organic food (~2 %) and focus on some organic beverages and healthy, mainly dry food and bread and spreads. In recent years, this business was restructured and partly modernised; more and more shops provide a fresh food range. Turnover shares of selected organic food categories in the different retailing channels Rest: Others Drogerie: Drugstore Getränke: Beverages Discounter SM: Supermarket VM: Consumer market NKH: Organic retail TK Gemüse: Frozen vegetables Gemüsesäfte: Vegetable juices Milch: Milk Müsli: Cereals Teigwaren: Pasta Fruchtsäfte: Fruit juices Joghurt: Yoghurt Süssgebäck: Cookies Brotaufstrich: Spreads 28

29 A close look at the different organic food channels (conventional retail followed by organic): 1. Discounters (~20 % organic market share): They have penetrated and captured the organic market in the past 10 years with a small organic range with up to 170 organic products at relatively low prices. They have lost some market share during the financial crisis due to reduced prices and assortments. With about a 27 % market share (sales) in 2009, they account partly for a higher organic share than the large conventional supermarket chains. In some product categories they reach market shares of %. Even though less than 10 % of the consumers trust the organic food of discounters, they buy it. Discounters show a dense distribution net with about 15,000 outlets. The first discounter in the organic market was Plus (Tengelmann) in In 2007, Netto (Edeka) took over the majority of Plus outlets and currently offers about 150 organic items. The leading discounters, Aldi and Lidl, entered the organic market in 2005 and Aldi Süd offers more than 60 organic items, while Aldi Nord only has Lidl, with about 40 products, is also one of the discounters with a relatively small organic range. In 2006, Norma started to offer bio products. Today, Norma is quite strong in the organic market with about 175 items out of 1,000 products! It is the only discounter that managed to be awarded with ein Herz für Bio as Spitzenadresse für Bio (even twice awarded customer friendly food retail businesses with a special commitment to a high quality organic offer). Last but not least, in 2007 Penny (Rewe) penetrated the organic market and now offers about organic items. Penny also took over some of the Netto outlets. Currently, all main discounters have implemented an organic retail label, which typically covers the whole organic range. Only Norma managed to stock an organic manufacturer brand (Rapunzel). Due to legal reasons, Lidl changed its own brand name, Bioness, and relaunched its new organic brand biotrend in Also, Netto has already changed its organic brand once, in this case due to the acquisition of Plus with its strong brand BioBio. Similarly Penny renamed its organic label Naturgut to BIO! Mehr Geschmack, mehr Genuss and implemented a second organic retail label called Babytime. 29

30 Main German discounters and their estimated organic share in 2011 Organic sales in m Euro (estimated) Food Sales in m Euro Organic share as % of food sales (estimated) Organic items (n)* Organic retail label Aldi ~ ,254 ~2.3-3 Aldi Nord >30, Aldi Süd >60 Netto (incl. Plus) ~ ,157 ~3-4 ~150 Lidl ~ ,956 ~2-3 ~40 Penny (incl. Plus) ~ ,824 ~2,5-3 ~80-90 Norma ~ ,168 ~4 Up to170 (incl. Rapunzel in east Germany only~100 items) Others e.g. NP, Diska ~50 <2 ~20 Total ~ 1,300-1,750 (1,550 BIOwelt) ~ 53,500 m Euro (nearly 1/3 of total food sales) <2-4.5 % average 2.7 %-4 % (depending on source) ~20 % organic market share in Source: Wirthgen based on Trade dimensions and rough estimations based on: BIOwelt, Nielsen, ÖkoTest and others * The number of organic items might have been reduced in some discounters due to the fi nancial crisis.

31 Examples of organic food at discounters compared to organic retail Norma Organic retail offer: Alnatura bio supermarket & organic shop Aldi Bio fruit yoghurt -.39 Bio fruit yoghurt 150g Alnatura: -.45 Organic shop: Bio fruit yoghurt g Bio vegetable juice 1.29 (instead 500ml) Bio vegetable juice 500 ml Alnatura: -.95 Organic: not comparable Bio vegetable juice 500-ml -.65 or 1-l

32 Generally, at the discounters, you will find in nearly all their offered product categories at least one organic item. These are mainly food products. The prices of organic food core items at the different discounters differ only marginally, and the price competition remains high. The prices are significantly lower than in conventional and organic retail (except Alnatura & Dennree with competitive prices). Nevertheless, this does not necessarily result in lower producer prices. Apparently, you can read about fair prices paid from discounters. The question is rather, if the low priced bio products pay themselves, or if the bio-range gets long-term support by the conventional product range as part of a sustainable involvement. 2. National conventional supermarket chains and food wholesalers: The three largest supermarket chains all function as wholesalers and retailers. Edeka is the largest one and has 7 regional wholesalers for its own outlets and owner-run supermarkets, as well as 111 Edeka cash and carry Großmärkte (central markets/wholesalers), which concentrate on bulk customers. Edeka took over the wholesale ratio in Rewe, the second most important player, owns the general food wholesale Fegro/Selgros and also functions as a central wholesaler for all its outlets. Metro is mainly a general food wholesaler, and also delivers to its own consumer market chain, Real. Its main competitors in the food wholesale market are Edeka and Rewe. Lekkerland is mainly a wholesaler for convenience food, and concentrates its distribution on garage forecourts and so-called kiosks, but organic items do not seem to play a major role for the time being. Kaufland (Schwarzgruppe) and Tengelmann both concentrate on the retail sector. Kaufland is the consumer market of the Schwarzgruppe, which also owns the discounter Lidl. Tengelmann runs the supermarket chain Kaisers and sold in 2009 nearly all of the discounter Plus outlets. In 2011, Tengelmann started a co-operation with the bio supermarket chain BASIC and listed its trade brand. All wholesalers must be bio-certified to deal in organic food. 32

33 Top national conventional food retailers except from pure discounters, incl. wholesale 2011 National conv. food retail chains except pure discounters Organic sales 2011 in m Euro (estimated) Food sales 2011 in m Euro Organic share in % of food sales (estimated) Organic items (n) up to: Organic retail label Edeka supermarkets, reg. wholesales, discount ~1,100-1,300 42,708 ~3 ~500-2,000 (depends on the shop, incl. >200 Edeka Bio) Rewe supermarkets, wholesale, discount ~900-1,000 (incl. organic outlets) 25,100 ~4 ~1,000 (incl. ~300 ReweBio + 70 fresh foods) Naturland certification Metro Real & wholesale ~ , (incl. 200 realbio) Kaufland consumer market Schwarzgruppe Lekkerland convenience wholesale ~200 10,280 ~2 >100 (kaufland Bio (k-bio), others?) ~ ,601 ~1 ~50 Vitalness (Wellness brand incl. bio items) Tengelmann ~ ,050 ~3 300 (Naturkind, Basic & others?) Total ~2,500-3,000 (doubles due to wholesale) ~100,000 (> half of the total food sales) Ø ~3 50-2,000 (excl. organic outlets) Source: Wirthgen based on Trade Dimensions, biopress, biowelt, biohandel, expert interviews and the internet - partly own estimations of the organic sales based on the mainly given percentages for the organic shares. Edeka expanded its Bio-range in 2012 and renewed its retail logo. 33

34 Regarding the top sellers of organic food, Edeka, Rewe, Metro and Kaufland rank in the top 10 (according to estimated organic sales in 2011). All of these chains have implemented their own organic retail label, while Lekkerland uses an overall wellness label that includes its organic items. Rewe changed its label from Füllhorn to ReweBio, and Metro from Grünes Land to real-bio. In 2012, Edeka expanded its organic range and changed its own trade brand Bio Wertkost to Edeka bio. The implementation of the organic labels of Kaufland and Lekkerland was quite recent, while all other supermarkets have had their own organic retail label for years: Tengelmann since 1986, Rewe since 1988, Metro (Real) followed 10 years later in 1996 and Edeka in On average the organic sales of the big national, conventional supermarket chains account for about 3 % of their total food sales. The main players all offer a relatively wide organic product range with up to outstanding 2,000 organic items at least one Edeka market, including their wholesale items. Rewe has a special position as they, a few years ago, integrated into some counties LandMarkets with a bio offer. Later on they opened their own 100 % organic shops: First the supermarket chain, Vierlinden, which was closed in 2011 and replaced by the new bio concept Temma, offering 5,000 items (for Temma see paragraph organic supermarkets). Whereas, Lekkerland and Kaufland more or less offer an organic product range similar to that of discounters. The price level is usually between that of discounters and organic retail. 3. Regional conventional supermarkets (9% organic market share): Regional food retailers are mainly characterised by regional distribution that is often combined with a regional marketing concept, retail brand and choice of regional suppliers. These companies often function as retailers and wholesalers. Often the retailers are owner-run supermarkets, which results in the positive effect that these retailers can profit from the efficient 34

35 and high volume structure of the conventional supply chain, but they are not owned by the large food traders. A few regional retailers are consumption co-ops, like Coop e.g., the largest one in the retailing sector, and Konsum e.g.. Regional retailers often have a relatively strong organic focus. In their supermarkets, they offer a comparatively wide organic range up to 3,000 organic items partly with their own labels for the organic range, but often combined with other well known organic labels for example, Alnatura. These retailers account for a comparatively high organic share with up to 25 % of their food sales. Thus, this group of retailers could be especially interesting for organic importers. On the other hand, some regional food retailers combine their organic range with the regional marketing concept and concentrate partly on regional suppliers of organic food, e.g., tegut, Feneberg, marking regional foods with Von hier, Coop, marking regional food with Unser Norden. Tegut concentrates on regional organic foods in general. Both tegut and Feneberg mark all organic food, which is traceable back to the producer, with the bio mit Gesicht label, including an internet code linking the product with producer information. With an average of 25 % organic sales out of their food sales, tegut is the regional retailer with the strongest organic focus. In single product categories it has up to nearly 80 % organic sales. Tegut, Wasgau and Feneberg have their own bakeries and/or butchers that produce, a.o., their organic products in that category. Recently tegut have lost sales and looked for an investor. Migros Zürich, that recently started a co-operation with Alnatura, acquired tegut in

36 Regional supermarket chains with organic focus 2011 (table in two parts) Regional conv. Retailing chains with bio focus Organic sales 2011 in m Euro (estimated) Food sales 2011 in m Euro (Germany) Organic share in % of food sales (estimated) Organic items (n) up to: Organic retail label tegut (Fulda, Middle) (investor Migros Zürich) Globus (St. Wendel, South-West) ~ ~25 3,000 (own brand, Alnatura, Demeter, Bioland, Naturland) ~ , >1,100 (Alnatura, Demeter, Bioland & Bio-Siegel) no own label Bartels-Langness (Kiel, North East, Famila NE, Markant NE Bela wholesale) ~ , (4% in Famila) 2,000 (incl. 300 items BioGreno organic focus Famila) Bünting (Leer, North-West, Famila NW, Combi, Markant NW) ~ , (Markant less important <3 %) 2,000 (Markant <500 incl. 70 Naturwert) Dohle Gruppe (Hit, Siegburg, West) ~ , ,400 (Demeter, Bioland & Bio- Siegel & incl. 500 Alnatura) Hit 36

37 Regional conv. Retailing chains with bio focus Organic sales 2011 in m Euro (estimated) Food sales 2011 in m Euro (Germany) Organic share in % of food sales (estimated) Organic items (n) up to: Organic retail label Wasgau (Pirmasens, South-West) ~ n.a. Coop (Kiel, North much stronger organic focus in Switzerland) ~ , n.a. for regional food incl. bioproducts Feneberg (Kempten, South) ~ n.a. (e.g. basic) Konsum (Konsum, Frida South-East) ~ (2009) ~4-5 1,900 no own label, various brands Total of both tables parts ~ 600 (~ 9 % of the total organic sales partly doubled due to wholesale) 10,719 on average ~ 5 % of their total food sales up to 3,000 Source: Wirthgen based on Trade Dimensions, expert interviews and partly rough own estimations of the organic sales based on biopress, Biowelt, BioHandel and the internet 37

38 Generally, the regional retailers with organic focus are especially credible to the consumers concerning their organic concept and green marketing: one was awarded with ein Herz für bio (Konsum e.g biowelt price, Biofach), one had an anthroposophical founder (tegut), and these retailers usually present themselves as committed to sustainability (e.g., they stock quite a lot of fair trade products, e.g. Globus n=70, apply new environmental standards for their new buildings, green energy, sustainable project support etc.). 4. Drugstores (6% market share): They are often included in tables of food retailers, but their food assortment is actually relative small. Their core fields are cosmetics, perfumes, soaps, toothpaste, cleaning agents, baby products, and health items like food supplements, minerals, and some medicinal items. They have quite a credibility when it comes to selling healthy items in general and why not organic food? By now, drugstores offer between 150 and 2,450 organic items. The food focus lies on dry food like cereals, cornflakes, dried fruits, nuts, herbal teas, waffles, sugar, condiments, rice, noodles, bread and baby food. They also offer sweets, jam, honey, juices, soymilk, oil, vinegar, pasta sauces and spreads. The organic food items are usually block placed. Their organic market share, with about 6 %, is rather small, but rising. The prices are competitive. The drugstores with the strongest organic focus and the highest customer satisfaction, the organic pioneers of the drugstores, are clearly Budnikowsky and dm, which offer 2,450 and 1,000 organic items, respectively and cooperate in its wide organic product range amongst others with Alnatura. It has been possible to buy Alnatura organic food at dm since Alternatively, Rossmann and Müller implemented their own organic retail brands in 2003 and 2006, respectively. 38

39 Top German drugstores and their organic range 2011 Drugstores Sales 2011 in m Euro Outlets (n worldwide) Organic items (n) up to: Own organic retail label dm Drogeriemarkt 4,485 2,221 1,000 (incl. baby food & 550 Alnatura items) Anton Schlecker 1) 4,000 13, bio cosmetics, (brand gut & gerne (BZ Biozentrale)) none none Rossmann 3,843 2,231 >300 all enerbio + baby food (n=40, Babydream) Müller 2, >150 (all Bio Primo+ baby food) Budnikowsky (HH) ,450 (incl. 1,000 Alnatura items) none Source: Wirthgen based on expert interviews, Trade dimensions/ LZ (Lebensmittelzeitung) and Biohandel Footnote: 1) Schlecker lost further sales and became insolvent in 2012; Schlecker shops were closed or sold, mainly to dm. Für Sie drugstore chain of the Rewe group acquired the Ihr Platz chain of Schlecker in

40 Except for Budnikowsky, the main drugstores are national retail chains. Budnikowsky only distributes in the Hamburg area. The four major chains hold a market share of about 95 % of the drugstore turnover in Germany. The ex leader Schlecker became insolvent in 2012; many Schlecker shops were closed or sold. The main winner and new market leader is dm which expanded strongly in 2011 and But also Rossman won some market share due to the Schlecker insolvency. 5. Reformhäuser (2% market share): Reformhäuser are a kind of health shop that traditionally sells a certain fraction of organic food. The word Reformhaus and the brand neuform are registered and can only be used for this kind of shop; including licence holders. Reformhäuser are present in Germany and Austria and, in a similar way, also in the Netherlands. The Reformhaus outlets are and mainly stay rather small; they offer their products on sales floors of up to 250 square metres. Generally, they focus on health food, like food supplements, dietary food including food for special allergies, dried fruits, nuts, herbal tea, natural medicine, natural cosmetics and some beverages and vegetarian specialities. Traditionally, they did not offer any fresh fruit or vegetables. Thus, compared to small organic shops, they missed quite an essential sales carrier. Their advantage over drugstores and organic retailers is that they have trained personnel to advise their customers. The Reform product market is a small market with sales of about 600m Euros in With organic food sales of about 170m Euros, Reformhäuser hold the smallest organic market share in the food market. On the other hand, their share of organic food as part of their total food range accounts for about 70 % (estimated). Usually Reformhäuser make less than half of their sales on foods. The owners of Reform-häuser are all members of the neuform association for German Reformhäuser or at least a kind of contract partner. The neuform e.g. is a cooperative and was restructured in Neuform e.g. mainly provides central marketing and consultancy, while the so-called ReformKontor Gmbh & Co KG (owned by neuform) is now responsible for production, packaging and trading activities (including logistic and import) of the own trade brands. 40

41 Besides ReformKontor, Reform products are distributed through several wholesalers. Large Reformhaus chains also buy direct at certified producers. Today, the most important Reform product (and organic) wholesaler is Claus/Pural, which acquired some other Reform product wholesalers and delivers Reformhäuser in Germany, Austria, France and Switzerland since 2011 with a full product assortment including fresh fruits & vegetables in cooperation with Handelskontor Willmann (see appendix). Other distributors of Reform products are Harder Reform, Carnot, Rhein-Main Reformwaren and Menson. From 2000 to 2010, the absolute sales and the market share of organic food sold through Reformhäuser have decreased continuously. This goes along with a strong reduction of neuform-member businesses and Reformhaus outlets. The number of neuform members decreased to 569 members in 2011 (less than 50 % of the members in 2000) and to about 1,370 at the end of 2011, which is a loss of more than 1/3 compared to the year An increasing number of neuform members convert into partners. Essential reasons for the decrease are: the strong competition from drugstores, organic shops and conventional retailers with their organic range. The result is a concentration process by filial-system and the closure of unprofitable shops. Furthermore, the classic customers of Reformhaus shops are elderly and their numbers reduce disproportionately. The neuform-group tries to reverse the negative development by launching new stores and marketing concepts which should help to reach new consumer segments (wellness, LOHAS). For instance, they have built up a common Internet shop called Vita Nova. Many shops were modernised and partly offer an extended organic product range with fresh food. Some owner-run Reformhäuser changed and converted into organic shops or even organic supermarkets like Herrmann. The Reform-market seems to be recovering now. Some large Reformhaus chains have expanded the number of shops. Altogether, this resulted in increased sales (+1,4%) in 2010 and The ten main Reformhaus chains together cover more than 70 % of the organic sales of this channel. All Reformhaus chains have regional distribution with different profiles. 41

42 Reformhaus association neuform 2011 Sales 2011 in m Euro Neuform e.g. (569 members) 600m incl. ~170m organic food sales Vita Nova Internet GmbH n.a. (cooperative online Reformhaus of 15 owners) Outlets (n) Organic items Head office & region covered ~ partner ~70% Zarrentin, Germany 1 online shop 90 outlets of the 15 owners ~70% Aachen, Western Germany Wirthgen based on expert interviews, the internet and current issues of bio-journals Top Reformhaus chains 2011/2012 Ranking by outlets Outlets Special profile Head office & region covered 1. Vitalia 2. Bacher 3. Vita Nova Escher organic outlets with organic fresh range 71 new shop concept better life, motto: natürlich gesund leben 27 Fair trade, sustainability, nature energy Bruckmühl, South-East Germany Remscheid, North-West Germany Pirmasens, South-west Germany without Bavaria 4. Ebken 23 Delivery service Syke, Northern Germany 5. Hermann 19 7,000 organic items Oberursel, Frankfurt area 6. Engelhardt 18 wide assortment gluten-free products Hamburg, Hamburg area 7. Quentin 13 Berlin, Hessen, Sachsen 8. Freya 12 Online shop in preparation, vegetarian party service Frankfurt, Frankfurt area 9. Goll 12 Delivery service Mönchengladbach, NRW 10. Vita Nova Kaubisch 11 Oberhausen, West Germany Wirthgen based on expert interviews, the internet and current issues of bio-journals 42

43 6. Organic wholesale (Naturkost Großhandel):The organic wholesaler is the essential precursor for the development of the German organic market. In the seventies, the first organic wholesalers were founded. They delivered regionally to their customers who, at the beginning, were only small organic retail and farm shops, as well as consumer food cooperatives. Since many of the organic wholesalers still have a regional distribution, they are also called regional wholesalers. Over the years, the regional organic wholesalers have expanded their customer base more and more. Today some large ones have a national distribution network that strengthens the competition, like Dennree, Weiling and Pural (Claus-Pural). In addition to that, there are some specialised organic wholesalers that mainly import some specific organic items. For instance, there are Biotropic/Duisburg, Bio-Ilios/Tübingen and Schramm/Appenweier for fruit and vegetables and Riegel/Orsingen and Naturian/Fuldabrück for organic wine. Apart from the organic shops, the customer base nowadays includes organic supermarkets, conventional supermarkets, some drugstores and Reformhäuser, as well as bulk customers like hotels, restaurants, system gastronomy, canteens etc. Organic retailers still represent about 75 % of the sales to the main customer group. The largest organic wholesaler, Dennree, not only built up a national distribution network for its wholesale, it also founded its own nation-wide retail filial -system with own bio supermarkets called Denn s similar to the bio supermarket chain Alnatura. Denn s actually started as a kind of bio discounter with very competitive prices (Alnatura prices are very competitive as well). Today, in 2012, Dennree has 106 outlets (and Alnatura 72). Such a step results in competition for its own wholesale customers; this is not easy to explain to them, and usually results in loss of customers. Nevertheless, Dennree is still quite successful. Another large wholesaler, Weiling, started in 2010 to follow with an initial pilot shop Bioladen Weiling with 5,000 organic items in 600 square metres offering to get to known bio products newly by testing. Weiling, additionally launched an own trade brand named Bioladen (like its own shop), as well as a so-called green bag with fresh regional vegetables that are both available in up to 500 organic shops. 43

44 The regional organic wholesalers try to keep their share of the growing organic market which is hard-fought. Their new strategy is to cooperate through marketing alliances and thereby strengthen the small organic shops: For instance, a group of 10 wholesalers, called the regionals, advertise with the concept Echt Bio (real organic) and with the slogan regional is first choice. The majority of the regionals recently developed and implemented an own trade brand for dry products, called green organics ; this brand is available in more than 200 organic shops. Other regional wholesalers develop their own regional marketing concepts like the organic wholesaler Ökoring with BioRegional (the most regional organic wholesaler in the area of Munich). Currently, another initiative Bruderhahn is planned by some regional wholesalers, starting They plan to concentrate their egg purchase on so-called ethic eggs with 4 % extra charge in order to compensate for the lower slaughter weight of the male animals, which normally get rejected. Furthermore, many regional wholesalers widen their fresh product range (green, yellow and white) in order to enable their main customers, i.e. the smaller organic shops, to compete with the big bio supermarket chains like Denn s and Alnatura that offer a wide fresh product range. As a consequence, for the procurement, many organic wholesalers still have a strong regional focus concerning their choice of suppliers. Nevertheless, the share of supra-regional organic products and import items will increase as well. Since their main customers (the small organic shops), are decreasing, the future assortment alignment will focus more and more on the demand of the growing part of bio supermarkets. Foreign companies have to prepare very well before approaching the regional wholesalers as they have different relations among themselves. Most of the 25 large organic wholesalers (which are listed with their profiles in the appendix) offer more than 7,000 organic items; the largest one even offers 11,000 items. Four have stock capacities of more than 10,000 m 2 and many of them have implemented an online-shop. 44

45 7. Organic retail (31% market share): The specialised organic retailers are different from other food retailers due to their significantly wider, and 100 % organic, product range, with usually about 2,500-10,000 organic items. They also offer competent advice and, last but by no means least, a consequent orientation towards superior values. This results in a significantly higher credibility in the eyes of the consumers, which, these days, is the main base for organic marketing. The trend goes towards the combination of an adventure/experimental shop combined with a bistro concept. This channel is constantly growing (sales), but very dynamic and highly competitive. In 2011, there were as many outlet closures as new openings. There are two groups of organic retailers to distinguish between: Firstly, there are the traditional, rather small owner-run, organic shops with sizes smaller than 400m 2, while especially the smallest (<100 m 2 ) have shown decreased sales and number of stores over the last years. Currently, there are about 1,900 stores left including about 300 large farm shops with similar organic assortments. Secondly, there are the rather larger owner-run bio supermarkets and supermarket chains that on average present a positive sales trend that results in an increasing number of outlets. Especially a few well-running bio supermarket chain concepts, overcompensate losses of smaller ones, overall resulting in increased sales in this channel; single chains have in recent years reached yearly sales plus of about 20 %, e.g. Bio Company and Dennree with its shop chains. Today (2012) there are about 450 bio supermarkets, which make about 50 % of the total turnover of organic retail. The two main players, Alnatura and Dennree, together account for about 40 % of these 450 outlets (~178). Since 2008, both these organic supermarket chains have ranked amongst the top 30 German food retailers each with sales of more than 500m Euro in They offer between 5,000 and 6,000 organic items at competitive prices. By now, the top 7 bio supermarket chains together cover about 60 % of all bio supermarket outlets. There is a list of about 16 bio supermarket chains (with ~ 350 outlets) and their profiles in the appendix. Small owner-run supermarkets with less than 5 stores are not listed (except Temma & Vierjahreszeiten). 45

46 Top bio supermarket chains 2012 Ranking by size Outlets 2012 in Germany & partly sales Assortment, special profile Head office & region Retail label Denn s (Dennree) 106 (Dennree 539 m in 2011 incl. wholesale) 5,000-6,000 items, incl. 350 own brand, filial -system central wholesale Dennree, regional purchase: fresh and bread range, competitive prices, very expansive Töpen, Germany Alnatura 72 (521 m in 2011 incl. wholesale) 6,000 items, incl. 1,065 own brand, centrally organised, coops with conv. retailers (e.g. tegut, Migros, Globus, Hit, dm, Budnikowski), pioneer, competitive prices, own wholesale, expansive Bickenbach, Germany Bio Company 29 (62 m in 2011) up to 8,000 items, 60% of organic associations, competitive prices, very expansive, up to 40% regional items, outstanding bistro concept Berlin, Hamburg, Dresden Basic 25 (~100 m in 2011 (AG)) ebl naturkost 21 (~40 m in 2011 estimated) up to 10,000 items, incl. 300 own retail brand, bistro, online shop, own retail brand at Feneberg & Tengelmann (depot concept) 5,500-6,000 items, own organic wholesale and butcher with own brand, mainly regional food from organic associations like Bioland München, Germany Nürnberg (Fürth), Franken/Bavaria SuperBiomarkt 17 (35 m in 2011) up to 7,000 items, brands like Bioland, Naturland, Demeter, Ecovin, aim quality leadership, pilot project bio to go since 2011 Münster, Düsseldorf, Osnabrück & surrounding none Source: Wirthgen based on the internet and current issues of bio-journals and expert interviews 46

47 The two organic retail groups, rather small organic shops and rather large bio supermarkets, differ essentially in their product procurement. The owner-run organic shops usually get deliveries from their regional organic wholesaler. In addition, for price reasons or as assortment supplementation, they also purchase some items from national organic wholesalers like Dennree or Weiling, as well as some fresh regional food and farm processed food from local organic farmers. Letters should strengthen the regional profile and satisfy the consumer demand for authentic regional organic food with an emotionally higher quality. According to the procurement, the bio supermarket chains can roughly be divided into regional and national chains. The substantially owner-run regional chains, with a range of 2,500-8,000 items (one exception of 18,000) usually prefer (similarly to the organic shops), regional suppliers, like the regional organic wholesalers supplemented by regional farmers. In addition, they stock organic products from specialised organic wholesalers and/or importers. The three largest regional bio supermarket chains are Bio Company, ebl naturkost and SuperBiomarkt with outlets. Ebl naturkost has (an exception in the mainly owner-run regional bio supermarket chains), a centrally organised branch -system with central purchase and their own organic wholesale, as well as their own butcher. Bio Company, with 29 outlets (2012), expanded strongly and moved ahead of the third largest national bio-supermarket chain Basic in It is also worth mentioning the LPG bio supermarket chain in Berlin with its outstanding, wide bio range of 18,000 items and shops of up to 1,600m 2. Also remarkable is the 2009-launched bio retail concept TEMMA of REWE in Köln. Temma is an outstanding neighbourhood bio supermarket concept with a deli-bistro, an own bakery, a big cheese counter, a wine and a tea corner, a muesli terminal and many more. This concept is similar to the modern and expanding bio supermarket concept with large bistro called Vierjahreszeiten (Ruhr region & Köln). 47

48 The three national mainly centrally organised bio supermarket chains, Alnatura, Dennree and Basic, with an assortment of 5,000-10,000 products mainly get deliveries from their centrals or procure their goods from national organic wholesalers (except some regional fresh foods). Since 2011, Dennree leads referring to sales and number of outlets due to its aggressive expansion policy announced and followed since Alnatura expands more continuously. Together they cover more than 1bn sales (incl. wholesale). While Dennree started as national organic wholesaler, Alnatura started its business as an organic production and retail company. Besides its own outlets, Alnatura has for a long time and increasingly delivered to some regional bio-affine conventional retailers and drugstores: tegut, Globus and Hit and Migros (CH) as well as to dm and Budnikowsky (drugstores). The third national bio supermarket chain is Basic with currently 25 outlets that once tried to compete with Alnatura and Dennree. But Basic is a 100 % filial system, while Alnatura and Dennree both profit from their own wholesale. In 2007, Basic sold some shares to Lidl resulting in a strong opposition in the organic business. Therefore, Lidl and Basic split up again. But still, the company is weakened by infighting. Recently (2011), Basic started to sell its own trade brand through some bio-affine conventional supermarket chains, Feneberg and Tengelmann. Other retail channels: As shown in the market structure table at the beginning of the trade chapter, some further channels are of relevance. These are the farmers and farmers markets with an organic market share of 7 %, as well as the butchers and bakers with an organic market share of 4 % both channels with growing sales after several years. Through both retail channels, self-produced organic food is mainly sold, and thus these channels are mainly interesting for suppliers of raw materials and not for foreign manufacturers. Furthermore, there are some internet sales. As far as is known, most of the internet shops are run by organic wholesalers and bio supermarket chains, and are, thus, already covered. In 2010, Amazon started the internet sale of organic food products, presently selling more than 10,000 products covering nearly all well-known brands! Nevertheless, currently, the market share is negligible. 48

49 Trade margins and pricing in organic and conventional trade The purchase price must cover all costs of transportation, insurance, handling and other fees. Suppliers should always keep in mind to include some percent for extra costs like promotion discounts, cash discounts ( Skonto ) etc. as well as for totally unforeseen costs, so-called surprices (<1%). A price list should be prepared, but not simply sent to the wholesalers, since it is important that it does not just lie around in drawers and on office desks (see appendix for an example of a price list). The purchase price is a freely determined net price, which gets paid by the wholesaler or retailer after delivery into their warehouse. As an example: Suppose the purchase price is 1 Euro, which means that the product costs 1 Euro net for the customer, e.g., the wholesaler, who themselves add their mark-up of about 25 %. The result is the net purchase price for the retailer who procures from the wholesaler. The retailers themselves add their mark-up of, for example, about 60 % including the VAT (7 or 19 %). Thus, in total, the retailer comes up with a consumer price, including VAT, of about 2.00 Euro. In fact, a psychologically more attractive consumer price of 1.99 Euro will be found in the shops. The trade margins in organic retailing increased slightly over the last years, reaching a net average of 50 % mark-up in 2011/2012 (BioHandel 10/2012). In the case of a sales promotion, neither the retailer, nor the wholesaler is forced to reduce their mark-up, but they will usually do so, but only by about a 5 % step, sometimes more. In that case, the purchase price might be reduced by about 10 % by the producer/ manufacturer to 0.90 Euro, the wholesaler mark-up to 20 %, and the retailer mark-up might be reduced to 55 %. Thus, a calculated consumer price of 1.67 Euro results, but the product would probably be offered at 1.69 Euro to the consumers. 49

50 Estimated trade margins pricing example for organic products in different channels based on 1 Euro purchase price Purchase price 1) (for wholesalers) 1 Euro Normal 1.00 Organic shop Mark-up 2) wholesale (regional, national, retailing centrals) Normal 1.00 Conventional chain 3) (12 14 %) Net purchase price retailer in EUR Mark-up 2) retailer/ retail chain Ø (incl. VAT 7/ 19 %) Consumer price incl. VAT (7/ 19 %) in EUR 25 % % (1.99) % (incl % for its wholesale costs) 4) ) For the purchase price of 1 Euro, anonym, not necessarily equal products are implicated. 2) Trade margin as mark-up. Mark-up levels depend on the product (different store costs etc., e.g. fruit and vegetables higher mark-ups) and the competition (incl. costs for place). 3) Often chains buy direct at manufacturers resulting in one margin less, one margin referring to the purchase price! 4) Costs of organic products sometimes get covered by the sales of conventional products. Source: Wirthgen based on experts interview, store checks and own estimations For sales promotions, as well as at times of product introduction, the producer usually gives a discount of 5 to 10 %, and exceptionally up to 15 %. Higher discounts, on the one hand, lead to the impression of sales pressure, and lower discounts, on the other hand, do not have enough effect on the consumer price. Discounts in terms of product add-ons are typically no longer accepted. A sales promotion discount usually takes 2 weeks and should not exceed 4 weeks. An introductory discount should be about 4 weeks, but not last longer than 6 weeks and both only for some items (max. 5). Suppliers who do not want to stick to this advice should talk to their partner, explain the motives and listen to his response. Some other purchase conditions and habits are of relevance in the German trade. All coming from the conventional trade, they have mostly also reached the organic trade over the years. An exception might be the so-called 50

51 Listungsgebühren, fees that are charged partly by conventional retailers when listing a product in their range, in other words, for giving it space on their supermarket shelves. Some retail chains might also require a yearly fee. Suppliers should not just agree, but ask for something in return. This is a really important equivalent. Suppliers can demand a specific product placement on the shelves and inform the retailer about store-checks conducted by Danish people. German retailers will respect that, and it shows that you have personnel interest in the products. Generally, conventional and organic wholesalers might ask for: Umsatzrückvergütung turnover bonus): a bonus paid regularly at the end of the year by the supplier (manufacturer/ producer) for successful handling and selling of the products. It is based on the turnover of the past year (1-2 %) and the turnover increase referring to the previous year (3-4%). Werbekostenzuschuss extra payment for advertising costs) stands for extra costs that are to be paid by the supplier to the wholesaler as a contribution to the marketing/ advertising costs of the wholesaler. These costs are voluntary meaning they are only due if the supplier wants the wholesaler to take over the marketing activities. It is to be considered that, in that case, the supplier has none or little control over the marketing activities for the products. The amount should not be higher than 3 % of the turnover. Sometimes, wholesalers also demand a contribution to printing and distribution costs of their bi-weekly leaflets. This might be about 2,500 Euro per item. Skonto describes a cash discount given by the supplier to the wholesaler for quicker payment. Usually, the payment term in the German trade is about 30 or 60 days after receipt of the invoice. Offering Skonto, the payment term can be reduced to between 7 and 14 days, and a discount of normally 1-2 % will be deducted from the sum by the supplier. That can be formulated as follows: Zu zahlen: EUR 1.000,- netto bis zum xx.xx.xxxx (date) or with 2 % Skonto: Euro 980,- bis zum xx.xx.xxxx. 51

52 Usually, but not always, organic products are cheaper in organic supermarkets/ chains than in rather small shops. This is caused by lower costs per item due to the higher volume as well as by more efficient category management. But the margins, and thus the prices, also depend on the competition in the area of the point of purchase, as well as the rent costs for the store. The cheapest offer of organic food is found in the conventional food channels, especially at discounters like Aldi or Lidl. Partly organic supermarket chains (e.g. Alnatura) try to compete with their prices on some core products with conventional discounters (see chapter trade, paragraph discounters). But still, the consumers who today buy at organic retailers are often loyal, and will typically not change their point of purchase. This is due to the higher credibility, partly the regional product focus, and the different atmosphere in the shops, as well as the stronger conviction of these committed and rather intensive organic consumers. While organic shops are more attractive to elder customers, younger and more modern consumers with often higher purchase volume buy more and more at the modern bio supermarkets. But it is also just a question of availability. Bio supermarkets are still concentrated in big cities and normally not located in small cities or even in the countryside. Thus, they also profit from higher customer frequency. The reasons for the cheaper organic products in conventional channels are only partly based on more market power, but mainly on strong price competition (with roots in the discounting sector), lower margins due to more efficient structures, higher volumes and fewer products. In Germany, the margins are the lowest in Europe. The market power is not yet of high relevance as the product supply is still often limited. Apparently, the organic trade succeeds in maintaining its prices and also its customers. The conventional trade channels are more attractive to a new group of organic consumers who are not willing to pay the high prices in the organic trade, 52

53 not willing to put up with additional purchase mechanisms, and may be happy with the more anonymous atmosphere in large conventional supermarkets/ discounters. They typically know fewer organic brands and also less about organic production.the price competition was often so high that some organic items may have been sold at purchase price in the discounting channel. To sum up, the margins and prices are higher in the organic trade than in the conventional trade. But the price pressure is higher in the conventional trade. While more and more intensive and less price sensitive organic consumers move, if possible, from organic shops to bio supermarkets, new, more price sensitive, organic consumers are mainly won through the conventional trading channels. As already mentioned, prices not only differ due to the different trading channels, but also depending on the product itself. For instance fruit, vegetables and potatoes have relatively high margins and thus higher prices due to high storage costs and short storage life. Moreover, the prices of fruit, vegetables and potatoes vary strongly depending on the highly variable supply volumes. Comparing average prices of organic food with conventional food prices, the following picture results: The organic products with the smallest price difference to their conventional alternatives are baby food products followed by dairy products like milk, fruit yoghurt and fruit quark, as well as frozen vegetables and pasta. The price mark-up for the named products ranges between 20 % and 50 %. Products like butter, muesli, juices, pure yoghurt and quark costs up to 100 % more, while spreads, flour and meat products are the most expensive ones, with mark-ups of up to 200 %. The named price mark-ups are based on average price comparisons, which actually present a biased picture as organic products are mainly considered a premium product. If you only compare prices of organic products with prices of premium conventional products, the differences are insignificant. 53

54 Hints for a successful import How to find and get in touch with your customers: A good starting point could be the leading international organic fair Biofach in Nuremberg or the world s largest food trade show Anuga in Cologne with one organic focus. Many wholesalers also have their own stands at the two regional fairs Bio Nord and Bio Süd. Currently these relatively new organic fairs are mainly attended by German exhibitors, but also by some from the EU or third countries. Its focus is the traditional organic trade in Germany. Since 2012, these two regional fairs are supplemented by the new regional fairs Bio Ost and Bio West (see schedule of fairs in the appendix). Additionally, there is an international organic fair for trend food & wellness in Berlin, called Next organic Berlin (earlier: Bio Messe Berlin). The main importers of organic food products to Germany are the conventional and organic wholesalers and importers altogether, followed by the retailing chains and the processing industry, that often import their products directly. Referring to some product groups, some main importers are named below: Eosta (NL) strong in Germany and the UK, Bio Tropic and Lehmann Natur (Germany, North Rhine Westfalia), Port National (Germany, Hamburg), Schramm (Germany, Appenweier) Fegro/Selgros C&C (second largest C&C wholesale with the organic brand gut und gerne ), Riegel and VivoLoVin Detailed information about German organic wholesalers and supermarket chains are presented in the chapter food channels as well as in the appendix. 54

55 Special product quality: What are the special product attributes which help imported organic food to survive in the German supermarket and on the organic trade shelves, even though German organic consumers prefer domestic, best regional food? Of course, primarily these are the general advantages of imported food (compare chapter 2) like: a) a supplement and enrichment of the German menu (new products, new nutritional concepts (e.g. Smoothies from the US), food with a new and interesting exceptional taste (e.g. Parmigianino from Italy). and of course well known products which traditionally get imported as conventional products and cannot be produced in Germany), b) a lower price, but definitely not more expensive than a comparable German product, c) authentic and high quality food with country of origin which is well known for a specific high competence (e.g. cheese handcrafted from France), special climate and thus high quality for some products (this applies, e.g. to wine, olives and tea), Generally, in Germany, food from Switzerland and Austria is well known for its high quality (DLG 2012). d) traditional high quality foreign food, transporting foreign culture and lifestyle or holiday feeling (this accounts for the success of Italian pasta, French cheese, Spanish sausage, Greek Feta and also some ready meals like Spanish paella). Additionally, the following quality aspects favour import opportunities of foreign products: e) packaged in Germany, which could result in higher consumer trust, believing in German due diligence and quality assurance (this might be especially essential for southern and eastern European countries, one successful example are BioVerde products from the Mediterranean area), f) traditional, foreign packaging of branded products, which are well-known in Germany (this applies, for example, to cookies and short bread from the UK, or to tea from Japan), 55

56 g) packaging, design and labelling tuned to German packaging, paying attention to those certificates demanded in Germany (see paragraph, labelling and certificates), environmental aspects and surely, the language should be German (and not in many languages, as this can lead to information overload), h) a self-explanatory product look, especially if the product is new to, or not well known amongst, German consumers. Labelling, certifications and quality insurance: First of all, it is essential for all exported and imported organic food to be clearly labelled and marked and identifiable as organic at all transport steps in the food chain. The identification should follow in two steps: Marking of all single packages, bundles, containers etc.; and the clear designation on the export papers. Organic food which is to be imported into Germany should carry the correct certification. In the EU, all certification bodies must fulfil certain standards based on EN or ISO Guide 65. The correct certification depends on the acceptance of it among traders and consumers. The EU legislation (EG 2092/91, replaced by EG 834/2007) regulates the prescriptions for production and labelling of organic food directly. This legislation denotes the base level of organic products on the German market. Food produced (including imports) according to that organic base level may carry the wide spread and in Germany well known national Bio-Siegel, since July 2010 it can be used only supplementary to the obligatory new EU organic label, based on the same prescriptions. There is a Bio-Siegel design guide referring to the EG legislation, which prescribes the proper use of the Bio-Siegel for packaging, promotion and advertising means (see There are also some other rules to be considered for the use of the Bio-Siegel, for example, before the first application of the Bio-Siegel, the BLE (Bundesanstalt für Landwirtschaft und Ernährung) has to be informed. 56

57 A standard form for that, as well as further rules to follow, are set up in a specific labelling prescription (Öko- Kennzeichenverordnung see Importing and labelling of organic food with the Bio-Siegel is only allowed for companies which are controlled and certified according to the EG 834/2007 regulations (for a list of control organisations see More stringent than the EU organic basic rules are the prescriptions of the German organic associations (see chapter short historic review). They all have their own regulations, own labels and own control bodies, which have to report to the government control bodies. Some of these organic associations have a regional focus (Biokreis, Biopark, Ecoland, Gäa), but the most important ones like Bioland, Demeter and Naturland are national and even internationally well known and applied. Demeter and Naturland are the only ones which generally accept foreign manufacturers. Bioland only makes an exception for some Northern Italian producers for historic reasons. Most organic wholesalers show a clear preference for 1. regional and domestic labels of the German organic associations (Bioland, Demeter, Naturland, Biokreis, Biopark, Ecoland, Gäa, Anog and Ecovin), 2. international organic labels of the German organic associations (Demeter and Naturland international) and 3. labels based on the EU standard, first the German Bio-Siegel as supplement to the new EU-logo. Conventional supermarkets and especially discounters do not share that preference. This may partly be because the organic associations feared loss of image at the beginning, and did not want their products to be marketed throughout the conventional trade. Today, some owners run and, even some chain-run supermarkets 57

58 sell sometimes seasonal fruit and vegetables as well as deli food and fresh meat from producers of the organic associations. Both, conventional supermarkets and discounters offer exclusively their own organic brands, which is usually combined with the Bio-Siegel and since July 2010, as well with the EU-logo. This is the reason for the high aware of the Bio-Siegel amongst German consumers (printed on 65,000 organic items in 2012). It is also possible to put a label of a German organic association beside the obligatory EU-logo and the Bio-Siegel. It is just a question of label-overload, and the preference is clear. Also the IFOAM offers the use of its international organic label, but on the German market, it is more or less never used and not known by the consumers. Consumers trust in federal labels/certificates is currently not very high. They rather trust labels of the organic associations as well as those from consumer testing organisations like Stiftung Warentest, Öko-Test & Food watch, media coverage, test reports and recommendations on internet forums and networks, but also special countries of origin. Stiftung Warentest & Öko-Test rank highest, but especially for food products,there are not many tests. The focus lies more on non-food products. While the Stiftung Warentest usually focuses on pure quality criteria, with a focus on technical attributes, and sometimes on CSR (Social responsibility) criteria, the Öko-Test covers quality attributes, but always has a focus on the environmental/ecological aspects like pesticide residues in food, eco-balance, packaging etc. Both are well-known by consumers, especially as well-marked products usually carry the test results by means of a label. Also, TV and radio programmes discuss the results of the tests. On some 58

59 commodities, like capital goods, the impact is remarkable, but especially for food products, the results probably only reach a small consumer segment. In the near future, market experts expect a strongly increasing importance of the modern interactive so-called QR-codes (Quick response), which allow consumers a product quality check by virtual contact to further manufacturer information and the internet networks via a smart phone. QR-codes are already known by 2/3 of the German consumers. With focus on the organic market, using the same system, Naturland and Bioland together with the regional supermarket chains tegut and Feneberg established the Bio mit Gesicht label with links to the homepage of the organic producers. Furthermore, some general domestic and international food standards have been established in the German food market. They are set up by the food trade or by federal or private economic institutions and shall all ensure a certain standard and product safeness for the food export and import. Besides the food hygiene system HACCP, based on the EG legislation 93/94/EG and the hygiene management system ISO 22000, these standards are mainly: a) the quality assurance systems like: 1. BRC (British Retail Consortium, mainly applied: BRC Global Standard Food and BRC Packaging (BRC/IoP)), 2. IFS (International Food standard is similar to BRC, but the audit results in a quantitative evaluation, while a BRC audit only comes up with minors and majors), 3. QS ( Quality and Safeness label for some specific products, for example, meat, fresh fruit and vegetables), 59

60 4. EUREPGAP (Euro Retailer Produce Working Group good agricultural practice), 5. GP (geprüfte Qualität checked quality ), 6. QM (Quality management milk) and b) the ISO management systems like: 1. DIN ISO 9000 etc. quality management systems and 2. DIN ISO environmental management systems and 3. DIN ISO Corporate Social Responsibility standards. While all food manufactures need to work with HACCP, it depends on the customer which further food standard needs to be applied. For instance, the German retail community developed the IFS standard according to EG in 2001 for its manufacturers of own-brands, valid for all manufacturing levels after agricultural production up to trade. All manufacturers that retail their own brands need to have an IFS certificate. The similar BRC standard is recognised for its valid period, but if so, it needs to be changed for the next audit into IFS. Often, the German retailers demand an IFS audit of a certification institute which is accredited by UKAS. More information is available on The QS system aims to ensure quality and safeness throughout the whole food chain (traceability), so it is a vertical system. It was established by the German trade in 2002, and started at first with only meat, since meat is the food category that is most troubled by food scandals. In 2004, a QS label for fruit and vegetables, as well as for potatoes, followed. By now, for meat products the QS label is a must. Over the past years, the QS system has gained international importance; currently about 130,000 partners worldwide taking part in the QS system. The IFS recommends a so-called combiaudit referring to IFS and QS. 60

61 The EUREPGAP ( Euro Retailer Produce Working Group Good Agricultural Practice ), also concentrates on fruit and vegetables, but on a horizontal level, focusing on the agricultural business and its suppliers. It was founded by 20 European trade companies, coordinated by the European trade institute (EHI Köln) and sets up standards for production, environment, social responsibility and hygiene. Similar to QS, GP focuses on the quality of meat products and is, like QS, a vertical system, covering the whole food chain. The program is compatible with QS, but includes some additional quality criteria. QM milk is a vertical system established by, among others, the German milk industry association as a self-control system for the milk economy focusing on raw milk examination, internal documentation and the control of animal feed. ISO 9000 etc. can be more or less regarded as standard. ISO standards are internationally well known and thus not described further. Last but not least, the Produkthaftungsgesetz, legislation for product liability, determined that the product manufacturer is liable for all damages (regardless of guilt) which his faulty product caused. Rules and customs in the German food trade How to deal with German food traders? Following some rules and customs will make doing business with German wholesalers or food retailers easier. Have a look at the examples for some additional sales material in the appendix. 61

62 Packaging, product declaration/information and shelf life All packaged products have to be marked with a scanner-eligible EAN-13 barcode. Do not change the barcode! If this should be necessary, inform the manager in charge in writing at least 2 months in advance. Similarly, a change in packaging units or packaging design should also be communicated in writing two months in advance. Furthermore, never sell old food, and ensure shelf life. If not possible, discuss a possible shorter shelf life with the trader before sending the products! The packaging should show a list of ALL ingredients; this is very import for organic food, especially in organic retailing, even though laws and regulations permit the omission of certain ingredients. Delivery terms, prices and customer contact The most important delivery terms are: constant delivery volume (availability) and quality as well as constant, best prices. Usually, food traders expect constant product availability all year round. Ordered goods should be delivered within one week, otherwise the manager in charge should be informed. Price differentiation for the same product delivered to different companies should always be explained by the order quantity. Price changes must be explained and announced in writing at least two months in advance. Similarly, any quality or recipe change must be communicated and explained in writing two months in advance (necessary for their product info system). Always take the chance of meeting your customers at trade shows (see schedule of fairs in the appendix). It is best to make an appointment some weeks in advance, and take sales materials with you. You can also send sales material via to a prospective customer. An offer must always be in writing. In case, a customer invites you to meet him at his place during the year, do not turn down such an invitation and be prepared for discussions about price or other delivery conditions. 62

63 Turnover, promotion and sales material For the first and the following years, the turnover for a successful launched item should be defined together with the customer. This can ensure and eliminate problems and discussions when it comes to unsatisfactory sales. For the product launch, German traders expect a sales promotion support with a discount of about 8-12 % for four weeks or the first two orders. Usually, they will also reduce their mark-up margin about ~5 %. In addition, you should, in the introductory phase, provide your customers with samples for their most important customers, written information sheets with sales arguments for both traders and consumers. Furthermore, as a matter of course, send or fax regularly, always automatically send your organic certificate after re-certification. Being well prepared for selling food to German traders means preparing sales material, like it is usual in Germany. In the appendix you will find some examples of sales material. Often sales material is provided in a nice folder. Generally, sales material for German traders consists of: product list: a high quality print, not including prices, only important and interesting product information and photos see appendix, product flyers in German: a high quality print with consumer information about your company and its products, and in the case of industrial customers also product specifications in German (necessary details for processing if a trading company asks for product specifications, find out what kind of information is needed), price list: general or individualized for specific customers, with similar information as in the product list, but without photos and of course with price (free delivered and valid until ) and price differentiations referring to quantity, with payment and transportation terms, shelf life, order lead time etc. see appendix, logistic data sheet: with all information the trader needs to handle your products correctly (product weight and dimension, required storage temperature and conditions, shelf life, order and transportation information, EAN-code for packaging and unit, no prices see appendix, 63

64 organic (re-)certification: always automatically send your re-certification to your customers. samples: a must at fairs and in the introductory phase, and when a customer shows interest in your products via phone or mail contact, at trade shows always offer taste samples never send old samples, ensure personally that the samples are fresh (latest packaging with best shelf life possible), correctly labelled and undamaged (also valid for the packaging!) and make sure the customer s address and name are written correctly, a few days after sending, contact your potential customer! You do not need all documents from the beginning of a new customer relationship, but be prepared to offer them. Brand differentiation between organic retail and conventional retail Like many of the traditional German organic producers/manufacturers like e.g. Allos, Davert, Bauckhof, Rapunzel etc., foreign suppliers should offer different brands to the organic retail and the conventional retail. Organic wholesalers and organic retailers do not want to see their brands in conventional supermarkets! It leads to discussion and might result in cleared stock. They have different margins and therefore up to 30 % higher consumer prices. Organic retail offer versus conventional supermarket offer: Pesto of Rapunzel (organic retail) and BioGourmet and chocolate of Vivani (organic retail) and Björnsted 64

65 Food Service ( Außer Haus Verpflegung (AHV) referring to Außer-Haus-Verzehr out of home ( OOH ) consumption) Food service is a dynamic and strongly growing market sector in Germany which just over the past years (~2004) started to enter deeper into the organic market and increased its organic sales with growth rates in two-digits. The market share of that sector is not included in the sales statistic of organic food. That sector is not yet as well researched as the rest of the organic market and rarely included in the organic market estimations. In 2009, market experts estimated an organic food service sector turnover of about nearly 300 million Euros. Assuming two-digit growth in the last years, that still accounts roughly for about 5 % of the organic food market sales in 2011, but not even about 0.5 % of the food service turnover with estimated 70,000-80,000 million Euros in These figures show that there is still major potential, although bio in the food service channel shows a two-digit growth rate for the past years. Compared to other European countries, the German structures in the bio food service sector are relative good and every food service company should easily find information how to bring bio into its kitchen. Since 2009, food service companies that want to promote their organic food in Germany must be bio certified according to German organic law. 2012, a consulting company estimates, that about 2,000 food service companies are bio certified covering nearly 2,300 kitchens altogether. But there are still many food service companies which use organic products but that are not bio certified. The part of the bio certified kitchens is only estimated at about one third (out of estimated 6,000 bio kitchens). Since 2010, Bioland and the Bio-Service Team have organised a yearly Bio-Gastronomy congress gathering all food service players for information and discussion issues. 65

66 The food service sector in Germany covers canteens, hospital and home kitchens, university refectories, school and kinder garden kitchens as well as catering and the gastronomy of hotels, restaurants, cafés, bistros, coffee shops and the system gastronomy. The kitchens partly use 100 % bio products; often just single meal components are bio or the kitchen offer one bio-food-line. A growing number of restaurants, cafés, bistros and coffee shops focus on bio and fair trade coffee, which has resulted in a strongly dynamic and growing fair trade sector as well (the fair trade volume in food service has quadrupled since 2004). But not only coffee, also fair trade spices, wine, rice, ice cream, bakery products, sweets and nuts are offered. Also the part of bio convenience food in the food service sector is growing. Percentage of the bio food value out of the total food value in food service companies % 50 % % 20 % >50 % 30 % The financial crisis in 2008/2009 mainly hit the hotel sector which is now recovering due the general financial recovery, but also due to the recently lowered value added tax of that specific business. Recently, Bio-City-hotels, like the Bioland Hotel and Schanzenstern in Hamburg, and pure bio fast food restaurants (only a few successful), like Pick a pea in Köln or Supergood in Berlin, as well as many bio bistros as supplement to a bio supermarket, emerged as new trends in the food service sector. A rising sector is also the school catering sector, due to the increasing number of full-time schools demanding often more than 10 % bio food. 66

67 Customers: Food service research shows that large canteens (of companies or public authorities), large refectories of student unions and large cook&chill kitchens/caterers are currently the main users (measured in quantity) of bio food in the food service sector. But also quite a number of companies within the system gastronomy and many hotel restaurants, especially Gourmet kitchens, are increasingly using bio food. Many of these kitchens prefer, at least for fresh products, regional suppliers. Hospital and home kitchens are usually stronger under price pressure, but nevertheless there are also some examples; rather the ones with guests staying a long time, like for instance the LWL clinics. Some of the first large movers like Ikea and Deutsche Bahn with its system gastronomy restaurants are still part of the key customers for bio in the food service sector. Furthermore, some large company canteens, like HDI Gerling (2,000 meals, ~100 % bio), Hipp Werk (500 meals, 100 % bio), Esprit Europe (Ratingen, up to 60 % bio, ~800-1,000 meals), Versicherungskammer Bayern (up to 2,000 meals % bio) and VW belong in the most important kitchens using bio food; but the VW restaurants are operated by the catering of Möwenpick. Also student refectories especially in North Rhine Westfalia and more and more school kitchens are part of the key 67

68 customers with up to 75 % bio food, e.g. Köln (7,000 meals, 10 % bio), Osnabrück (8,000 meals, 30 % bio) and the Mensaverein Gesamtschule Ronsdorf (1,950 meals, 75 % bio). Worth mentioning is also the HGK ( Hotel- Gastronomy-Kauf e.v. ), since this is a purchase cooperation of 2,500 hotels and restaurants with bio consulting for its members. They are mainly delivered by the bio food service wholesale EPOS Biopartner Süd. Last but not least, a few large conventional caterers (e.g. Ararmark (recently MSC certified, Apetito) and a few organic caterers (e.g. Biond and Wackelpeter (2,300 meals, 100 % bio) belong among the key customers. Suppliers: Caterers (top 40 ~ 3bn Euro net turnover) are no longer only customers in the food service sector; they increasingly also function as suppliers for medium-sized kitchens of companies ( meals), public authorities, schools, universities, kindergartens, bistros etc. Big kitchens decreasingly cook their own meals; often they only warm up full meals or combine different ready components. The demand for organic meals often depends mainly on the philosophy of the company or the school etc. For instance Waldorf schools and kindergartens all offer bio food, so do companies which support strong sustainability aims in their philosophy. Catering companies often widen their product range with imported bio products. Generally, the procurement of bio products of the food service companies has changed. Organic wholesalers are no longer the only suppliers. Besides the already mentioned catering sector, increasingly also conventional wholesalers as well as some organic (like Naturata, Rapunzel, Davert, Söbbeke, Andechser etc.) and conventional manufacturers (like Edna, Nestle, Bonduelle etc.) offer bio food to the food service sector. In addition, contracts with regional producers and bio bakeries and butchers are gaining importance. 68

69 There are quite a few regional organic wholesalers and a few national organic wholesalers that supply the food service sector (listed and marked in the appendix). In addition, some specialised wholesalers focusing on food service have been established. The most important organic wholesalers for supplying the food service companies are presented in the table; the market leaders seem to be EPOS and HÖP. The large conventional wholesalers within food service do currently not show much bio engagement; market experts estimate one per mill of the turnover of the large ones. But it can be assumed that it is growing with a further increasing trend for bio in the food service market. As far as known, Mibusa is the only conventional wholesaler within food service and with a strong organic focus. 69

70 The key national conventional wholesalers within bio food service 2011 Company www Rewe Food Service Service-Bund Metro C&C Mibusa AG Special profile >1bn turnover (2011), largest specialist supplier of the food service sector, only about 40 bio products found on web, focus: bakery products, fish, convenience, own Food Service fair ~760m turnover (2011), 50 bio products, bio brand Easy Bio, focus: frozen portioned convenience food ~30bn turnover Metro Group with 5.7bn C&C (2011), extra own brands for the gastronomy: Rioba specialities for bars and cafés, fine food finestro with ~ 90 gourmet products Kingfish, Bison meat, special high quality burgers etc. 25m Euro turnover (2010), conv. wholesale with strong bio focus, strategic alliance with organic wholesale Phoenix, delivery to catering & gastronomy, deli and organic retail, bio-certified Wirthgen based on own research, expert interviews and Biohandel, internet and LZ (tradedimensions statistic) The food service sector as a channel for organic producers and manufacturers is especially interesting for suppliers that are experienced in this sector. Apparently, this channel is one of the most price sensitive ones in Germany, while the gastronomy sector is less price sensitive than big kitchens at hospitals, homes, schools and kindergartens. 70

71 Appendix Historic review of the German organic food market The beginning of organic agriculture traces back to Rudolf Steiner. In Silesia in the 1920 s, he discussed with large farms his idea of circuit agriculture. This was the start up of the first alternative agricultural method, the biologic-dynamic agriculture. The first bio-dynamic food produced was sold at farm gates and weekly markets. Nowadays, this organic production method is used worldwide and its products are known under the brand name Demeter. The second oldest organic production association is ANOG, founded in 1962 and producing controlled biological products. At the beginning of the seventies, the alternative production method organicbiological agriculture with its well-known brand Bioland was developed. Further similar organic production methods followed between 1979 and 1996 with the brands Biokreis Ostbayern, Naturland, Ecovin, GÄA, Biopark and Ecoland. In 1988, the AGÖL (Arbeitsgemeinschaft ökologischer Landbau) was founded and set some common minimum standards for organic agriculture. These standards were more stringent than those laid down in the 1992 guidelines of EU regulation 2092/91 (replaced by EG 834/2007), which is the base for the founded national Bio-Siegel in 2001, and the EU-logo, prescribed for organic products since summer In 2002, the AGÖL was cancelled, and the BÖLW Bund für ökologische Lebensmittelwirtschaft was established. This organisation supports the development, quality assurance and the interests of the whole organic food economy (production associations, traders and manufacturers). Today,it is the umbrella organisation of all 9 organic producer associations, the association for organic manufacturers (AOEL) and the union of organic products (BNN). The BNN is a traditional union, first only for traders, nowadays for traders and manufacturers, which supports the traditional organic trade against the conventional trade. The AOEL members are mainly 71

72 strong organic manufacturers, partly conventional manufacturers with an organic line and even an organicaffine conventional regional trader (tegut). It pursues similar aims as the BÖLW and supports the exchange. Its members account for nearly 30 % of German sales of organic food. Currently, the members are mainly German, but it is open to all European manufacturers. The first organic shops and regional wholesales were founded in Before that, so-called food-co-ops (consumer groups) appeared, as well as co-ops between producers and consumers. For all participants, the reason for their involvement was idealistic. Profit was frowned upon by the organic pioneers. The growth of production, the demand for organic food and, later on the strong increase in demand, was supported by consumer trends, pushed by the Chernobyl disaster (1986) and food scandals, the political framework, but mainly strengthened by the increasing network of wholesales, and the entrance of the conventional food trade in the organic market starting in the mid-eighties. It was years before the first bio corner in a conventional supermarket appeared, over the start of the own bio retail brands with only some items up to today s bio range of some 100 items. A further push, resulting in a two-digit sales growth, was driven by the implementation of the German Bio-Siegel in 2001 and mainly by the entrance of discounters in that market. Both were viewed critically by many players in the organic market due to the fear of price pressure, image problems, etc. At the beginning, the organic market was for a long time a very small niche market (about 1 % market share of the food sales in the 1980s); the competition was low and the prices high. Of course prices fluctuated as a result of the development in supply and demand. In the eighties, the demand was stronger than the supply, in the nineties this situation reversed (due to strong federal support); and since around 2000, demand dictates the prices again. When the large supermarket chains implemented their own organic retail brands, the prices could not cover the costs. Today, the prices are relatively low, particularly due to the increasing number of imports. Since 2007, the conventional food trade makes higher sales on organic food than the traditional organic trade. This is quite late compared to other European countries. The organic market now has a market share of 3.7 % of the whole food sales. 72

73 Schedule of fairs 2013 Biofach, Nuremberg 2,500 exhibitors Anuga, Cologne 6,000-7,000 exhibitors Organic: 1,000 exhibitors BioNord, Hannover exhibitors BioSüd, Augsburg exhibitors BioOst, Berlin BioWest, Düsseldorf Next Organic Berlin (Bio Messe Berlin), Berlin, Tempelhof (~200 exhibit.) BioGastrocongross, Berlin, München & others Internorga, Hamburg 1,100 exhibitors 13-16th February 5-9th October 6th October (new, 3rd time) 15th September (new, 3rd time) 28th April (new, first time) 14th April (new first time) 26th May (new first time in 2012) October not yet published 8-13th March Leading world organic trade fair for food, complemented by Vivaness for clothes & cosmetics Leading world wide largest, international food fair with one extra part for organic food and one for food service, etc. (10 trade shows, under one roof) Regional trade show for the northern German traditional organic business, incl. food service (bio gastro) & Reform -world, mainly German exhibitors Regional trade show for the southern German traditional organic business, incl. food service, mainly German exhibitors New regional trade show complementing Bio Nord & South New regional trade show complementing Bio Nord & South also interesting for the Benelux countries New fair for regional (east & central Germany) & international manufacturers & distributors of social-organic trendsetting products & wellness, incl. food service Focus on organic food service, more congress than fair, focus on presentations & discussions, but incl. a product mile as well as exhibitors, organised by Bioland, info@bioserviceteam.de Leading international fair for food service, no special organic focus There are also house fairs of the Rewe Foodservice and many organic wholesales, like e.g. Weiling, with ~ exhibitors, which deliver exclusively to the specific wholesaler. Worth mentioning is also the Grüne Woche in Berlin (consumer fair). 73

74 Your Logo Blank product list: Produktübersicht GV/Catering Tk -Backwaren A. Bio-Roggenbrote RLZ 270 Tage (Lagertemperatur : -18 C) Vorbereitung: 1= ungegart, 2= vorgegart, 3= vorgebacken, 4= fertig gebacken Bild Art-Nr. Name Gewicht g Vorbereitung VPE VPE/ Pal Bio-Roggen-Vollkornbrot Bio-Dunkles Roggenbrot Bio-Dinkel-Roggenbrot B. Bio-Frischesuppen RLZ 28 Tage (Lagertemperatur : +2 bis +5 C) Bild Art-Nr. Name Gewicht g Vor-bereitung VPE VPE/ Pal Tomaten&Basilikum Suppe 500 past Your address 74

75 Blank price list: Preisliste, Handel Tk -Backwaren (Lagertemperatur: -18 C) Your Logo A. Bio-Roggenbrote Art-Nr Name Gewicht g RLZ bei Lieferung VPE VPE/ Pal Preis EUR/ Stück Bio-Roggen-Vollkornbrot Tage , Bio-Dunkles Roggenbrot Monate , Bio-Dinkel-Roggenbrot Jahre ,89 Die Preise verstehen sich netto frei Lager Westdeutschland Ab 1 Palette Gesamtmenge Mengenstaffel: ab 3 Paletten 2 %, ab 5 Paletten 4 % Bestellvorlauf: 5 Werktage Öko-Kontrollstelle: DK-010 Ø Zahlungsbedingungen: 30 Tage netto oder 7 Tage mit 2 % Skonto Bestellung per Fax an: (contact data of order-responsible person in your company) See to it that the layout of your pricelist and your invoices correspond. That makes your customer s bookkeeping easier. 75

76 Your Logo Your address and contact data of person responsible for logistics Blank logistic data: Logistik Daten Art.-Nr Name Gewicht netto/ brutto EAN EAN- Umkarton Stück pro Karton RLZ bei Lieferung Maße Artikel H x B x D(cm) Palletierung Kart./Lage Kart./Pal Höhe der Pal cm 123 Bio-Produkt mit Vollkorn 456 Bio-Produkt mit Körnern 789 Bio-Produkt mit Sesam 160 g 180 g 140 g 160 g 140 g 160 g Monate 4,4x22x11 10/ Tage 12,5x3x11 10/ Jahre 10x2,5x11 10/ Mindestbestellmenge: 1 Palette Mischpalette möglich. Der Bestellvorlauf beträgt 7 Tage, da alle Produkte auf Bestellung frisch hergestellt werden. Lagerung trocken bei Zimmertemperatur (20 C) 76

77 Main food discounters 2012 Company www Address Phone, Additional information Aldi Nord Essen Eckenbergstr North & East Germany, partly West Germany, >30 organic items, organic brand Gut Bio Aldi Süd Mülheim/Ruhr Burgstr. 37 Fax: West and South Germany 1780 outlets, 850 items, >60 organic items, brand Bio Lidl (Schwarz- Group) Neckarsulm Rötelstr Main competitor Aldi, ~40 organic items, own brand Biotrend Netto Marken-Discount (mainly Edeka) (Netto-Stavenhagen is a different company) Maxhütte-Haidhof Industriepark Ponholz 1/ info@netto-online.de North, South & East Germany, 70 % Edeka, 30 % Tengelmann, fusion: Plus changed to Netto, ~125 organic items, retail brand biobio, 3,915 outlets Norma Nürnberg Heisterstr. 4 (Fax: ) Kontakt-Formular-Internet@ norma-online.com Integration of regional brands, up to 170 organic items bio Sonne, organic price winner: Ein Herz für Bio (very good organic offer), (South & East Germany) Penny GmbH (Rewe Group) Köln Domstr impressum@rewe-group.com 2,060 outlets, ~90 organic items Naturgut, Aktion 2010 Ein Herz für Kinder 77

78 Biggest conventional national food retail & wholesale without pure discounters 2012 Company www Address Phone, Additional information Edeka Zentrale AG & Co.KG Hamburg New-York-Ring info@edeka.de Purchase Cooperative, 12,000 outlets, 2,000 organic items, Edeka Bio, 4,500 independ. traders, Netto Marken-Discount Kaufland Warenhandel Neckarsulm Rötelstr info@kaufland.de Schwarzgruppe, self-service warehouse, >100 organic items, own brand K-Bio Lekkerland Frechen/Köln Europaallee info@lekkerland.de Wholesale for sweets, delivery of kiosks, garage forecourts etc., brand Vitalness a.o. 50 organic items Metro Düsseldorf Schlüterstr kontakt@metro.de Metro Cash & Carry, Real, Media Markt, Saturn, Galeria Kaufhof Real SB Warenhaus GmbH Mönchengladbach Reyerhütte info@real.de Warehouse chain, organic brand real Bio, 700 organic items, 2009 Extra- Märkte sold to Rewe REWE Markt GmbH Köln Domstr impressum@rewe.de Purchase Coop, 3,000 independent traders, 11,500 shops, ~350 organic items incl. 50 own brand REWE Bio, based on Naturland REWE Dortmund Großhandel eg Dortmund Asselner Hellweg Joerg.petzke@ rewe-dortmund.de Wholesale regional, the only independent one of Rewe, 300 independent traders, 520 shops Tengelmann Mülheim/Ruhr Wissollstr Kaiser s+tengelmann supermarkets (& other non food markets), 300 organic items, own brand Naturkind + Basic 78

79 Organic Wholesale 2012 I (Source: Biowelt Karsten Runge and internet) (MD: Management director, D: Dry food, F: fresh food, DF: deep frozen, regio: regional products first choice, Echt bio : special marketing concept) Company www Address Contact phone, Contact person Region of Delivery Assortment stockroom Additional information Biogarten Hilden Liebigstr. 1A, arndt@biogarten.de D: Susanne Arndt Germany, Austria, Italy, Netherlands 10,000 items Tea, makrobiotic, gluten-free 5,000m 2 food, drugstore-markets Bio Korb Modautal Darmstädterstr post@bio-korb.de MD: Andreas Burk Germany 4,000 items 1000m 2 small wholesaler for small orders, supplementary organic animal feed, food service Bodan Naturkost Überlingen, Zum Degenhardt michael.beer@ bodan.de D: Siegfried Roth F: Helene Wetzel DF: Damian Ferk South-Germany parts of Austria >8,000 items Regio marketing + Echt 5,400m 2 bio, brand greenorganics, focus on small retailers, no delivery of chains >5 outlets, food service via EPOS Chiemgauer Naturkosthandel Unterreit- Grünthal Gmein buero@ chiemgauer.com D+MD: Fritz Huber F:Rudolf Paulini South Bavaria parts of Austria 9,000 items Partner Demeter, 2,000m 2 Regio-marketing, food service via EPOS Dennree Naturkost Töpen Hoferstr zentrale@ dennree.de D: J. Schinnerling F+DF: K. Ortlepp- Sachsenweger Germany, Austria Luxemburg, North- Italy >10,000 items, Biggest wholesaler, Biomarkt marketing coop w. 45,000m retailers, supplying togehter 1,300 shops EBL-Naturkost de Fürth Am Grünen Weg ebl@ebl-naturkost.de MD Gerhard Bickel Franken/Bayern 5,500-6,000 items 21 own outlets & own butcher, regio-oriented, Demeter assortment EPOS Bio Partner Pliening/ Landsham, Gewerbestr info@eposbiopartner-sued.de MD Hermann Oswald Bayern & Germany via Biopartner 8,000 items, 1,400 m % food service, network: Bodan, Chiemgauer NK, Pax an, Willmann 79

80 Organic Wholesale 2012 II (MD: Management director, D: Dry food, F: fresh food, DF: deep frozen, regio: regional products first choice, Echt bio : special marketing concept) Company www Address Contact phone, Contact person Region of Delivery Assortment stockroom Additional information Gebrüder Franz Völklingen- Wehrden, Vorderster Berg info@ gebrfranz.de D+MD: Gregor Franz South-West Germany, Els.- Lothringen, Lux 4,600 items Small wholesaler, regiomarketing+ Echt Bio, 2,000m 2 brand greenorganics, pilot bio shop, food service Grell Naturkost www. grell.de Kaltenkirchen Feldstr. 3b info@grell.de D: R. Broitzmann F+DF: Th. Kölker Drug: Gabi Hippel North-Germany, Mecklenburg- Vorpommern, Sweden, Denmark 8,000 items Partner Demeter+ Bioland, 5,500m 2 Echt Bio + regio-marketing, own brand for dry food, food service Handelskontor Willmann Vaihingen/ Enz Tafingerstr info@hakowillmann.de D+MD: Gottfried Willmann North of Baden- Württemberg 1,400 items Coop-partner Pax an + Claus- 2,800m 2 Pural, Regio-marketing + Echt Bio, fresh food focus, food service via EPOS HÖP Bioprodukte Ostercappeln-Borgwedde, Borgwedderstr info@hoepbioprodukte.de MD: Martin Laer Germany Scandinavia Full assortment for food service Biggest supply for industry, big bakeries & food service Kornkraft com Großenkneten-Huntlosen, Am Forst info@ kornkraft.com MD: Sabine Moeller- Schritt D: Hartmut Rebers F: M. Schröder Niedersachsen, Bremen, North of Nordrhein Westf. >9,000 items Marketing: Bio von hier 4,700m 2 10 von uns food service Landlinie Hürth An der Hasenkaule mueller@ landlinie.de MD: Friedr. Müller F: Ines Abeln NRW, Rhein-Main Bayern 2,000 items Fruits & vegetables predominante 2,700m 2 Midgard Berlin Lise-Meitner-Str post@midgardnaturkost.de D+F+MD: Klaus Bartels Berlin, Brandenburg Mecklenburg- Vorpommern Full assortment Focus Demeter- and Reform items, regio-fair marketing 80

81 Organic Wholesale 2012 III (MD: Management director, D: Dry food, F: fresh food, DF: deep frozen, regio: regional products first choice, Echt bio : special marketing concept) Company www Address Contact phone, Contact person Region of Delivery Assortment stockroom Additional information Naturkost Elkershausen Göttingen Levinstr info@naturkostelkershausen.de MD: Herrmann Heldberg F. Andreas Vier DF: Herw. Leben North Germany Bielefeld Marburg/Fulda Dresden/Erfurt >8,000 items >5,000m 2 Coop with NK Erfurt, regiomarketing Echt Bio + partner concept Bio+ Friends, brand greenorganics, food service Naturkost Erfurt Erfurt Mühlweg info@natur kost-erfurt.de MD: Thomas Hölscher Thüringen, Sachsen, South Sachsen- Anhalt 8,000 items, Coop w. Elkershausen, 3,500m 2 regio-marketing + Echt Bio, food service Naturkost Kontor Bremen, www. naturkost-kontor.de Bremen Am Waller Freihafen info@naturkostkontor.de MD: Wilfried Schaffer Bremen Oldenburg Hannover 2,500 items Coop of 5 farmers, 2,000m 2 focus fresh items, many regional items, food service Naturkost Nord Seevetal Am Bauhof info@naturkostnord.de D+MD: Mathias Deppe Northern of Germany 3,380 items Demeter and regional focus, 3,000m 2 brand greenorganics, many fruits& vegetables, big food service Naturkost West Duisburg Daimlerstr info@naturkostwest.de MD: Andrée Mols F: Georg Erhardt DF:Chr. Peraic NRW Rheinland-Pfalz Saarland 6,000 items Demeter-partner, 10,000m 2 marketing: : Bio in Aktion, 3 own shops, brand greenorganics, food service Ökofrost Berlin Bregenzerstr info@oekofrost.de MD: Florian Gerull, Boris Czizikowski Germany, partly foreign countries (spec. conditions) 150 items (for retail) Small wholesaler, frozen products only, brand for gourmets: Biopolar Ökoring www. oekoring.com (incl. Zaich & Woar) Mammendorf Dieselstr zentrale@ oekoring.com D+MD: Thomas Börkey-Biermann F+FD+MD: R. Dax Süd-Bayern Salzburger Land Südtirol >8,500 items Marketing: 5,300m 2 BioRegional + Ich mag`s Bio, food service 81

82 Organic Wholesale 2012 IV (MD: Management director, D: Dry food, F: fresh food, DF: deep frozen, FV: fruits& vegetables, regio: regional products first choice, Echt bio : special marketing concept) Company www Address Contact phone, Contact person Region of Delivery Assortment stockroom Additional information Pax an (coop with HK Willmann) Engstingen Raiffeisenstr info@paxan.de DF: A. Pedretti F+D+MD: Heinz Beck Stuttgart Baden-Württemberg >8,000 items, Demeter partner, regiomarketing, supplies no 3,000 m 2 supermarkets, brand greenorganics, food service EPOS Phönix Naturprodukte Rosbach Siemensstr phoenix@ phoenixbio.de MD: Klaus Tröger MD: Michael Welzenbach Frankfurt + environment Rheinl.Pfalz Nordbayern >7,000 items, Demeter partner, regiomarketing + Echt Bio, 3,600m 2 brand greenorganics, EMAS - audit, food service, strat. coop w. conv. Mibusa AG Pural/ Claus-Pural Baden- Baden Kiefernstr info@pural.de MD: Ulrike Claus MD: Heinz Claus Germany France, Austria, Switzerland >18,500 items Focus Demeter+ Reformhaus, brand: Pural, Coop 11,400m 2 with Basic Rinklin Naturkost Eichstätten, Bruckmattenstr a.rinklin@rinklinnaturkost.de MD:Wilh.Rinklin D: Jens Laszlofy F: Armin Rinklin South-West Germany, Alsace 7,000 items Regio-marketing + 5,500m 2 Echt Bio, own brand green, food service Terra Naturkost Berlin Gradestr info@terra-natur.de D: Annette Engel F: Kerstin Henkel DF: Kerstin Henkel East Germany >10,000 items Demeter partner, regiomarketing + 10,000m 2 Echt Bio, brand greenorganics, food service Weiling Coesfeld Erlenweg sandra.malinowski@ weiling.de D: J. Nockemann F: San. Malinowski FV: Sascha Hinkes Germany without Berlin, Brandenburg >11,000 items 16,000m 2 Coesfeld +17,000m 2 Lonsee >850 customers, 1 organic shop, own brand Bioladen 82

83 Organic supermarket chains 2012 I (MD: Management director, regio: preference for regional products) Company www Office Phone, Contact person Region Outlets Additional information ALECO GmbH Alnatura Basic Bio Company Sottrum- Bremen info@alebio.de Bickenbach info@ alnatura.de München info@basic-ag.de Berlin einkauf@ biocompany.de BioFrischMarkt Saarbrücken bfmeva@aol.com Dennree Dennn s Biomarkt ebl-naturkost Töpen, Hofer Str. 11 Nürnberg- Fürth info@denns.de ebl@ebl-naturkost.de Erdkorn Hamburg info@erdkorn.de Georg Appel Birgit Neumann MD Dr.Götz Rehn PR Frau Neumann MD Stephan Paulke, Gerhard Sailer MD Georg Kaiser, Hubert Bopp, Mr. Pundt Bremen a. o. 9 Delivery service online, marketing alliance with Dennree Germany South-East Europe via dm Germany Austria Berlin Hamburg Dresden 72 Own wholesale, ~3,300 stores, 7 coops with conv. retailers (Tegut, dm, Hit, Budnikowsky, Globus, Migros, Cactus), 6,000 items in own outlets, 1,065 items own brand Up to 10,000 items, >300 own Basic brand, bistro, coops with Feneberg + Tengelmann Regional market leader in Berlin, 8,000 items, good bistro concept, prices competitive MD Siegfried Leimroth Saarbrücken 8 with trainingscentre, BiomarktCard, bistro, delivery service MD Thomas Greim Germany Austria Own wholesale, <6,000 items, regio-orientated for its fresh& bread range, 350 own brand, marketing alliance with 280 bio shops (www. biomarkt.de) MD Gerhard Bickel Franken/Bayern 21 Own wholesale, regional, own bio butcher, <6,000 items, best service quality (DISQ 2012) MD Samir Besic Hamburg and other cities 9 Regio-orientated, 2,500 items, Feng- Shui shop, low prices 83

84 Organic supermarket chains 2012 II (MD: Management director, regio: preference for regional products) Company www Office Phone, Contact person Region Outlets Additional information FVS Biomarkt Landmanns www. Landmanns.de LPG Biomarkt Naturgut SuperBioMarkt www. Superbiomarkt.de Rewe-Regiomarkt- Temma Vier Jahreszeiten Viv BioFrische Markt, de VollCorner Biomarkt Pfaffen hofen Berlin- Kreuzberg landmanns.de Stuttgart naturgut.de Münster biomarkt.de Hürth Bad Honnef Berlin München vollcorner.de MD Dr. Eva-Maria Troidl Bayern 6 Focus: Bio für Genießer (hedonic) + Bio-Delikatessen (deli), fresh + regional MD Werner Schauerte and Ludwig Rieswick MD Nikolaos Tsiris Bogdan Ateescu MD Michael Radau Martin Kintrup Berlin 6 Shops with up to 1,600m 2, <18,000 items, fair-regio-charta in the region, good gastro concept Stuttgart and environment Münster, Düsseldorf, Osnabrück area 8 Regio-orientated, marketing alliance with Dennree ( BioMarkt -group), second best service-quality 17 Regional market leader, <7,000 items, 1 outlet bio-to-go MD Christiane Speck Köln/Düsseldorf 3 Retail + ambitious gastro concept, >5,000 items, 300 items own Rewebrand, fresh+ regional MD Michael Stammnitz MD Ulrich Unbekannnt, StefanBuschek Joseph Nossol MD Willi Pfaff + Birgit Neumann Germany Ruhrregion 3 (2 planned) recently expanded and awarded retail + gastro concept, 5,000 items, large bistro 50 places, own kitchen, fresh food to affordable prices Berlin 9 Subsidiary of Dennree, glutenfree partnershop of Bauckhof, fair-regiocharta in the region München 10 Marketing alliance with Dennree, Demeter and regio- orientated, third best service quality 84

85 Special thanks for providing expert information and figures: M. Rippin (AgroMilagro), Prof. Hamm (Universität Kassel), A.C. Nielsen, H. Heldberg (Naturkost Elkershausen), BNN (Bund für Naturkost u. Naturwaren), R. Roehl (a verdis), H. Oswald (Epos), neuform, B. Kape (BLE), Danish Food Supply Consultant Food Manager F. R. Voss establishing ROOTS in the German organic food market Text: English check: Layout and print: Editor: Dr. Antje Wirthgen, Dr. Bernd Wirthgen ( Dr. Martin Hewitson, Karin Coles Werkstatt Verlag Göttingen Malene Aaris For more information about Bio aus Dänemark visit: Malene Aaris: All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the editor. This project has been supported by the Danish Ministry of Food, Agriculture and Fisheries and by the EU in accordance with the regulation on subsidies for the purpose of informing about and marketing food products bearing a quality label. 85