Kai first discussed the growth rates of the major organic markets. The US in 2012 showed the greatest growth of 10%, followed by Italy with 7.5%, France with 7% and Germany with 6%. Growth has been heavily diluted in recent years, for example, Germany in 2006 grew by 18% and the growth rate in the US was 21%.
Kai Kreuzer (left) held his presentation on a canal boat trip in Amsterdam.
He further explained that the organic markets in The Netherlands, the US, France and Germany grew because organic products were more widely available. "The availability in East European countries is worse and that is seen by the small market share of less than 1%."
Price difference must decreaseKai also gave his views on the prices charged for organic products. "A one to 30% higher price is accepted. In many cases the price difference is between 30 to 100% and consumers are often shocked at the price difference."
Kai proves that an average price difference of less than 30% is achievable by giving an example from Tegut in Hessen. He compared the price of a kilo of apples, 500 grams of noodles, a kilo of rice, a litre of milk, 250 grams of butter and a kilo of potatoes which was around an average price difference of 28% between organic and conventional products. Tegut has her own idea about organic, after 25 years the organic portion of the shop is around 20%."
He explained further that the price difference in Eastern Europe is really too big. "There buying organic is only possible for the elite and there is no future." Kai recognises that a lower price cannot be realised overnight, but emphasized the importance.
Role for government
For the further growth of the organic branch, he sees a role for government to play on various levels. "Farmers need a stable environment. In every country subsidies are used and this often changes over time. An organic farmer does not know what the situation will be in 5 years' time. Kai also hopes that in the future the certification costs will be completely covered and there would be more support to use organic products in canteens. "There is also the need for more advice for farmers, processors and traders. In Southern and Eastern European countries, people also need help to develop production and market structures."
For more information please contact Kai Kreuzer.