Scrum

The aspects of marketing organic food mentioned in chapters 3 to 6 above all serve the main purpose of furthering the position of organic products in the food market. The organic sector itself has an obvious interest in advancing their products and this activity can be highlighted by recalling part of the reasoning in previous chapters. Promotion of organic food was the topic of chapter 5. It was concluded that systematic promotion through the professional media in recent years have been few and small scale – and absent in five countries – with private firms more active than organic agriculture associations and farmers.

In chapter 3, major differences between countries in the composition of sales channels appeared. Originally, a rather clear separation of organic food from the mass food market appeared due to organic food being kept out of supermarkets. Today, the sales channels for organic food in all countries is composed of a mix of retail outlets including supermarkets. In most countries, direct sales from farmer to consumer is of some importance together with sales through specialised shops. However, in Scandinavia, Austria and UK supermarkets are clearly the dominant sales channel.

The three types of sales channels mentioned pose different challenges in terms of marketing efforts. In direct sales and sales through specialised shops, the main issue is to guarantee the origin of products and to recommend products actively to consumers. When supermarkets are included in the sales channels, a decisive change of needs for promotion and other marketing efforts occur. On the one hand supermarkets represent an option for communicating with a much larger audience and many other consumer segments than those attracted by direct sales and specialised shops. Supermarkets represent large scale and broad range. On the other hand, supermarkets represent a challenge as organic food is competing directly with non-organic products. Usually this means that organic food is only allowed a small share of the sales area – more or less corresponding to the share it represents of total sales in the outlet in question. Both aspects, the opportunity for reaching new and larger consumer segments and the direct competition for consumer attention, imply other and more professionalised demands on marketing of organic food than just presenting products and define them by means of a label. Active relations between producer/sellers and consumers are replaced by passive relations in which the products must ‘speak for themselves’ and need strong back up in terms of advertising, sales promotion, and product innovation to obtain and maintain consumer attention.

marketing efforts. In all kinds of sales channels, some kind of

professionalisation of marketing efforts is expected to be developed over time. Professional marketing of small quantities of food – whether directed towards sales through supermarkets or other sales channels – must imply that the scarce resources are targeted at reaching well- defined and selected consumer segments and that distinct themes are emphasised in order to obtain the largest possible effect on demand. This can be achieved by combining deliberate considerations of the type and level of promotion with at least one of the three other Ps in the

marketing mix mentioned in chapter 1 (place, product and price). In table 8-1 it is reported for each country when this kind of professional marketing activities began in specialised organic food shops and supermarkets respectively.

It appears from the table that in five countries, Finland, Ireland,

Luxembourg, Greece and the Czech Republic, no professional marketing efforts were found at all. This is consistent with the findings in table 5-2 above. In all other countries, professional promotion has taken place through supermarkets, with Sweden and Denmark – both with large organic sectors – as the earliest countries, starting in 1986 and 1989 respectively. In Norway and Italy, professional marketing through supermarkets started latest – in 1996 – and in Belgium, Spain and France it began only one year before. Except for Italy these countries all have minor organic sectors.

It further appears from the table that professional marketing in

supermarkets has not consistently developed on the basis of professional marketing experience obtained in specialised organic food shops. This holds for Sweden and Denmark, which are still characterised by the absence of professional marketing efforts directed at specialised organic food shops. In both of these countries supermarkets are the dominant sales channel. A similar lack of marketing efforts directed at specialised shops is found in two other countries where supermarkets are the predominant sales channel for organic food, Austria and UK (see chapter 3). It seems likely that marketing efforts in these countries are

systematically more intensive and responsive to supermarket demands than in countries where professional efforts directed at sales through specialised shops have also been developed.

In all countries where supermarkets are less important as a sales channel, the professionalised marketing efforts for organic food started earlier in specialised shops than in supermarkets. In the table, two subgroups emerge among these countries. In Belgium, Germany, Spain, Italy and Portugal – except Germany all countries with small markets – professional marketing started in specialised organic shops three to five years before it began in supermarkets. In France, the Czech Republic and Norway – countries with small organic food markets too – the reported start of professional promotion through specialised shops dates back to the 1970s. The difference between these two groups seems artificial, due to different understandings of the meaning of professional marketing. It is likely that, in the latter group, the starting year of professional

marketing efforts is equalised with the year when products first became available in specialised organic food shops. In the other countries, it seems likely that the years reported are based on special promotion

efforts carried out. From Germany it is reported that even though professional marketing efforts of specialised organic food shops took off in 1989, these efforts were significantly enlarged in the mid 1990s after several supermarket chains in 1994 had embarked on large-scale campaigns for organic food.

Table 8-1: Year when professional marketing of organic products began in different types of outlets

In specialised organic food shops In conventional supermarkets

AT – 1994 BE 1990 1995 DE 1989 1992 DK – 1989 ES 1990 1995 FI – – FR 1970-75 1995 GB – 1992/93 GR – – IE – – IT 1993 1996 LU – – NL 1990 1991 PT 1987 1992 SE – 1986 CH 1975 1993 CZ – – NO 1970 1996

Source: Own data

From a developmental point of view, it seems that mass markets have been reached with success in a few countries where the promotion efforts have focused on supermarkets. With the exception of UK, large organic market shares have been obtained in these countries. Hence long-term professional promotion directed at supermarkets seems to be an important prerequisite for expanding the organic food market, while promotion directed at specialised organic food shops seems to have less effect, not least because the market potential in these shops is much smaller. This is in accordance with the conclusion of chapter 6 on prices.

8.2

Impact of EU and national regulations on supply and demand