Germany Leads the Way

Posted - May 12, 2008

Organic Supermarkets and Discounters Remain as Driving Forces in Germany

Introduction by Kai Kreuzer, BIO-Marktinfo

When Rudolf Steiner “invented” organic agriculture in the 1920s, he couldn’t have perceived what significance it would have in Germany some 80 years later. Today, Germany is the biggest European organic market, with a share of around 30% of all organic sales in the continent. Three percent of total food consumption is organic. Last year 16,800 farmers worked on 812,000 hectares of organic farmland. That’s almost 5% of the total agricultural surface. Germany recorded 4 billion Euro in organic sales in 2007, 15% more than the year before.

Based on its evolution, the German market can be divided into three categories: the pioneers, the small specialized shops and the conventional market. The first phase refers to the early 1920s, when concern for the side effects of industrialized farming was already evident. Farmers noticed the steady decline in their crops; some decided to follow the principles of Rudolf Steiner. Demeter and Reformhaus were among the first names to appear. During World War II, development came to a halt.

The first simple direct-marketing systems sprung up in the mid 1950s, when farmers began to sell their produce at shops and farmers’ markets. In the 1960s, there was moderate growth in organic farms belonging to the biodynamic Demeter association and the Bioland group, founded in 1971.

In the second phase, beginning in the early 1970s, specialized organic shops emerged. One of the first was the Erdgarten in Munich and Rapunzel in Augsburg, predecessor of today’s big importer and trader. Most organic wholesalers were founded during this period, due to demand from shops for regular suppliers. Shop owners drove to farms for wheat, potatoes, vegetables and fruit. Some drove to Italy in lorries to import wine and oranges! A structure of about 18 wholesalers was born which continue to do business today, largely delivering on a regional basis. Dennree, the only national distributor and now the biggest wholesaler with a yearly turnover of 230 million Euro, started in 1974.

After 25 years, about 2,500 specialized shops had been founded and the percentage of organic product lines continues to increase. The average retail space grew from about 25 m² to 100 m². These shops were still tiny compared to the supermarkets and shopping centers that had been developing at the same time.

The third phase began in 1998, with the foundation of the organic supermarket Basic in Munich, center of Germany’s organic lifestyle. Although Basic was not the first organic supermarket in Germany - about a half dozen others preceded it - none has enjoyed such enormous success. In the last 8 years, small retail chains have developed. In 2005, 60 organic supermarkets opened with a retail space between 200 and 1,000 m². Altogether, there are now more than 300 such stores, with 50 to 60 new ones cropping up per year.

Meanwhile, consumer awareness of organics grew thanks to the “conventional” mistakes of non-organic producers. Organic options moved into mainstream consciousness through food scandals, including hormones in calf meat. Soon organics were no longer considered fringe products for odd customers who wore eco-clothing, but instead developed an image as a choice for modern, sustainability- and future-oriented customers.

Seeing opportunity, big business entered the picture. In 2003, the discount-retail company Plus (2,750 shops) rolled out a modest range of organic products (30 lines) under their own label BioBio. Branchenprimus Aldi S