Organic Products with Potential: Research Project Examines Market Shares

The sales of the organic food industry are rising steadily – but there is still plenty of room for improvement. A research project at the University of Kassel is investigating which product groups still have potential and how to persuade buyers of conventional variants to buy organic food.

In recent years, the German organic food market has seen a significant increase in turnover. While in 2000, sales were still 2.1 billion euros per year, by 2019 they had already reached almost 12 billion euros, around 1 billion more than in the previous year. A recent GfK study has shown that the share of organic products in household expenditure on food and beverages has almost doubled in the last ten years, from 3.2 percent in 2009 to 6 percent last year. And demand continues to rise, particularly for fresh food. Here, the market share of organic food ranges from around 7 percent (fruit and vegetables) to 15 percent (eggs). Milk, yoghurt & co. are also doing well at 10 percent. The largest share – about two thirds – of organic food is sold in food retail outlets, although the trend towards more regionalism is also reviving the weekly markets – this is where sales of organic food rose most strongly last year.

Confectionery and cheese below average

According to GfK, 96 percent of households have chosen an organic product at least once in the past year – so acceptance is there. Nevertheless, there is still plenty of room for improvement. This is because the largest shares of sales are distributed among the organic classics mentioned above. Which products and product groups promise further potential? A research project at the University of Kassel (Department of Agricultural and Food Marketing) headed by Prof. Dr. Ulrich Hamm is looking into this question. Since 2016, purchasing data from 13,000 households from GfK household panels has been closely examined and evaluated.

The first results are already available: For example, the researchers have discovered that although dairy products are among the bestsellers on the organic food market, cheese is far below average at just 2.6 percent. The share of organic sweets is even lower, accounting for less than 2 percent of total sweets sales. What is the reason for this – and above all: How can this be changed? The people in Kassel are also trying to answer these questions. They are not only researching real purchasing data, but also customers’ purchasing motivation.

Gratification trumps health

The statistical average buyer of organic products attaches importance to environmental protection, fair products, sustainable consumption, regionality, health and naturalness. In the case of sweets, it was shown that, since organic buyers attach importance to health, they generally buy something to snack on less frequently, but are prepared to reach for organic sweets in the rare case of a purchase. And vice versa: Buyers of conventional sweets place less emphasis on health aspects and more on the feeling of gratification – and have other priorities when they treat themselves to something sweet. “The attitudes of a typical candy buyer are therefore contrary to the attitudes of an eco-buyer.

This could be an explanation for the still small market share of organic sweets”, say Hamm and his colleague Dr. Isabel Schäufele, who is the project’s contact person. The researchers were also able to derive very concrete recommendations for action from their results to date: “In order to increase the purchase of organic sweets, it is recommended, especially on the producer side, to communicate health-related attributes such as ‘free from’ (e.g. sugar, gluten or lactose).”

Focus on ethical aspects – and enjoyment

The investigation of cheese purchases also brought interesting facts to light: The typical organic buyer attaches importance to regionality – but makes an exception for cheese. “The importance of international specialities in cheese as a whole seems to overshadow local/regional production,” the people of Kassel summarise and recommend offering organic cheese specialities from other countries. “The focus of communication should be on pleasure aspects in addition to ethical attributes”. They see potential especially in the customers over 60 years of age – in contrast to organic sweets. Here, retailers and producers should focus on younger consumers.

The project, which is funded by the Federal Ministry of Food and Agriculture, will run until December 2020, by which time, results and recommendations for further products should be available. However, the experts have already made the following general statement: “The purchase of organic food is largely determined by ethical motives. In order to attract new organic buyers and to increase the purchasing intensity of existing organic buyers, the experts are already certain: “The purchase of organic food is largely determined by ethical motives. In order to attract new buyers of organic food and to increase the buying intensity of existing buyers, the various players in the organic market should therefore place additional ethical aspects, such as environmentally friendly packaging or fair trade, at the centre of consumer communication.”