Big money in organics

Johan Geeroms, senior risk manager at Euler Hermus posted an interesting blog on the Euler Hermus website under the title ‘Big money in organics’.

He writes that Albert Heijn, Holland’s largest supermarket chain has more than a thousand organic products on the shelf. For this ‘ultra commercial supermarket’ organics is an important asset for attracting customers and boosting overal sales. That tells us alot about the potential of organic products. ‘Organics’ is the product line with by far the largest growth rate in Dutch supermarkets. Problem is that the supply of organics can’t keep up with the growing consumer demand.

Bionext, the Dutch organic producer’s organisation, predicts increasing demand for organic products over the next five years.

‘Healthy’ products – low fat, low sugar – are very much on everyone’s mind. See for example the attention given to the health problems associated with obesitas.

Organic farming not growing fast enough to meet the growing demand

At the samen time Skal, the Dutch organic certification body draws our attention to the fact that Dutch organic farming is not expanding fast enough to meet the growing demand. For conventional farmers considering the move to organics higher costs and lower yields during the first few years are an obstacle. Another factor limiting the growth of organic farming are the high prices for agricultural land in Holland.

As Johan Geeroms writes it’s now up to the Dutch government to help farmers make the move to organics.

Learning from Denmark

Here we can learn from Denmark writes Johan Geeroms. Not only do they have the highest market share in organic products in the world, they also have ambitious plans to stimulate further growth. At the moment about 7% of agricultural land in Denmark is farmed organically, and the officially stated aim of the Danish government is to increase this percentage to 15% in 2020 and to 100% in 2030.

In order to fulfill these ambitions the Danes have some original ideas. For example Mette Gjerskov, former minister for food and agriculture, suggested making all meals in schools, hospitals, old-people’s homes etc organic. That’s more than half a million meals a day we’re talking about. Another idea is to transform all the agricultural ground owned by the government into organic farms. That amounts to about a quarter of all the agricultural land in Denmark.

If supermarkets continue to promote organics and governments give a helping hand then the big breakthrough of organics is just a matter of time. Johan Geeroms ends his blog noting that organics is no longer a question of ideals but of ‘big money’.