Sweden’s organic sales account for 9 percent of total sales value and are growing to share the lead with Denmark as the country with the world’s highest organic market share per the latest figures.
Ekoweb reports that Swedish organic retail food sales increased by 23 percent, up 2 billion SEK (GBP180 million), during the first half of 2016 compared to the same period in 2015. With purchases continuing at the same rate, the total retail trade value for 2016 will reach more than 21.7 billion SEK (GBP1.89 billion).
Sales growth is reflected across a broad range of different segments. During the year, the stores have also launched several new products, primarily under private label. The organic share of nine percent is calculated on the value, Ekoweb said.
The reported sales gains do not include restaurant/food service and public sector procurement which is estimated to be approximately 20 percent.
The supply of both national and international raw materials has allowed the stores to better maintain the continuity of the offerings, though there are still shortages in several sectors such as beef, eggs, chicken, fruit and vegetables and some dairy products. Several retailers have commented they could sell significantly more organic products if they were available.
The sector still needs to raise production in Swedish organic farming to further increase organic sales. This initiative started in 2015 and continues, said Ekoweb’s Cecilia Ryegård, "and even should the market growth slow we will still need additional supplies especially in beef, pork, chicken, and fruit and vegetables." In several areas, such as livestock, the Swedish organic lines appear cost competitive with imported goods. Companies are willing to develop more and new organic products, although there are still uncertainties to overcome when sourcing the raw materials required.
Major retail channels increase sales
The reported 9 percent organic share of the retail market includes Systembolaget (the government-run chain for beverages with more than 3.5 percent alcohol). Denmark shows a similar organic market share (+10 percent for the first half of 2016), according to Ekowebs' calculations and Danish forecasts.
Ms. Ryegård said that the output of organic sales during the remainder of the year would determine which country can claim to be number one in the organic world, a title the Danes have held for a while.
Organic sales at Systembolaget continue to steam ahead at a high rate, volume wise - 42 percent for the first six months in 2016. The organic share amounts to 11.2% by volume of their range. Ekoweb has concluded that the ecological value of the share is significantly higher than the ecological volume and calculates it to be16 percent, based on available statistics. Sales continue at the same level, with Systembolaget reaching organic sales of almost 5 billion SEK in 2016.
ICA sales rise by 15 percent
Market giant ICA, which accounts for just over half of all grocery sales in Sweden at the store level, reports continued increases, although no longer at the expansion rate of 40 to 50 percent experienced over past years. A growth decline to a level of 15 percent for the first half of 2016 is in part the result of limited availability of Swedish organic food, but also because of fewer new products launches during the year compared to previous years.
Sales at ICA continue at the same level, reaching nearly 7.8 billion SEK (GBP702 million) in 2016 for the main ranges. The firm also procured additional products locally for ICA's stores, per Ekoweb.
“Organic food sales have increased by about 25 percent during the past 12 months for the main assortment, said Maria Smith, the environmental manager at ICA. “We continue to see strong demand, with no signs that it will decline in coming years. We work long-term with Select echo, just as we also work to increase sales of Swedish food in the shops.”
Coop increases sales by 13.5 percent
Coop experienced additional gains of 13.5 percent, from its organic food sales the first six months of the year, reaching 3.4 billion SEK in 2016 (GBP306 million), based on Ekowebs calculations.
For the first semester, the firm achieved a sales share of 10.1 percent, per Anneli Bylund, the company's chief sustainability officer. Coop has also seen more e-commerce activity and expects to expand the range of organic products, both under their private label and with other brands.
Axfood sales up by 33 percent
Axfood's sales of organic foods also continue to expand well. The category experienced an increase of 33 percent during the first half of 2016 compared to the same period last year, with an organic share in sales of 6.7 percent (5.3 percent, 2015).
Axfood chain Hemköp is the fastest growing within the organic category. The proportion of total sales ended at 8.7 percent for the first half of 2016, compared to 6.6 percent for the corresponding period in 2015. Last year, Axfood increased its ecological range by around a hundred new products. This year it has added 60 new introductions. Per Ekoweb, sales continue at the same level in 2016 accounting to 2.2 billion SEK (GBP198 million).
“We have made long-term investments in organic products, and believe in increasing organic production in Sweden. Therefore, we also partner with Bliekobonde.nu,” said Åsa Domeij, sustainability manager at Axfood. “Sales have increased over a wide product range, in particular fruits and vegetables. The availability of organic food is a problem; there is simply too little.”
Bergendahls sales grow by 38 percent
In 2015 food sales at Bergendahl Food AB reached around SEK 12 billion (GBP108 million). The family-owned conglomerate includes retail chains City Gross, M.A.T, EKO, Matrebellerna, and Matöppet. Sales of organic food increased in the first half of 2016 by 38 percent, compared to the same period in 2015. "The strongest trend is fresh fish. Even the meat and bread trend looks good,” said Carola Grahn, ecology concept manager at Bergendahl. “We see growing awareness on sustainability issues. More and more people want to be able to make informed choices when it comes to ecology and health.”
Lidl increases by 10 percent
Lidl is a relatively new entrant in the growing Swedish retail market and is also making efforts to increase its organic food sales. The company offers a range of around 1600 items, just over 5 percent enjoying organic certification and annual sales of just over 0.2 billion SEK. Organic sales increased by 10 percent in the first half of 2016.
Per Katarina Rosenqvist, sustainability and communications, Lidl Sweden, the company keeps its focus on the organic category listing new products. The growth rate of over 50 percent experienced in the past two years dropped to a level of 15 percent increase in the first half of 2016, due in part to the limited availability of Swedish organic food, but also because of fewer new product launches compared to previous years.
The trend is clear. Swedish consumers are increasingly choosing organic foods. The reason for the significant sales increases is a growing health awareness among consumers. With more product availability, new product development, and better marketing the product offer will be better, and the organic category will continue to gain mainstream visibility.