The webinar organized by Greenplanet on April 4th, focused on the role of distribution in the spread of organic products, offers an opportunity to reflect on the topic, highlighting the limits and opportunities in a period when it is important to increase the frequency of organic product usage among a broad consumer base, which is still too occasional today.
When we refer to distribution, we cannot forget that it is composed of very diverse realities. Alongside Organized Distribution (OD), which includes supermarkets, hypermarkets, and discount stores, we find specialized organic distributors, sector-specific stores (e.g., greengrocers), local and neighborhood markets, direct sales, and distributors serving the “food service” sector (restaurants, catering, etc.). However, when we refer to OD, we cannot overlook that, according to ADM-TEHA data, 80.9% of domestic food consumption belongs to this segment, and one out of two organic products in Private Labels is under the distributor’s brand (MDD). Therefore, to better spread organic products, this segment cannot be excluded. In recent years, however, national organic consumption has struggled to exceed 2.9-3.0% of total food consumption in OD, and 4% if we consider other distribution segments, with a per capita consumption of 66 euros (Fibl 2023 data). France and Germany outperform us with markets about three times the size, a consumption share of 5.6% and 6.3%, and per capita consumption of 176 and 191 euros, respectively.
What can be done to recover market share? Distribution is certainly not secondary, but it needs to believe in organic again. While it has believed in it over the last 15-20 years, we are now seeing a cooling of both distribution strategies and cultural approaches.
It has emerged that consumers expect to find the same product segmentation in organic as they do in conventional products. However, they encounter far fewer options than before because organic products have lower turnover. It’s a “vicious circle”: the less organic products are found on shelves, the less they will sell. On the cultural side, distribution has invested in “zero residues,” “vertical farming,” and preparing corporate social responsibility reports where sustainability has been fragmented in terms of packaging, energy savings, “gender gap,” recognition of “benefits,” and more, all in a self-referential logic towards the distributing company and less focused on the entire supply chain, involving, as could be done with organic, all operators upstream. This does not mean these interventions are not useful, but their effectiveness is far lower compared to involving the entire supply chain, especially when, in some cases, the measures impact more the aesthetics than the substance of processes. Special mention should be made of “zero residues,” which mimics a concept dear to organic, while it is actually a conventional product and unfairly competes with organic, as highlighted by some market research.
On a more economic level, the price of many raw materials has decreased in absolute terms, with the “gap” between organic and conventional products significantly reduced, sometimes to the point where the application of organic methods may not be justified. However, this gap has not followed the same trend for finished products. This risks discouraging many organic entrepreneurs from remaining in the sector, compounded by the numerous bureaucratic complexities in our country, which constitute real barriers. It is worth noting that the 2024 data presented at Biofach by Assocertbio show a standstill in terms of area and operators, marking the first year of stagnation after years of continuous growth.
We also believe that the constant emphasis on the superior health benefits of organic products may clash with the EU’s food safety principle, according to which all food products must be safe. It would be better to focus attention on the environmental content of organic products, as it is widely accepted and appears in the top reasons for purchase in market research, with health benefits being one of, if not the main, reasons for buying.
In terms of the environment, the ongoing and unwarranted attacks on the Green Deal from politicians, citizens, and public opinion, who are sometimes unaware of its contents, certainly do not help. Instead of being seen as a tool for greater competitiveness, especially for agri-food products appreciated in all markets, the Green Deal is described as the worst competitive tool when the main barriers are posed by individual countries, not the EU itself. Organic farming is a prime example of this. This undermines consumer inclination towards conscious consumption and green purchases, which include organic products.
Encouraging the consumption of organic products means making them available on shelves with a number of references comparable to those found in conventional products. More investment in organic is needed, reversing the trend of the last two years.
Fabrizio Piva
Editorialist Greenplanet
