Strong growth is predicted for key Nordic organic markets during the coming decade in a major new report produced for the Nordic Council of Ministers.
Headline findings from the 125-page report produced by Rambøll Management Consulting include:
- Denmark expected to nearly triple the value of its organic food market over the period 2018-2030 from EUR 1,797 million (2018) to EUR 6,091 million (2030)
- Sweden expected to double the value of its organic market over the period 2018-2030, to be worth EUR 5,552 million
- From a smaller base, Norway and Finland will each double the value of their organic markets
- Whilst at a much earlier stage of development, the Baltic nations – Estonia, Latvia and Lithuania – are growing their organic markets quickly, with an emphasis on exports
- Key regional organic market drivers include strong consumer interest and a supportive political agenda
The report notes that the size of organic farmland, the value of the organic market and the corresponding organic shares of total food sales varies quite significantly across the Nordic and Baltic countries.
In general, consumers across the Nordic and Baltics region remain focused on healthy lifestyles and continue to make an association between organic and health. Similarly, many consumers see organic as representing a better environmental choice. These factors, together with production subsidies and supportive political agendas, have contributed to the substantial growth in organic production and sales in the recent years across the Nordic and Baltic countries.
Denmark, Sweden, Norway, Finland are identified in the report as the most developed markets for organic food sales and production, with Denmark and Sweden clear leaders in both areas. While the Baltic nations – Estonia, Latvia and Lithuania – are categorised as emerging markets, they have experienced growth in the past decade, with a particular emphasis on export opportunities.
Markets and organic share
Sweden’s organic market is currently the region’s largest by value, due in the main to its larger population and economy. Sweden also has the largest amount of organic farmland (both in terms of organic area and share of total farmland. The new report notes that longstanding political and municipal efforts combined with high levels of consumer demand have resulted in organic farmland increasing by 160% between 2005 and 2017 (Sweden’s government this month as restated its target of ensuring that 30% of all Swedish farmland is under organic systems by 2030).
Denmark is shown to lead the region (and world) in terms of organic’s share of its total food market (12% in 2017), with Sweden second (9%), and Finland third (3%).
Organic retail sales are similarly sized in Denmark and Sweden (EUR 1,522 million and EUR 1,638 million respectively), although the organic share within retail is highest in Denmark at 13.3% (2017), compared to Sweden’s 9.3% (2018).
The organic retail market in Norway is much smaller than its Scandinavian neighbours, and only around 2% of total food retail sales are organic. But the report’s authors note this is a sector that is growing steadily.
Likewise, in Finland, organic food sales within the retail sector are at around 2% – but here also the market is shown to have been growing steadily since 2015.
The food service opportunity
The food service sector is another important organic opportunity in the Nordic countries. Organic sales in food service totalled EUR 507 million (2018) and EUR 275 million (2017) in Sweden and Denmark respectively.
Organic sales within the food service sector in Sweden are mainly driven by purchases in the public sector. Organic sales to food service in Denmark, where there has been a big push by Organic Denmark to recruit the restaurant trade, has increased six-fold since 2005.
Alcohol – a helpful monopoly
Another important channel for sales of organic products in the Nordic region is the government-owned exclusive sellers of alcoholic beverages (Systembolaget in Sweden and Vinmonopolet in Norway). They are similar in size to, or even larger, than the food service market in their respective countries and are of great importance as their position as a monopoly within alcohol sales enables them to directly influence the range and type of products consumers purchase.
Projecting forward
Projecting forward, the report predicts that Nordic countries will grow their organic food sales across all channels in the coming decade.
The largest increase is expected in Denmark, which the report predicts will triple its total organic food market in all channels between 2017 (EUR 1,797 million) and 2030 (EUR 6,091 million).
In Sweden, growth is predicted to be slightly lower – however, it is still expected to double between 2018 at 2030 (to be worth EUR 5,552 million in 2030). The organic share of the total food market is expected to increase from the current 9% to 15%. Despite a notable slowing of growth in Sweden’s organic market in 2018 (down to 4% from highs of 20-40% in 2015-17) – attributed to consumers switching to alternative ‘ethical’ labels such plant based and local – the report predicts that customer demand for organic food will continue grow, as organic food is already well positioned in Swedish households.
Norway is expected to more than double the value of its total organic food market between 2018 and 2030 from EUR 420 million (2% organic share) to EUR 1,053 (5%).
In Finland, development is expected to be similar to that of Norway, and the total organic food market is expected to more than double in value between 2018 and 2030, from EUR 606 million (3% market share) to EUR 1,546 million.
The full report can be downloaded here.