SOIL ASSOCIATION TRADE SUPPORT | EXPORT SUPPORT PROGRAMME TERRITORY GUIDE | NORDIC CONTENTS Introduction …………………………………………………………………………………..................... 2 Soil Association Supported Event …………………………………………………………....... 3 Certification and Regulation ………………………………………………………………………… 4 Market and Consumer | Nordic Overview ………………………………………………… 4 Market and Consumer | Denmark Market Overview …………………………….. 5 Market and Consumer | Danish Routes to Market …………………………………. 6 Market and Consumer | Danish Consumers …………………………………………….. 7 Market and Consumer | Swedish Market Overview ………………………………. 7 Market and Consumer | Swedish Routes to Market ………………………………. 8 Market and Consumer | Swedish Consumers ………………………………………….. 9 Market and Consumer | Finland In Brief …………………………………………………… 10 Links and Sources …………………………………………………………………………………………... 10 INTRODUCTION With many looking to fill the significant – and growing – demands for organic food from countries like Sweden, where imports account for around 50% of organic sales, many organic advocates believe that the organic food market in Scandinavia has never looked healthier. With Nordic consumers spending on average two to three times more on organic than their UK counterparts and key markets experiencing growth, your business will want our insights on the market in this region. SOIL ASSOCIATION SUPPORTED EVENTS NORDIC ORGANIC FOOD FAIR | MALMO, SWEDEN. NOVEMBER Nordic consumers spend on average two to three times more on organic than their UK counterparts, so we hope you’ll join us at one of Europe’s fastest growing organic and natural Trade Shows. Last year saw the highly anticipated launch which delivered 270 exhibitors and over 3150 visitors, co-located with Natural Products Scandinavia, the Nordic Organic Food Fair provides the committed and focused environment to meet with buyers and sellers in this sector. Retailers, distributors & wholesales from the Nordic region and around the world come to the NOFF to discover future best-sellers from the hundreds of new product launches. The Soil Association hosts a pavilion at this event which is exclusive to Soil Association licensees. Licensees with a turnover < £500K per year are entitled to a special stand rate and a free stand package worth €250. www.nordicorganicexpo.com CERTIFICATION AND REGULATION Nordic countries come under the control of EU regulation. Any food product sold as 'organic' falls under the EU regulations 834/2007 and 889/2008. This means that the product must have been produced to these regulations and inspected and certified by a registered EU certification body. Currently non-foods (e.g. textiles and health & beauty products) are not covered by the scope of this regulation. LINK TO REG Importing Products may be imported into the EU and sold in the EU as organic if they meet EU regulations. Certifiers in the member state that controls the port of entry must certify the importer of the product and determine if the existing non-EU certification is acceptable. The EU has specific codes for both EU and non-EU certifiers. Codes are specific to the country (EU or non-EU - where the certifier inspected the final packing of the product) , the certifier in that country (EU or non-EU) and may only cover certain product categories. If the certifier of the exported non-EU product is not approved by the EU, then there will not be a code for the product to carry. In such instances the importer and their EU certifier must seek specific approval from their relevant gov. control body. Also note that although there may be a certifier/country code issued, it may not cover all product categories. All imports must be accompanied by an organic ‘Certificate of Registration’, issue by the certifier of the non-EU exporter and filed by the certifier of the importer in the EU. MARKET AND CONSUMER | NORDIC OVERVIEW The retail value of organic packaged food in the Nordic Region was 1.2 Billion in 2013. Retail Value share of organic food in Northern & Western Europe was Germany - 23%, France- 20%, Nordic Countries - 13%, and The UK -13% . On Average €45 per capita is spent on Organic Packaged Food in the Nordic Countries in 2013. One of the largest supermarket chains in Norway (Kiwi) – reported 145% increase on organic food sales in 2013. And although the market is notably smaller in Finland, it too is continuing to enjoy 50% year-on-year growth in organic food sales. MARKET AND CONSUMER | DENMARK MARKET OVERVIEW According to Organic Denmark’s 2013 Market Memo, Danish sales or organic in main retailers totalled DKK 5.5Bn in 2012, a doubling of sales over the last 5 years. Organic Denmark report a 10% growth in 2014 up to 832M Euros. Organic share of market in 2014 was 7.6% . Denmark has an Organic action plan which involves state support specifically for organic production (100% by 2030) and retail. The Danish government aims to 60% of catering in the public sector should be organic before 2020. The latest figures from Organic Denmark indict that over 500 restaurants, cafés, and canteens are now displaying its Organic Eating Label (Økologiske Spisemærke). Dairy was the leading category in 2013, taking more than 32% of the market, with produce a close second (24%), followed by Rice/Grain/Flour (14%). Meat and eggs make up 7% respectively. Denmark saw a 5% increase in value sales through discount stores, supermarkets and department stores in 2103 and Organic Denmark predicts a further 5% growth in 2014. Denmark has an Organic action plan which involves state support specifically for organic production (100% by 2030) and retail, with ambitious targets for organic foodservice procurement. The Danish government aims to 60% of catering in the public sector should be organic before 2020. The latest figures from Organic Denmark indict that over 500 restaurants, cafés, and canteens are now displaying its Organic Eating Label (Økologiske Spisemærke). MARKET AND CONSUMER | DANISH ROUTES TO MARKET Taking 36% of sales, discount stores account for the majority of organic sales, with supermarkets close behind at 28.2%. Growth in discounter sales hit a peak in 2008 (36%) but has slowed to just 0.5% in 2012. Department stores are the only other significant channel (16.4%) Sales in ‘alternative’ channels account for 8.6%. Of the retail chains in 2013,Netto and Super-Brugsen are the biggest players, selling 17% and 14% of all multiple sales. Fakta, Kvickly, Irma , Rema 1000 all feature in the top six , the remainder of the market shared with eight smaller chains (range from Fotex 8.2% - to German discounter Aldi at 0.5%). With nearly 30% of all sales in organic, Irma significantly over-traded in organic in 2013, with all others retailers trade at 10% of all sales, or below. SuperBrugen and Netto customers have the highest propensity to organic purchasing and are well served by these chains. In contracts Organic Denmark reports that Superbest , although having consumers with the highest propensity to buy organic, are relatively poor at servicing this requirement. Helsam are Denmark’s biggest wholesaler, distributing to over 170 stores. Denmark has few dedicated chains like Planet Organic, or Wholefoods. By 2013 Danish organic exports were worth DKK 1 billion - twice as much as in 2007, but still do not exceed imports in 2014. The geography , VAT (24%) and steep import duty on certain commodities (tea, coffee, chocolate) all point to high RRPs for imported product, although according to leading Danish distributor, Gaia Trade, doesn’t prevent aggressive export from the UK direct to Danish stores. By 2014 Discount stores account for the majority of organic sales in 2014 (42%) , with supermarkets down on 2012 (26.4%)and department stores up -taking 18.8%. Netto and SuperBrugsen are the biggest players, with Netto widening organic offer and Coop becoming more premium. Helsam is the biggest health shop (250+ stores) 2013 Danish organic sales channels by % - Source: Organic Denmark 2014 Market Memo MARKET AND CONSUMER | DANISH CONSUMERS The organic share of total household groceries purchases is weighted heavily to the capital. In the Copenhagen area, spend accounted for a 13% of national spend on organic in 2013, second only to Zealand consumers who accounted for 8.8% of spend, the gap appearing to close slightly since 2012. The highest spend is single households and among families with one child (9.8% and 8.6% respectively in 2013) and by age group, 30-39 year-olds purchase the most (10.6% - down from 11.2% reported ion 2013). Like the UK, organic consumption is highest among those with longer time spent in higher education. Danish consumers were spending an average of 168 Euros per household per annum on organic in 2012. By during 2015 consumer were buying an average, DKK 1.949 per person on organic products, which is the highest in the world. MARKET AND CONSUMER | SWEDEN MARKET OVERVIEW With no 2008 recession in evidence, sales of organic products had reached record levels of 9.2.billion SEK (US$ 1.4 billion) by 2011, an increase of 11% from the year before. According to Swedish organic body KRAV, sales grew a further 13% in 2013 , reaching a total estimated market value of 11.6 billion SEK. 2014 saw 38% growth in organic value and the market in 2015 is estimates to be 2.2 billion Euros , up 30% on 2014. Retail performing best in the second half of 2015. 6% of all food purchases in 2015 were organic. According to FiBL, at 3.9% Sweden had the fourth large organic market share in Europe after Denmark, Austria and Switzerland in 2012 Almost all the major product groups, such as milk, egg, yoghurt, coffee, processed vegetables, juice, food oils and dairy products increased in sales in 2011. New products, such as fresh spices, baby food, bread and food ingredients showed the strongest growth in 2011. Product groups that increased the most in 2013 included salad & leaf veg (+211%), cooking cheese (+51%), dried fruit (+46%) and packed meat (+23%) The Swedish Government has a goal that 25% of public sector catering should be organic by 2014.