According to data by EHI Retail Institute, the organic food market in Germany was worth 9,48 billion Euro in 2016. Over half of this turnover - 5,45 billion Euro - was generated by sales of organic products in the conventional supermarket channel.
No other European country has such a wide range of regional and national organic supermarket chains and independent organic food stores; in addition to the country's well-established Reformhaus health food store network.
In addition, every supermarket and discounter chain in Germany carries a selection of certified organic fresh and dried foods. The two largest domestic supermarket retailers Rewe and Edeka have their own organic label ranges (Rewe Bio, Edeka Bio), as do discounter chains like Aldi (Gut Bio), Lidl (Combino, Freshona, Milbona) and Netto (BioBio).
Germany's three big drugstore retail chains DM (DM Bio), Rossmann (EnerBio) and Müller (Bio Primo) also sell a broad range of dried organic foods under their respective organic food brands. And then there is the organic supermarket/health food sector which generated 2,85 billion Euro last year.
With such a competitive market environment, it comes as no surprise that in Germany, certified organic foods are very affordable indeed. For staples like milk, yogurt, packaged bread or biscuits the price difference between a supermarket or discounter's organic own label brand and a conventional food brand is almost negligible.
More organic in traditional supermarkets
Over the last 18 months, this development has picked up the pace. According to figures by industry association Bundesverband NaturkostNaturwaren (German Association of Organic Processors, Wholesalers and Retailers), in 2016 the German supermarket sector increased its portfolio of organic products to an average of 450 sku while the discounters expanded their selection to comprise on average 150 sku.
According to BNN, turnover of the German organic food market grew 5.4% to 1,63 billion Euro in 2016; a distinct slow-down compared to 2015 figures of 1,55 billion Euro (+ 11.4%).
And while the fact that organic products have entered the German mainstream food retail market is good for the consumer (wide distribution and low prices), it also means that the domestic organic food retail sector must deal with constant price pressure from the conventional retail sector.
Here are the top 5 largest chains
Regarding outlet numbers, the biggest organic food retailer in Germany was the dennree group with its denn's supermarket chain. According to EHI's Handelsdaten retail panel, in December 2016 the denn's chain comprised 215 outlets across Germany. Second in line was Alnatura with its Super NaturMarkt (Alnatura) chain (107 stores), followed by regional chains BioCompany (51 outlets), the Basic chain with 32 stores and Super Bio Markt with 26 outlets.
Organic supermarket chain Denn'sBiomarkt belongs to Dennree group, one of the largest organic wholesaler and retail organizations in German-speaking Europe. Dennree started in 1974 in the town of Töpen in Upper Franconia. There are currently eight distribution centers in Germany and a wholesaler’s distribution company, DenreeNaturkost, in Austria. In 2016, the Denree group posted a consolidated net turnover of 920 million Euro, an increase of 10% compared to the previous financial year.
Dennree began in the wholesale business, and this is still a critical business activity for the company. Today its wholesaler’s division dennree distributes around 13,000 organic products to 1,400 independently-run organic and health food stores in Germany, Austria, Luxemburg and South Tyrol (the German-speaking part of Italy).
The second main business activity is retail. In 2003, Dennree opened its first denn'sBiomarkt in Bavaria. It now operates 215 denn's supermarkets in Germany and 27 denn's markets in Austria.
In 1975 Dennree launched its first organic own label food brand, dennree. Other proprietary organic brands include Königshofer (meat and dairy), Gustoni (grocery items, vinegar, oils, coffee, and sauces) and Living Crafts (natural textiles and fashion). Organic beauty brand Yalia was recently discontinued. The current portfolio of own label products comprises some 700 sku.
In 2013, Dennree launched "Zukunftstiftung Biomarkt" (Future Foundation Organic Market), a foundation to help support sustainable and organic agriculture, projects and initiatives. And in 2015, the Dennree group acquired Agrofarm Eichigt, a dairy farm which over the next years will be turned into an organic farming business.
Alnatura began as an organic food brand: in 1984, Götz Rehn launched the first products under the Alnatura label. In the beginning, Alnatura was exclusively distributed in outlets of the DM drugstore chain - Rehn and DM founder Götz Werner were friends - and in stores of supermarket chain tegut.
For almost three decades, DM remained Alnatura's most important distribution partner. However, this changed when DM launched its organic food brand, DM Bio, in 2015 and started to delist Alnatura. When Alnatura announced that it would end its cooperation partnership with DM, DM proceeded to sue Alnatura for the rights to the brand name and the resulting legal battle was only resolved in June 2017 by an out-of-court agreement.
Over the last few years, Alnatura has expanded sharply in Germany. Rehn opened the first Alnatura Super NaturMarkt in Mannheim in 1987. By 2010, Alnatura had 59 domestic stores. Over the next six years, the company almost doubled the number of outlets, opening an average of 5-10 new stores per year. Now, the Alnatura chain operates 107 supermarkets across Germany.
The Alnatura Super NaturMarkt stores sell around 6,000 sku of organic products, including dried and fresh foods, meat, dairy, cheese and delicatessen, alcoholic and non-alcoholic beverages, confectionery, cosmetics, household products, supplements and baby care. The core brand is, of course, Alnatura's label brand but the stores also retail other German and international organic brands and products.
Alnatura's current own label range comprises some 1,300 sku, including dried foods, meats, cheese, dairy and vegan products; coffee, tea, oils and vinegar, condiments, sauces, confectionery, and beverages.
The Alnatura products are sold in Alnatura's own stores but also in several other retailers: supermarket groups Edeka and Rewe both sell a partial selection of Alnatura products in their stores, as do German drugstore chains Rossmann, Müller (since October 2016) and Budnikowsky. Now, many DM stores also still sell some Alnatura products, mostly in product categories not covered by the DM Bio range. Alnatura's web shop offers around 850 sku.
The company also expanded its international distribution: the Rewe group's Austrian drugstore chain Bipa began selling a partial Alnatura selection in Austria last year while in Switzerland, Alnatura started distribution in domestic retail giant Migros' supermarkets. The company also opened several Alnatura Super NaturMarkt stores in the Zürich region and is planning on expanding its store network throughout German Switzerland.
Alnatura has had a turbulent few years but the company has rallied, and in 2015/2016, things ended on a positive note. For the financial year ended on 30th September 2016, Alnatura posted a net turnover of 762 million Euro. And Rehn has announced that in 2016/2017, Alnatura will continue its expansion in Germany with at least 15 new domestic stores.
Bio Company is one of the largest regional organic supermarket chains in Germany and the organic food retail market leader in the Berlin and Brandenburg regions in Eastern Germany. The company also owns organic meat and sausage manufacturer Bio ManufakturHavelland which has become the biggest producer of organic meat and sausage products in the entire region. Another subsidiary is wholesale company Midgard Naturkost. In 2016, Bio Company registered a turnover of 145 million Euro, a plus of 8.2%.
Georg Kaiser founded Bio Company in 1999; the first store was opened that same year in Charlottenburg district in Berlin. "The first Bio Company store opened as a stand-alone "natural supermarket," a Bio Company spokesperson explains. "We didn't plan to launch an entire supermarket chain but our vision - offering a comprehensive range of organic products across all categories - turned out to be popular amongst our consumers. Bio Company started to grow naturally, and we opened further outlets."
As of April 2017, Bio Company operates 52 supermarkets. Most stores are in Berlin and Brandenburg, but there are also shops in Dresden and Hamburg. Depending on their size Bio Company supermarkets sell around 8,000 certified organic products - dried and fresh foods, dairy, meat and delicatessen; cosmetics and household products. Each Bio Company store has a bakery counter.
" Our current focus lies on freshness and quality rather than a quick expansion," the spokesperson says. And indeed, Bio Company is known for its high percentage of regional products. Depending on seasonal availability, around 40% of the fresh fruit and vegetables are sourced from farms or agricultural businesses in the Berlin and Brandenburg area.
In other product categories, the regional percentage is even higher: Around 75% of meat, sausages, bread and baked goods and almost 100% of the cheese and dairy portfolio is produced regionally or locally. The regional heritage is highlighted at the POS with pictures and information about of the respective farm or agricultural business so consumers can if they want to, trace the provenance of each product.
In fact, one of the key aspects for Bio Company is supporting regional organic agriculture. The company was one of the founders of Fördergemeinschaft Ökologischer Landbau Berlin-Brandenburg (Association for Organic Agriculture in Berlin and Brandenburg), and in early 2013, Bio Company became a member of the Märkischer Wirtschaftsverbund, a regional association which promotes the manufacturing and distribution of local, organic and sustainable food products.
In summer 2017, the company announced a cooperation agreement with online supermarket Allyouneed Fresh: since early July Bio Company's label food brand - which currently comprises some 150 SKU - had been available through the Allyouneed Fresh website.
The Basic chain - founded by Georg Schweisfurth, Richard Müller, Johann Priemeier und Hermann Oswald in 1997 - had the goal of offering "organic foods for everyone." The first store was opened 1998 in Munich with a neutral, bright design - unlike other organic food stores, Basic intentionally went for a modern mainstream look without wooden shelves and green colors.
The Basic chain sells some 12,000-certified organic SKU which includes dried and fresh foods; dairy, meat and delicatessen, baby products, cosmetics and household cleaning products. The retailer's label range is also distributed by conventional supermarket chain Edeka. There are 32 Basic stores in 16 cities and towns across Germany. The retail space of the supermarkets varies from 500-1100 sqm.
Since the company promotes local businesses (defined as operations or farms within 150 km of the store's location), the brand selection differs considerably in individual stores. At the POS, these regional products are highlighted by the 'In der Region erzeugt" ("produced in the region") logo.
In 2016, the Basic group generated a turnover of around 142 million Euro. The company has also signed up as a partner in US retail giant Amazon's Prime Now fast delivery food service, which was launched in Germany last year.
Super Bio Markt
And Super Bio Markt is a regional organic supermarket chain based in the North-Rhine Westphalian city of Münster. Founded in 1973 by Michael Radau, the company's first outlet was health food store Makrohaus in the city center of Münster. In 1993, the first Bio Super Markt store opened.
Today the company operates 26 outlets in the counties of North-Rhine Westphalia and Lower Saxony.
Depending on the size of each unit, Super Bio Markt stores sell around 7,000 sku of certified organic products, including dried and fresh foods, fruit and vegetables, meat, dairy, and cheese as well as organic cosmetics and household products. In one of their biggest Münster outlets, Super Bio Markt has been operating an organic bistro restaurant Bio To Go since 2011. Bio to Go is attached to the Super Bio Markt and offers fresh smoothies, salads, and desserts.
From the beginning, the company has been working with local farms and agricultural businesses. Depending on the product category and season, most products are sourced regionally: fruit and vegetables, dairy and cheeses, meat and sausage as well as bread and baked goods. These regional products are highlighted at the POS and on the Bio Super Markt website with information on several Bio Super Markt's regional producers.
In 2012, the company began to explore the beauty salon market: Super Bio Markt cooperates with two organic beauty salons in Münster and Düsseldorf. These two salons, Natur'elle in Münster and Pflegereich in Düsseldorf, are attached to the respective Super Bio Market stores. Both studios offer a range of face and body treatments with organic beauty brands that are also available in the Bio Super Markt stores.