Danish grocery chains see more positive signs in the organic market

After a longer period during which the organic market has been somewhat stagnant, both Coop, Netto, and Meny are now experiencing positive trends in organic sales. This was one of the main messages when representatives from the entire organic value chain participated in the Organic National Association's inspiration day, held at Øllingegaard Dairy near Skævinge. The packed program included presentations on current market developments, new consumer trends, the importance of organic farming for biodiversity and clean drinking water, while the day's panel debate between Coop, Meny, and Netto showed that after several years of stagnation, the chains are again experiencing sales growth in several categories within the organic range. However, the three nationwide grocery operators, all of which have integrated organic as a fixed part of their strategy, agreed that it requires targeted and persistent efforts to truly kickstart growth in organic products, especially to encourage the younger generation to choose organic. Prices need to be lowered to a level where more people can afford it, organic products must be visible in stores, and the reasons for choosing organic must be communicated anew, in language that particularly appeals to the youngest consumers, who do not automatically seek out organic products, were some of the main messages at the inspiration day. The chains still point to the price gap between organic and conventional products as the main barrier to organic sales, but at the same time, there are more positive signals from the three grocery operators, all of which have implemented various initiatives that have boosted organic sales. Coop sells more organic poultry Thomas Roland, Head of Responsibility at Coop, is especially pleased that the four Coop chains—Brugsen, 365 Discount, SuperBrugsen, and Kvickly—are collectively experiencing growth in the unit sales of organic products. "This is very positive because we are now beginning to see that the share of organic products sold over the counter is starting to increase. It gives new optimism and a desire throughout the organization to invest more, which is actually what we have struggled with the last three to four years. There has been a bit of a downward spiral and uncertainty about whether this is a place where we can find growth. But now we are starting to see something positive happening in the organic market again," said Thomas Roland. He is especially pleased that Coop, for the first time in a long time, is experiencing growth in organic poultry sales, while busy customers, who probably used to cook everything from scratch, have started to pick up Coop’s pre-mixed organic salads from the shelves. According to Thomas Roland, experience from Coop shows that it is important to offer customers organic options across multiple value positions so that more customers can choose organic without the price difference becoming too large. "To attract new customers, price is still something we need to work on. So, it might mean making some compromises on quality," he said. A strong position as a discount chain Denmark’s largest grocery chain, Netto, is also satisfied with its organic sales, said Kristine Marie Thøgersen, Commercial Director at Netto. "We actually have an organic share that is larger than our total market share for food. So, we have what we call a positive 'fair share gap' in organic. And we think that’s an extremely strong position for a discount chain because, quite frankly, organic doesn’t traditionally align with discount," said Kristine Marie Thøgersen. She explained that the chain’s strong organic position is a result of Netto’s mantra that everyone should be able to afford organic products. She notes that in recent years, organic has been somewhat overshadowed by the broader climate debate, which has been very prominent in customers’ consciousness. To strengthen the position of organic products, Netto, which operates nearly 600 Danish stores, has therefore initiated a collaboration with the Organic National Association. The chain has also launched several campaigns to retell the story of why customers should choose organic, and according to Kristine Marie Thøgersen, this has had a positive effect. "When we look at the numbers, we see a small growth in organic sales," she said. Solid growth at Meny In comparison, Meny is experiencing solid growth in organic sales, stated Kristine Pilgaard, Commercial Director at Meny. "I think we have many good initiatives underway in organic, and fortunately, we are not experiencing the stagnation that the Organic National Association has mentioned. This year, we are growing nearly 10 percent in organic sales, and it’s not driven by price; it’s equally driven by volume, which we are very happy and proud of," said Kristine Pilgaard during the panel debate. She attributes this sales increase primarily to Meny’s targeted efforts to expand its range of organic products from Aarstiderne, which the Dagrofa group took over a year and a half ago. "This is one of the most important steps we’ve taken in recent years. Aarstiderne started as a shop-in-shop in our produce departments, which gave a big boost to organic sales, and now we are developing a whole series of private label products in other categories beyond fruits and vegetables under the Aarstiderne brand." Meny operates under the mantra that food should not only taste good but also do good. "Organic plays a hugely important role for us," said Kristine Pilgaard, who also announced that one of the next products from Aarstiderne will be an organic rye bread, ready to make a mark in a bread category where organic products have always struggled, and where customers often have to dig into the frozen section to find bread with the Ø-mærket (organic label). There is no simple answer According to Thomas Roland, it is necessary for chains to keep retelling the story of organic products. But it must be done in language that the younger generations understand. "We are concerned that the young consumer group, which will become the future families, does not automatically turn to organic. There has been a shift, so we need to retell the story behind organic, but we need to find out what the relevant language is that resonates with the new generation. It may be that they grew up with organic, and when they have children themselves, one might expect them to automatically buy organic, but that automaticity doesn’t exist," said Thomas Roland. Coop can measure consumer groups that do not believe agriculture is part of the solution they seek. "They are looking for quick solutions to very, very large and complex problems. But there is no simple answer to a complex problem, because if there were, it would be solved. So, I can’t really say what we should do, but I can say that we see a young generation of consumers coming in who need to be convinced anew." Chains need to be much more proactive Rasmus Prehn, CEO of the Organic National Association, praises the chains for their efforts to promote organic products but also calls for a more aggressive approach. "There is no doubt that we need supermarkets and chains to step up much more," said the director to Organic Now. He calls for chain strategies where their organic ambitions become even clearer. "There is a need for chains to step in and be much more active. They can do this by making their organic ambitions much more visible in their strategies, so that at the highest level, they commit to working more for organic products."