Organic in 2020, a safe haven commodity during the pandemic

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The organic numbers in 2020 show how in the very year of the pandemic, consumers have chosen to pay more attention to health and the environment even in their food spending. The trend of markets – in Italy and in EU, non-EU countries of main destination of Made in Italy exports – is documented in a valuable special issue of the magazine
Food
. Based on Nomisma and Nielsen data.

In Italy, organic products accounted for 3.9 percent of total food and beverage sales as of June 2020, a growth of more than 5 percent that confirms a trend that has been ongoing for two decades. And the ‘surge in sales of organic products, around 20 percent, has consolidated further progress in some categories.

Eggs, 1 in 5 is organic

Organic eggs stand out among the best sellers, with 11 percent growth over the previous year to reach 110 million euros and close to a 20 percent share of the category. That is to say, 1 in 5 eggs in the cart of Italians today is organic.

The supply of organic eggs has also expanded due to consumer awareness of the value of keeping laying hens on the ground. Therefore, the large-scale retail trade in Italy has adapted and, among other things, expanded the offer of organic eggs, the ultimate in animal welfare and sustainability at acceptable prices.

More homemade sweets and fewer snacks

Another surge in sales involves flour, queen of the newfound passion in home baking during the 2020 lockdown. Sales of organic flours increased 44 percent to about 25 million and a value share of just over 14 percent of the category.

The increase in homemade sweet preparations has, inevitably, resulted in a reduction in the sale of cookies and snacks, -10%. Little use was made of the demented communication campaigns of the industry trade association, where they attempted to stigmatize homemade sweets in favor of ultra-processed snacks.

Fruits and vegetables

Organic fruit-almost always packaged, unfortunately, due to defective point-of-sale certification-marked a significant increase in sales (+12 percent) to occupy 6 percent of the entire category.

The trend of organic vegetables is also good. Sales of organic products increased by more than 7 percent to reach nearly 5 percent share on the category.

Discount and ecommerce, the boom

The fastest growing organic sales channels are discount stores andonline. The former, +11-12%, are rewarded by the growing supply of references at very competitive prices. Ecommerce, where many producers have been able to organize direct sales with home delivery, has in turn been able to attract many consumers to short-chain organic.

During the lockdown, specialty stores also gained share, with growths around 25-30%. The phenomenon coincided with the need to store in neighborhood stores, at the expense of large-scale retail outlets in suburban and less accessible areas during the worst phase of the pandemic. And it did in fact scale back, returning to +6.5 percent, in line with data that had already emerged.

In Italy, 15% of cultivated soil is organic

Organic production affects about 15.% of Italian cultivated land, as shown. More than half are concentrated in four regions. Sicily with 400 thousand hectares, followed by Apulia, Calabria-areas mainly devoted to citrus and olive trees-and Emilia-Romagna. Organic fruit and vegetable crops grow by 10 percent, olive growing continues at a slower pace.

Organic Italian sugar, the new coming of age

Organic sugar beet was introduced by beet growers of the CoProB cooperative, established in 1962 in Minerbio (Bologna), Emilia-Romagna. Right here-and in 6 other regions (Veneto, Piedmont, Lombardy, Friuli-Venezia Giulia, Marche and Umbria)-the 5,000 member farms are reviving (or recovering) a traditional crop with an innovative project.

Under the banner of short supply chain and traceability from field to table, already 140 farms are growing 1,600 hectares of organic beet. With the prospect of expanding the range as the process of converting new shares of the total 33,000 hectares under beet cultivation is completed, as we have reported.

The food industry is increasingly organic

The agribusiness industry also continues to shift toward organic. Major companies now have their own organic line, as well as MDD,private label, products.

Organic export samples

Italy remains Europe’s leading exporter of organic food, second in the world after the United States. Organic exports are worth about 2.5 billion euros, about 30 percent of which are marketed abroad with private labels from foreign distributors.

Fruit and vegetables account for 20 percent ofexports, followed by milk substitute vegetable beverages. In this sector, Italy is among the world’s top producers and exports to more than 40 markets. It is precisely fromexports that about 80 percent of sales are derived. This is followed by pasta and rice (12 percent of organicexports ), oils (10 percent), fresh and processed meats and wine (8 percent).

Organic wine made in Italy

Italian organic wine continues to grow a lot, including in terms of quality. Among the major productions stand out Chianti Classico (the protagonist of a recent victory to protect the trademark)-with 30 percent organic production-and Franciacorta, where organic has reached 50 percent.

Also comforting is the conversion of Cantine Ferrari, a leading label in sparkling wines, wines that are so popular at home and abroad, but still the protagonists of significant environmental pollution.

The organic we import

Organic food imports to Italy mainly involve unprocessed foods. Those of tropical origin, such as coffee and tea, spices and cocoa, brown sugar, and fruits, mainly pineapple and bananas. Theappeal of the latter continues to grow in part due to the spread of news about the presence of pesticides in conventional bananas, which we have reported on.

And again, we import basmati rice from India, soft wheat from Canada, as well as grains and soybeans for livestock use.

Germany, first organic market in Europe

Germany is the leading European market for organic products, with a turnover of more than 12 billion euros and a 5.7 percent share of food sales. One in two consumers regularly buys organic, with an average per capita expenditure of €130/year.

As elsewhere, the lockdown has blown on organic sales (+30%) in Germany, where discounters are leading the way. Lidl, for example, cooperates with the Bioland association and subjects many of its organic products to even more stringent certification than the European one. It was a strategy that attracted new customers, including high-end customers, who were strangers to the logic of cut-down pricing typical of this channel.

The soaring Brit

In the UK, 2020 ended well for the organic sector. Organic food & beverage sales rose 6.1 percent, soaring +18.7 percent during the lockdown.

In the stores of leading retailer Tesco, for example, top sellers are Fairtrade bananas, with an average of 261 thousand sales per day. Unprecedented increase then marks organic eggs, 48 million in the last 6 months.

France, ready to overtake

Galloping France, committed more than other EU countries to the ecological transition. According toAgence Bio, the French organic market will grow by 50 percent in 4 years. Thanks in part to the mergers between the retail giants and the specialty stores, which have already been successfully experimented with between Intermarché and Comptoirs de la Bio.

Supermarkets and hypermarkets control 55 percent of the transalpine organic market. Carrefour is at the forefront, as suggested by the acquisition of the Bio c’Bon group that went bankrupt. Leclerc and Intmarché follow. Lidl is also advancing well, with a market share of 5.4 percent and growing.

The bio across the Atlantic

Organic turmoil is also in non-EU countries. In Canada, 67 percent of consumers buy organic food at least once a week, despite price increases of up to 60 percent. Business volume in 2020 exceeded 3.1 billion euros (C$5 billion). Of this flow, 780 million euros came from the sale of imported products. Coffee, bananas but also strawberries, tomatoes and spinach. A vertical vegetable garden was also started in Empire Group stores to provide customers with fresh produce too delicate to cope with transportation.

In the United States, the organic market is also very vibrant. Just before the pandemic, two organic chains (Lucky’s market and Earth Fare) declared bankruptcy, but the industry remains in excellent shape. Business has more than doubled in 10 years, from US$24 billion in 2010 to over US$55 billion in 2020, and organic now accounts for 5.8 percent of food sales. Driving the growth are giants such as Walmart and discount stores, as well as Whole Foods Markets, which is playing on promotions to expand its customer base.

The Australian anomaly

An inconceivable situation for us is reported in Australia . The use of the organic/organic declaration still seems to lack rules that are adequate for the purposes, to the point that operators could mention it on the label even without having the full requirements for it, i.e., using only one organic ingredient.

The market for authentic organic products, moreover, is also growing in the land of kangaroos. According to Australia Organics, at least two out of three organic food purchases are dictated by health concerns for themselves or their children.

China and India, huge growth markets for organic

In China, the desire for healthy eating focuses on snacks and home consumption. The driving force is Millennials, of whom 81 percent say they choose snacks favoring fresh and possibly organic products. A desire that opens up new opportunities for foreign business partners, including Italians. By 2024, the Chinese organic food market is expected to exceed $13 billion in sales.

India in turn expresses a billion-dollar organic market. With the pandemic lockdown, sales of organic rice and legumes doubled. Turnover is around 860 million euros ($1 billion). Amazon India has ridden the phenomenon, promoting the consumption of organic products with discounts of up to 50 percent on dozens of imported brands, including Dal Monte extra virgin olive oil.

Russia, still a niche market

In Russia, organic is the preserve of a few, especially the affluent young people living in major cities such as Moscow and St. Petersburg. The reason is that organic entails price increases of up to 300%.

It is therefore not surprising that the organic food market accounts for just 0.1 percent of food sales, 80 percent of which is imported. Nationwide takes over the VkusVill chain, which in just over a decade has gone from running a neighborhood stall on the outskirts of Moscow to opening 1,200 stores, sourced from local producers.

Marta Strinati

Marta Strinati
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Professional journalist since January 1995, he has worked for newspapers (Il Messaggero, Paese Sera, La Stampa) and periodicals (NumeroUno, Il Salvagente). She is the author of journalistic surveys on food, she has published the book "Reading labels to know what we eat".