The consumption of organic food has expanded strongly in Denmark during the last decade, thanks to the consolidation of new habits of healthy and environmentally responsible consumption, supported by the strong promotion of local authorities and producers. According to GfK ConsumerScan, sales of this type of food have risen from around 500 million euros in 2007 to over 2,140 million euros in 2018, after increasing by more than 14% compared to the previous year.
Nearly 80% of the population consume such products at least once. This has led to this market having one of the highest per capita costs in the world, only behind Switzerland in 2017, with 278 euros, and enjoying the highest share of organic food sales, weighing 13.3% of the total in that year.
At this point, it is worth recalling the definition provided by Regulation (EC) 834/2007 (which is the main instrument for regulating the sector in the European Union of organic production as "a general system of agricultural management and food production that combines best environmental practices, a high level of biodiversity, the preservation of natural resources, the application of high animal welfare standards and production in accordance with the preferences of certain consumers for products obtained from natural substances and processes". The new Regulation (EU) 2018/848, which repeals the previous one and will apply from 1 January 2021, extends the scope and control of organic products, while increasing the responsibility of operators along the supply chain.
As pointed out by the Economic and Commercial Office (Ofecomes) of the Spanish Embassy in Copenhagen, "Community regulations establish the legal basis for the production, import, labelling and marketing of organic food in all EU member states, but these regulations can also be supplemented by the national legislation of each country". This is the case in Denmark, which has developed an internal regulation that complements the previous one and includes a national organic certification, much more extended and recognized in the country, the Ø-mærke. The label is awarded to articles that have been at least packaged in the country and, in any case, to products subject to the control of local authorities.
The times when most organic food was sold through small health shops have given way to a new phase in which the large distribution chains and online shops are the main players. The latter have accumulated joint sales estimated at around 12.9 billion crowns (more than 1.726 billion euros) in 2018, while the former have seen their share of the market fall below 3% in recent years, although the strengthening of home service systems could offer greater diversity in an area that is tending towards concentration.
Another channel that is becoming increasingly relevant is the so-called foodservice, which refers to food services in public and private institutions. Sales through these canteens have quadrupled in less than seven years and now represent more than 15% of the total. Their future development is also favoured by the strategic plans adopted by the Danish government to promote both the purchase and consumption of more organic food in this type of establishment.
While Denmark has a significant local production of organic food, most of it is concentrated in the meat, egg and dairy segments. This reality has led to an increase in the traditional Danish trade deficit in the sector, which stood at around 200 million euros in 2018, as most other products have to be imported to satisfy the boom in demand, which sometimes causes certain problems of shortage.
In this sense, there is a concentration of purchases abroad in various categories, including fruit and vegetables, which accounted for almost 40% of imports in 2018, and cereals, with a 15% share in that year. The rest of the EU countries, led by Germany, the Netherlands and Italy, are the most important suppliers to the Danish market bringing together around 85% of the total share. Most of these countries have seen a notable increase in their stocks in recent years, partly due to the value of a culture of proximity and traceability in this market.
Spanish organic food exports to this destination have multiplied almost fivefold between 2012 and 2018, going from around 13 million euros in the first year to over 75 million in the last financial year, which has enabled our country to become the fourth largest supplier to Denmark, with a market share of over 12%.
This high level of dynamism in the activity of our companies in the sector is mainly based on the growth of exports of vegetables and fruit, which usually account for more than 80% of the total, but there has also been an increase in interest in other types of products, such as organic drinks.
The Albet i Noya winery has been exporting organic wines to Denmark since 1978 and has been able to verify first-hand the profound transformation that this market has undergone, especially in the last decade. Its Sales Director, Gonzalo Cle de Diago, emphasised that "it is vital to have a project with a story to tell, to reach the consumer not only with the quality of the products, but also by sharing values of sustainability, respect for the environment and ecological awareness". "Of course", continues Cle de Diago, "having a good partner in the country with whom we can go hand in hand is fundamental in order to access the different channels".
However, as pointed out by Ofecomes in Copenhagen, the perception of our foodstuffs with an ecological seal "faces a problem of identification on the part of Danish buyers". The majority of our transactions are for fruit and vegetables which are usually sold in bulk and there is also a predominance of white brands which means that many buyers do not associate organic produce with Spanish origin.
Consumers are becoming increasingly informed and demanding quality, healthy and environmentally friendly products, so the demand for food that meets these expectations will continue to grow in the future and there is a strong likelihood that there will be a reduction in prices due to pressure from private labels. "The variety of these private labels is increasing and the price gap with the basket of non-organic goods is narrowing year by year," the Copenhagen-based Ofecomes points out.
In addition, the arrival of new foods in their ecological version is also expected, as well as a greater geographical diversification of consumption, extending from the large Danish cities to practically the entire country. In this way, the opportunities for Spanish production and marketing companies will continue to increase, but it is also very possible that other international competitors will acquire greater weight in the local market, so that the image will continue to have a relevant weight.
Thus, for example, Gonzalo Cle de Diago underlines the importance of continuing to associate his wines and sparkling wines with quality and points out that his desire is to reach both large-scale distribution and the premium Horeca channel. "That's why we have adapted some products, selecting those wines that are more in line with Danish tastes and palates and offering modern and attractive packaging for the new generations", he concludes.
Another of the sector's trends is the launch of new foods in market niches that do not yet have a developed organic variety. Furthermore, as in the conventional field, there are two clear and so far little exploited entry points: the gourmet category and prepared food. This also means that the consumption of organic snacks and drinks is on the increase.