Organic boom is confirmed, +11% sales in 2020. GDO and direct sales outperform organic boutiques. The turnaround in consumption is attested by Bio Bank, the database that has been collecting data on organic since 1993. (1)
Organic boom, large-scale retail and direct sales
Within 10 years, between 2011 and 2020, the distribution of organic products in Italy migrated from specialty stores to supermarkets. The share of large-scale retail increased from 27 percent to 47 percent, that of specialists with boutique prices conversely plummeted (from 45 percent to 21 percent). Direct sales hold position (28 percent to 31 percent, the report’s data show), with good chances for growth due to better profitability for farmers and prompt payment incentivizinghome delivery arrangements.
Sales of organic products, in the considered large-scale retail trade, are worth 2 billion euros. After years of double-digit growth and a consolidation in 2019 (+2 percent), growth resumes at a good pace (+5 percent in 2020). Organic private label(MDD, or private label) references, in turn, increased from 4,300 in 2018 to 4,700 in 2019 (up 8 percent).
Coop Italia, Esselunga, PAM Panorama. The queens of organic to private label
Coop remains the undisputed leader on own-brand organic food and cosmetics(private label), with 750 references. To which, among other things, Ecocert-certified household products could be added in a holistic view of green spending. The Italian retail store brand historically most committed to issues of social and environmental sustainability, animal welfare(no antibiotics) and health(no palm oil) was the first in Italy-in 1992-to offer organic fruit and vegetables in its stores.
It is followed by Esselunga, with 485 organic references to MDD (Distributor Brand). Esselunga was the first to launch a private-label organic product line, in 1999. An adventure worth retracing in thecompelling narrative of one of its protagonists, Giuseppe Caprotti.
The Pam Panorama group takes the bronze medal, with 366 references of organic products. The procurement policies introduced at the time by Daniele Saggion also thus confirm their soundness and foresight.
Specialty stores under pressure
On the shelves of supermarkets and ecommerce sites, organic references continue to grow, as already highlighted in thelatest report of the ‘Immagino’ Observatory (GS1-Italy, Nielsen). The branded industry, from SMEs to big business, is beginning to understand what consumers are increasingly demanding. Natural food for real, without dangerous agrotoxic residues.
Organic has become part of mass consumption, thus shrinking the space for ‘jewelers’ with astronomical margins and logistical shortages on fresh. Therefore, specialty stores are forced to review their strategies. Bio Bank has a high turnover-over 200 outlets, benefiting the >150 sq. m. areas-and expects relatively lean sales, around 924 million in 2020.
Networks of organic stores
There are 1,339 organic specialty stores in Italy. Of these, 42 percent (563) belong to a network, and 35 percent (579) are independent but affiliated with one of the distributors’ two promotional programs (Ki Ama Bio and Come Voglio Bio). Thus, to cope with the advance of large-scale retail, 77 percent resort to aggregation. Organic store networks in Italy, in order of size:
1) NaturaSì dominates the sector, with 297 outlets. It was born in 1993 in Verona, almost three decades after the pioneering The Macrobiotic Point (1980). In 2019 it acquired the Biobottega and Piacere Terra chains,
2) Cuore Bio (173 stores), in turn belongs belongs to the leader EcorNaturaSì. Several stores have changed their signage to that of NaturaSì,
3) Naturplus (24 stores) and MelaVerdeBio (15), from the Apulian company Natplus,
4) Bio c’ Bon, the third largest organic sign in France, opened in Italy in 2014. Today it has 16 convenience stores. In November 2020, it was acquired by the Carrefour Group,
5) Biosapori, a Veneto-based chain established in 2003, has 10 supermarkets, 9 of which have food courts,
6) Macrobiotic Point, a pioneer in organic food, drops to 28 stores, including 23 with restaurants.
Organic boom marginalizes small stores
Squeezed between supermarkets and organic networks, the small stores that first spread organic culture and consumption in the country since the 1970s instead risk extinction.
The main asset of this segment is its original vocation. Namely, commitment to communicating the values of organic farming, direct relationship with producers, and product knowledge. But the tools, Bio Bank suggests, deserve to be updated.
AssoBio’s comments
‘Organic consumption is actually growing significantly around the world. And even in Italy, in the past 12 months, they have grown by 7 percent to 4.3 billion.
Large retailers represent the most important channel, but in recent months, probably also accomplice to the particular situation we are experiencing. However, there has also been growth in the specialized world with values significantly above the national average. The location of the stores, the presence of many local products, and interpersonal skills certainly helped these performances.
Exports are also very good, which is launched to exceed 2.6 billion euros in 2020, or more than 6 percent of all Italian agrifood exports. Therefore, it is important to properly remunerate farmers and encourage the increase of organic land!’ (Roberto Zanoni, AssoBio, president)
Marta Strinati and Dario Dongo
Cover image taken from www.agirpourlenvironment.org
Notes
Focus Bio Bank 2020 Supermarkets and Specialized https://issuu.com/biobank/docs/focus_bio_bank_supermercati_2020
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
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".
