There has been considerable growth in the market for organic products in Europe in recent years. However, competition between the countries of Europe is growing and the annual growth rates between 1999 and 2002 differ clearly by country.
The highest growth rate in the last few years could be observed in France and the UK. In both countries the organic market grew annually by more than 40 per cent in the last three years on average. In a group with Italy, the Netherlands and Switzerland, the average market growth varied between 20 to 30 per cent a year. In Austria and Denmark where the market is positioned at a matured stage nearly no market growth of the organic sales occurred.
Between 1999 and 2002, organic sales and organic land areas developed with a different dynamic in many European countries. Moreover, two countries developed in different directions. While the organic demand decreased in the last three years in Denmark, the organic land area conversely increased. The opposite development took place in Austria. The most well-balanced development between demand and supply could be observed in France and Germany over the last years.
But what does the future for the European organic market look like? What are the market prospects in terms of growth, and what are the main influencing factors? To answer these questions, 129 experts from all over Europe were interviewed within of the project OMIaRD (Organic Market Initiatives and Rural Development). The following paragraphs summarise the main results of the market expert survey. “Fragmented and underdeveloped market” and “lack of marketing know-how” received high scores from a list of possible constraints for the development of supply.
More than 70 of 129 experts also considered “poor co-operation and communication” and “low levels of farm gate premiums” to be important constraints, whereas “lack of supermarket involvement” and “competition from non-organic alternatives” were not seen as important.
“High consumer price”, “poor availability of organic products”, “lack of consumer information and awareness” and “poor product presentation” were considered important by more than two-thirds of the respondents in the area of demand, whereas “competition from near organic alternatives” and “lack of credibility of the certification systems” were not considered important.
Altogether it has to be stated that in none of the established European organic markets between 2002 and 2007 growth rates will reach more than 10 per cent per year. Regarding the expected market development within the next five years overall rates varied between countries, with lowest rates anticipated in Denmark (approximately 1.5 per cent a year) and highest rates in the UK (11 per cent a year).
The majority of experts anticipated higher demand than supply for fruit and vegetables, but no clear trends emerged for other product categories.
Experts agreed that organic marketing structures need to improve with expected increases and that in creased product range can help stimulate demand and that new consumer groups should be targeted. They do not think that promotion should be based on risks associated with conventional food.