BIOFACH 2016: organic products that affect the heart and gut instinct

• Industry representatives to discuss the future of trade
• Trust as a new currency for customers
• food industry moving from science to romance
• Growth opportunities in digital networking

From 10 to 13 February 2016, over 2,400 exhibitors will once again be presenting the diversity of the global organic industry at Biofach, the World's Leading Trade Fair for Organic Food – 200 of which will be appearing at VIVANESS, the International Trade Fair for Natural Personal Care, which will be taking place at the same time and celebrating its 10th anniversary.Besides product-oriented and political topics, the future of trade will be focused on at the two business and trading platforms.As in previous years, the Fachhandelsforum and Fachhandelsclub will be the best places to start for BIOFACH visitors from German natural food specialist stores and health food shops. The course for the future is being reset in the organic market, and the rising demand for organic products is being met by more and more retailers. For example, with Edeka having recently started to stock Alnatura products, the number of sales outlets offering this range alone has now doubled to 7,500 since the beginning of this year. Organic products haven’t been a niche for a long time now, and them working their way into the mainstream is presenting specialist stores in particular with new challenges.

According to the German Federation of the Organic Food Industry (BÖLW), which is BIOFACH’s national supporting organisation and headquartered in Berlin (D), the income from the German organic market had already risen by 4.8 per cent to EUR 7.91bn back in 2014. Specialist stores were the main beneficiaries of this and enjoyed a 9 per cent increase in revenue. In the first half of 2015, German households spent 8.4 per cent more on organic products compared to the same period in 2014, and surveys conducted by Kommunikationsberatung Klaus Braun of Speyer (D) indicate that specialist stores actually saw an increase of 10.5 per cent. By the end of 2015, the country’s total revenue from organic products will have exceeded EUR 8bn.

Industry magazine BioHandel, which is headquartered in Aschaffenburg (D), thought now would be a good time to discuss the future orientation of specialist stores, so recently initiated a market discussion in Fulda (D) on natural food stores. Heinz Grüne of the rheingold market research institute, which is headquartered in Cologne (D), explained what people are really looking for in organic products and revealed that consumers are after individual ways to create a defence shield that counteracts negative feelings. He said: “Organic products are one way people can do something good for themselves.” Referring to the negative headlines written about many different institutions, he added, “People are suffering from the complexity in the world and trusting official bodies less and less.” Mr Grüne went on to say that consumption is one of the things customers use to compensate for these negative feelings, which is where organic products come into play. As with sustainability, animal welfare and responsibility for the environment, consumers are also seeking “a good feeling” when they opt for organic products from Mr Grüne's point of view.

Some competitors have already mastered this tactic of supporting and sympathising with consumers’ feelings with slogans. Edeka, which is headquartered in Hamburg (D), uses the extremely successful “Wir lieben Lebensmittel” (“We love food”), for example. By adding Bickenbach-based (D) organic brand Alnatura to his company’s product spectrum, Edeka’s CEO, Markus Mosa, now wants to strengthen Edeka as a pleasure brand. “Alnatura will set us further apart from our competition and generate additional turnover,” Mr Mosa told Lebensmittel Zeitung, a food newspaper headquartered in Frankfurt (D).

You would have thought this statement would set alarm bells ringing rather loudly in specialist stores, but Mr Grüne actually still sees plenty of potential for specialist stores, particularly if customers are appealed to in an emotional manner. He said, “Adverts for organic products have to affect the customer's heart or gut instinct,” and urged specialist stores to exhaust the possibilities available to them here more fully. He added that organic stores are the only distribution channel offering nothing but organic products after all and are therefore very well set up in terms of trust. “Trust is the new currency for customers,” he said.

Bettina Höchli of the Gottlieb Duttweiler Institute in Zurich (CH) places new future strategies somewhere between romance and technology. She said: “Until now, the food industry has focused on science, but a trend towards romance is emerging now.” She believes consumers are looking for inspiration in markets and that thanks to concepts like local, organic, handmade and manually produced, food is becoming a status symbol for consumers. She explained that when customers physically buy an organic product from a retailer, they also expect some sort of “psychological and bodily regeneration”, and said that new sales concepts for food such as street food markets and festivals are fulfilling this desire. Markthalle Neun, a famous old market hall in the Kreuzberg district of Berlin (D), has developed into an eating and drinking culture centre, for example. The hall’s current use was initiated to secure a future for lifestyles and food that bring to mind rural agriculture and manual production methods employed by local and organic producers.

In addition to returning to the roots of the industry, Ms Höchli noticed further growth opportunities for the organic market in digital networking. She said that many young start-ups who actually have their roots in the IT world are providing established suppliers in the food sector with competition and that investments in these segments by venture capital firms have really exploded in the last two years. The food sector is now making a special effort to invest in IT start-ups as well. At the beginning of October 2015, for example, US online retail giant Amazon positioned itself as a supermarket alternative in Germany too by launching its pantry box there. Then at the end of November, discounter Lidl surprised everyone by purchasing online delivery service Kochzauber. As Lidl told Lebensmittel Zeitung, the delivery service will continue to run independently. Kochzauber enables customers to have food and recipes delivered to their door in boxes, which include fresh products as well as other items. Before it acquired Kochzauber, the only products the discounter sold online were dry goods. Ms Höchli believes that in contrast to all this, however, the organic industry has failed to utilise IT properly so far, and delivery and other services need to be expanded here in her opinion.

Overall, the external market analysts feel there is a lack of distinguishing features in the organic trade and would like to see more new and unusual ideas. “Specialist stores need to move on to the next level,” said Mr Grüne, once again demanding more pioneering spirit from organic retailers. Specialist stores themselves don’t agree that copying regular food retailers is the way to go, however, and are seeking solutions of their own instead. Organic retailer Hermann Heldberg said, “We are different, but we need to communicate why we are different even more powerfully in the future.” Volkmar Spielberger, the managing director at Spielberger GmbH and a member of the management board at the German Association of Organic Processors, Wholesalers and Retailers (Bundesverband Naturkost Naturwaren – BNN), added: “The quality and requirements of natural food specialist stores differ significantly from those of regular food retailers, and the BNN’s and Naturkost Südbayern’s (a trade association for natural food stores in southern Bavaria) product range guidelines prove that. We have earned the trust of our customers, which conventional retailers have yet to really do in the same way. We need to continue to highlight the advantages of natural food specialist stores and the diversity of their product ranges.”

Fachhandelsforum and Fachhandelsclub at BIOFACH

As in previous years, the Fachhandelsforum and Fachhandelsclub at stand 9-551 in hall 9 will be the best places to start for BIOFACH visitors from German natural food specialist stores and health food shops. The partners at the stand will be the BNN and Bioverlag. The forum will be running a programme of discussions tailored to the target group.