Venturing into the organic market

Arguably one of the fastest-growing markets in France, the organic (Bio) market continues to develop with a yearly growth rate of +15.7%. Boasting a turnover of 9.7€ million (2018), we are yet to see this growth decrease. As the organic market began to blossom, it was specialised retailers that first jumped onto this craze, with supermarkets now following suit.According to Agence Bio, 65% of the French population would like to be able to access more organic products in supermarkets, 37% in convenience stores, against only 26% for speciality stores.

To respond to this demand and tap into this rapidly growing market, large retailers have acquired existing specialist organic networks. In 2008, Monoprix purchased Naturalia, and since then, Carrefour created brand Carrefour Bio (with currently 33 stores), then acquired small local chain So.bio (12 stores). Whereas E.Leclerc created E.Leclerc Bio (29 stores). The benefits that these networks hold have enabled supermarkets to quickly advance in the sector.

Benefits such as; direct links with small producers, access to professionals (dieticians, grocers, butchers, etc.), and improved sourcing links to specialised producers, a crucial factor of success in this sector.

To maintain their market presence, large retailers have turned to price, striving to make organic products as accessible as possible through the use of aggressive retail prices. So.bio offers a 15-20% reduction on 5% of their products, whilst E.Leclerc Bio’s products are around 30% cheaper than specialists.

The next few years will be a clear indicator as to whether it is the supermarkets who will dominate this market, or if specialised stores can fight back to remain competitive and keep their Consumers loyalty.

SOURCES: LSA Conso, Les echos