Losing momentum, organic must win back consumers

Sales of organic products have been declining for several months. The fault lies in a decline in supply and demand, but also in a loss of confidence in the label.

Organic, down? In shopping bags, organic products are not as numerous as before. Sales in supermarkets are having a hard time: according to the Iri Institute, organic sales fell by 6.6% in the first quarter of 2022 compared to the same period last year. Much more than non-organic products (-1.6%) which, if they fall, do so to a lesser extent. The trend is not new: the backlog in mass distribution, which accounts for 55% of organic sales, dates from the spring of 2021.

The atmosphere is not festive in specialized stores either. A similar slowdown in sales occurred a few months after the supermarkets. According to Iri, spending in specialty brands fell by 4.9% in the first quarter of 2022. Organic, accustomed to exponential double-digit growth in recent years, stumbles regardless of distribution networks. However, even the pandemic had spared it – the market had crossed 13 billion for the first time in 2020.

On the supply side, we may have reached a ceiling. In the wake of consumer enthusiasm for organic, references have increased in all directions in recent years, even in categories that have been underinvested until now. We now find beer, make-up or even hand cream with the organic label on the packaging. “That mechanical lever is starting to dry up,” said Emily Mayer, FMCG specialist at IRI.

“Loss of Trust”

Distributors, who feel the tide is turning, are cutting back: in the field of organic products, the shelves are now sufficiently stocked, even a little too much. Organic today represents 8% of references in stores, but represents only 5% of sales. Demand no longer takes over supply. As a result, the supply of organic products shrank by 3.7% in supermarkets in the first quarter of 2022, while it fell by only 1.9% for conventional products in the same period.

The question is also at half mast. The health crisis continues to unbalance French consumption: in recent months the French have favored ready-to-eat and “pleasure” products and since the onset of the health crisis, they have been traditional shops and fresh supermarkets, such as Grand Expenses , which have their advantage (+4.9% of costs for one in the first quarter and 6.9% for the other). Biologically is not very present on these two aspects: mechanically sales fall.

But beyond these temporary waves, the trend is deeper. “The most worrying thing is the loss of confidence in organic products,” said Laure Verdeau, director of Agence Bio. The niche of “good consumption” is fragmented and the information is vague: “without pesticide residues”, “high environmental value” or “committed producers”, the labels abound, driven by the growth of the market. In the mind of the consumer, not sure if he is there. Especially since products rated with an “A” by the Nutri-Score also compete.

“These labels, which are multiplying, have diluted the organic label and suggest that it is cheaper organic”, regrets the chairman of Biocoop, Pierrick De Ronne, for whom we have also “tarnished his image” with “cucumbers under plastic, apples from the other side of the earth or not respecting the seasons”.

Local instead of organic?

In addition, consumers increasingly prefer local farmers and companies, without necessarily worrying that the offer is organic. Inflation in recent months is based on all these considerations: organic products, even if they are less inflationary than conventional products, are the victims of consumer decisions about their food budget. Faced with the rise, not everyone can afford to buy organic products and their image of high cost sticks to their skin.

“It is a social problem if not all consumers have access to these products, even though we were in a democratization of organic,” notes consumer expert Karine Sanouillet. But “it’s not inevitable, because consumers actually prefer organic,” she says.

Highly engaged consumers, who only consume organic, don’t need to be convinced again: organic is neglected by the masses of occasional buyers, and they need to be seduced again. “We need to re-explain what organic is,” Laure Verdeau continues. Organic is a more virtuous way of producing for the environment, not a nutrient-rich “halo of sanctity,” she says. “Yes, an organic crisp is always greasy. Yes, an organic biscuit contains sugar”.

For the director of Agence Bio, the solution will come through food education and communication. The same tone on the part of Biocoop, which is preparing to launch a new advertising campaign on television. “We cannot rest on our laurels,” says Pierrick De Ronne. The brand wants to distinguish itself from mass distribution by focusing as much as possible on local, fair trade or minimally processed products. In a context where purchasing power is increasing, the big task of organic is also to justify the extra price.

“Let’s Not Bury It Too Soon”

Major retailers are confident and are betting on a bad economic situation. Unlike specialty stores, supermarkets are not organic, and when consumers go to a downmarket and buy organic, they generally stay in the same store. “Let’s not bury organic too soon. Some people will arbitrate on their food budget, but let’s not go so far as to say it’s the end, it was a fad, no,” said System U spokesperson Thierry Desouches.

Specialists such as distributors do not expect a rapid recovery in the market. It should be slow for a year or two. For the boss of Biocoop: “we will see more clearly in the coming months”. Time to see if the trend is deep or temporary.

Jeremy Bruno BFMTV journalist

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