In 2022, the organic food industry is heading for the first drop in sales in its history. The farmers’ association assumes this in a current market report. The reason for this is the reaction of customers to high inflation.
The producers of organic products in the food sector have recorded falling sales in the current year. That’s what the farmer’s association did. “The German organic market shrank in 2022 for the first time in its history,” says a market report by the German Farmers’ Association at the turn of the year. By the end of October, organic sales had fallen by 4.1 percent.
According to the association, total sales in the industry will be around 15 billion euros in 2022. Despite the decline in sales compared to the record year 2021, sales will still be 2.7 billion euros above the level of 2019, i.e. the year before Corona. According to the Federal Organic Food Industry, organic sales rose to almost 16 billion euros in 2021, which corresponds to an increase of almost six percent compared to 2020.
Organic discounter as winner
The trend also sees discounters as winners in the food sector in the organic segment. The farmers’ association also sees a “trend towards cheap shopping” in the organic sector. According to market research data, organic sales in other supermarkets have remained about the same. After that, there were significant declines, especially in the organic food trade and in direct sales. “Many organic products are only slightly cheaper or the same price in discounters, but the price image obviously steers consumption more than real price knowledge.”
According to Farmers’ President Joachim Rukwied, the fact that prices are likely to be a challenge for many consumers when buying organic food is due to “unprecedentedly exploding prices” for fertilizers and energy, which would also have an impact on the producers’ balance sheets.
Prospects remain burdened by high costs
Accordingly, the short-term prospects for organic farming for 2023 are described as “cautious”. According to the report, the industry hopes that the economy will pick up again or that consumer incomes will improve again, after which demand growth can be expected.
Uncertainty in the industry will remain high in the coming year. Depending on the product area, the prospects look different. For the pig farmers, the income from slaughter pigs was burdened by enormous cost increases. The association fears that the current dramatic decline in pig farming in Germany will increase. In the case of grain products, strong price fluctuations are to be expected. In milk production, too, the costs for feed and energy, for example, will probably be significantly higher than usual in 2023.