That the time of confinements and the health crisis seems far away for the organic market. At the time, the French jumped on these products bearing the AB label – organic farming –, further accelerating growth that was already well established. More than three years later, it is nothing more than a distant memory. In 2022, purchases of organic food products fell by 4.6%, and their share in the French basket fell to 6%, compared to 6.4% in 2021. “Everyone thought that organic was growing constant and was not going to turn around,” recalls Laure Verdeau, general director of the French Agency for the Development and Promotion of Organic Agriculture (the Organic Agency).
This meant counting without the return of inflation. And the negative spiral shows no signs of stopping. Between January and July 2023, the volumes of organic food sold in supermarkets fell by 13%. Only direct sales still seem to be keeping their heads above water. “The year 2023 should be the year of the decline of organic,” recognizes Philippe Camburet, president of the National Federation of Organic Agriculture (Fnab).
However, inflation for organic was much lower than for conventional in 2022 – between 5 and 6%, compared to 15% for other products. Several reasons explain this gap: organic producers use little or no phytosanitary products, the price of which has increased sharply with the war in Ukraine. In addition, certain conventional products or raw materials to make them come from further afield, which implies additional transport costs, which are also increasing.
Consumers make trade-offs
Despite a lower price increase, organic remains 20 to 30% more expensive than traditional products. A gap that weighs when consumers fill their baskets. “This arbitrage is a strategy which is logical with the inflationary crisis. Consumers are mainly falling back on distributor brands and the lowest prices,” explains the Ministry of Agriculture.
The profile of buyers is also changing. “In this inflationary context, we were able to keep consumers engaged, both in specialized brands and supermarkets. On the other hand, those who came more occasionally, those who had switched to organic for butter and milk, for example , are less present”, observes Benoît Soury, director of the organic market of the Carrefour group, owner of the Bio c’Bon and So.bio brands. The bad patch is likely to last. “We are in a lot of uncertainty. As long as consumers are worried about their purchasing power, it will be restrictive,” anticipates economist Thierry Pouch, head of the economic studies and foresight department of the chambers of agriculture.
Distributors don’t play the game
Another perverse effect also penalizes the market. Failing to sell organic products, distributors are reducing the number of items in their stores. “We are seeing a disengagement on their part, there are 12% fewer organic products on the shelves, while the situation of certain specialized distributors is precarious. This threatens the visibility of organic products,” fears the Ministry of Agriculture. In 2022, 240 organic stores have been forced to lower the curtain.
Biocoop, one of the flagship brands in the sector, is increasing its closures – around forty last year. Its general director, Sylvain Ferry, has just been landed by Système U. Another blow to the sector. “It is, of course, an epiphenomenon, but it is indicative of what is happening in biology. [Sylvain Ferry] had all the capabilities to successfully carry out the company’s strategy. This ecosystem is still too young, there are not enough talents and trained people”, regrets Philippe Laratte, vice-president of the Maison de la bio, an association which brings together all the players in the sector – producers , processors and distributors. For its part, Naturalia, owned by the Casino group, now offers products that are “good for your health” but which are not labeled organic.
The market is also feeling the full force of the local boom. “Organic today faces competition from products with less restrictive specifications than those of pesticide-free or agroecology. It’s virtuous for our planet, because it reduces the quantity of pesticides, and it’s a first step: these consumers will perhaps tomorrow be organic customers”, believes Benoît Soury, of Carrefour.
Communicate to win back customers
All is not lost. “I have no concerns about the fact that we are going to move towards more organic. We are managing a short cycle, as well as trust problems,” says Philippe Laratte, from the Maison de la bio. Benoît Soury agrees: “When we listen to consumers, the desire to eat healthy is still very powerful. We can reasonably remain optimistic and we are ready for the market to rebound.” All the players in the sector will tell you: communication will be the key. “We are faced with a situation of misinformation among the general public. The big challenge will be to explain what is good about organic food and how it can correspond to people who want to eat well,” believes Philippe Camburet, from Fnab. On the Rue de Varenne side, we promise a new massive communication campaign in the coming months. Necessary, obviously: “Very often, in current surveys, consumers believe that the virtues associated with organic are not so obvious,” notes economist Thierry Pouch.
The industry expects a lot from the government. Last May, a first emergency envelope of 60 million euros was released. A straw for the sector. “The state’s support is pathetic and marginal. It took us months for the government to pay this amount after intense lobbying. In Germany, the government reacted immediately,” laments Philippe Laratte, of the House of Representatives. organic.
The issue is not to be taken lightly. Within ten years, 166,000 farmers will have retired. “It is estimated that 40,000 people want to take over in organic farming. But if we cannot offer them good conditions, that poses a problem,” points out Laure Verdeau, of the Organic Agency. Especially since deadlines are approaching. By 2027, France has set itself the objective of reaching 18% of organic surfaces, compared to 10.7% in 2022, then 21% in 2030. But, if sales continue to decline, future organic farmers could give up, while those who are already established could backtrack. “If we are not able to guarantee them a future, what are we going to tell them?” asks the president of Fnab. Time is running out to avoid a fiasco.