Country Reports - France

France's Healthy Organic Food Market

Becomes More Mainstream

May 2017

Country Reports - France

France's Healthy Organic Food Market

Becomes More Mainstream

May 2017
France is showing high inclination for organic food & beverages. Organic food products saw historic growth in 2016, according to new information announced by Agence Bio. The agency estimates that the organic market saw an increase of approximately 20 percent in the first semester of 2016 compared to the same period in 2015, which was also a period that saw rapid growth. The market for these products is being accelerated by health conscious consumers, well supported by the country's high disposable income, and wide product offerings from specialist organic stores, as well as supermarkets & groceries. Additionally, surging chemical and pesticide usage in standard food & beverages has made consumers shift towards healthier products with high nutritional content and better taste.

Strong growth in recent years has buoyed France's position as the third largest organic food products market globally, after the US and Germany, according to a recent report by MarketLine. Upsurge in the number of diseases caused by consumption of conventional food & beverages, changing consumers' taste and preference, and growing number of specialist organic stores are just a few factors driving the market for organic food & beverages upwards. Moreover, the industry has enjoyed an appreciable performance following the institutional support from the French Government and European Union, according to a recent report by Market Publishers. Improvements in macro-economic policies such as low inflation and low interest rates have also boosted consumers' sentiment and the organic industry has emerged as one of the beneficiaries. End 2016, the organic market reached nearly USD7.6 billion in sales, an increase of more than USD1 billion in only one year, according to Agence Bio. Supply is continuing to develop at a rapid pace to keep up with consumers' voracious demands for new organic products that respect humans and nature. With such a great potential for economic gains, organic farmers are increasing in numbers. More than 21 new organic farms were created each day in France during the first 6 months of 2016. On June 30, the number of French organic producers reached nearly 32,000. By the end of the year, the agency estimated that the area devoted to organic agricultural production could exceed 1.5 million hectares, approximately 6 percent of the agricultural surface of France. Businesses in agricultural processing and distribution are also more and more involved in organic food production activities. During H1 2016, 1,200 new operators joined the ranks of the organic food industry in France, currently numbering about 15,000 across the country. On June 30, 2016, France had more than 45,000 organic businesses. According to Market Publishers' report, the organic food & beverages market is forecast to grow at a CAGR of over 6 percent during the forecast period (2016 - 2021). In 2015, 'Organic Dairy Products' category accounted for the largest market share in the country's organic food market, and was closely followed by 'Organic grocery products including sweet and salty groceries. The North West region is the largest regional market for organic food & beverages in France as it is home to tens of millions of French consumers with high personal disposable income. The organic food & beverages market is highly competitive in France, with large number of organic food companies operating. Some 200 new specialist organic stores opened in the first half, noted Agence Bio, supporting a 25 percent rise in sales in specialist outlets. Supermarkets have also reported double-digit growth in organic sales, with the agency estimated a first-half rise of 18 percent. Carrefour, Europe's biggest retailer, is developing standalone organic food stores in Paris, as well as selling organic brands in its supermarkets, and this year acquired e-commerce organic supplier Greenweez. The group said its French organic sales growth continued at double-digit levels in the first half after rising 11 percent in 2015. However, a poor cereal harvest in 2016, when yields at organic farms dropped by 40-50 percent, reduced supplies of popular organic items like bread, Agence Bio said.