There is no doubt that there is more and more concern for the environment, in the same way that it is easier to find people who try to lead a healthy life in which food is well cared for.
These statements could give us an indication that the market for organic products is becoming increasingly important, something that is confirmed by the data and statistics that speak of the sector.
General data of the sector
Among other data, we know that within the Food and Beverages sector, the consumption of the organic branch in 2002 accounted for 0.5% of the total consumption in Spain, reaching 2% today. In 2005 the average expenditure per person on organic food and drink was approximately 6 euros in Spain. This data, applied to the total population registered in the 2005 census, values the Spanish market for organic products for human consumption at just over 264 million euros, handling a figure that according to some sources in the sector is close to 300 millions of euros.
When analyzing these data we must bear in mind that although Spain still does not reach the growth rates that occur in the organic markets of the rest of Europe, various reliable sources, such as the "European Market for Organic Products", define the Spanish organic market as a Emerging "sector", which in a few years will significantly increase its market share in Spanish food.
Likewise, we can refer to future estimates and forecasts, which augur great potential for the organic products market in Spain. The first is that it could reach 1,200 million euros a year, four times its current size. The second estimate foresees the possible six-fold increase in spending per person in Spain on the rate of organic food and beverages in the coming years.
Regarding the European market, between 2004 and 2005 it grew by 14%, reaching a volume of 14,000 million euros today, and France, Germany or Italy being the countries where the most organic food product is consumed.
These figures represent the potential that organic products have for companies, which, although they still need to focus their sales strategy in Spain very well, already have a real growth opportunity through export to the closest European countries.
Evolution of the sector
In the first years of organic production, a great deal of transition work was necessary in the cultivation methods, treatment of the products, etc., towards the measures required by the regulatory bodies of organic agriculture and food, trying to maintain competitiveness with conventional products.
For the adventurous farmer who substituted his traditional crops for organic ones, it meant big changes, as well as a lot of uncertainty about the real demand for these products. The processor, for its part, had difficulties finding distributors of the necessary raw materials that would comply with the “organic” certificate.
On the other hand, it was easy to find companies that started to produce organic products and disappeared shortly after, something that failed to promote a stable consumption habit.
However, today there are not so many difficulties. Organic farming today has a hole in the Spanish agricultural sector. The number of operators has multiplied by six from the 1990s to 2006, and the area cultivated in an ecological way has increased from 4,000 hectares in 1991 to almost 1 million hectares in 2006.
As for processors and distributors, there are currently no such supply problems. In 1991 in Spain there were 50 producers and marketers of organic products, compared to 1,942 in 2006.
On the consumer side, the controls and legislation that exists both at the state level and at the European level fully assures consumers that they consume organic products in perfect condition.
The future
Some of the barriers that organic products find to gain a foothold in Spanish pantries is the ignorance that sometimes exists about this type of product, which is often confused with the dietary product. But this barrier is going to be less and less, due to the large number of actions that are carried out to publicize these products, and to show them as one more product in our daily diet. As an example, we can cite the "Multi-year Campaign for Promotion and Information Actions on Organic Agriculture in Spain" presented by MAPA in 2006 to stimulate the consumption of organic products.
This growth, previously shown in figures, which sustains that consumers and potential customers of organic products increase day by day, causes an increase in the offer. This means that the organic product is increasingly present in supermarkets.
A few years ago, these products were aimed at a specific segment, that of "ecologists", who found the organic product in specialized "naturist food" stores, along with dietary and medicinal food.
Word of mouth was given within the "dietetic" or environmental segment, which spread knowledge about this type of product. The marketing system used was practically the reactive one, not targeting new groups of consumers.
Later on, specific sections for organic items began to be included in supermarkets, that is, aisles with shelves dedicated to this type of product, conveniently labeled and marked.
It can be assumed that the growth in production and consumption shown previously in figures, and the forecasts that, sooner or later will be fulfilled, will change the usefulness of organic products. It would not be risky to say that it will no longer be a supermarket shelf that brings them together, but that in each of the shelves there will be organic products, of different brands and different characteristics, mixed with the rest of the food, being assumed as "normal".
Irene Otamendi Legorburu - Business Strategy and Management. www.esyges.com [email protected]
