Organic food sector

Topics: Organic food, Organic farming, Germany Pages: 15 (2816 words) Published: September 1, 2014


Micro and Macroenvironmental Analysis
Of the EU and German Organic Food Industry

I. Table of Contents………………………………………………………………………..2 II. List of Tables and Figures……………………………………………………………….3

1. Introduction……………………………………………………………………………...4

2. Macro Environmental Analysis…………………………………………………….......6 2.1. Specific macro-factor analysis……………………………………………………..7 2.1.1. Political factors………………………………………………………………7 2.1.2 Legal and regulatory factors………………………………………….............8 2.1.3 Economic factors……………………………………………………………..9 2.1.4 Socio-cultural factors (and demographic ones)……………………………...11

3. Micro Environmental Analysis…………………………………………………………...12 3.1 Threat of established rivals (intensity of competitive rivalry)……………..............13 3.2 Threat of new entrants……………………………………………………………..14 3.3 Threat of substitute power……………………………………………………….....14 3.4 Bargaining power of buyers………………………………………………..............15 3.5 Bargaining power of suppliers……………………………………………..............17

4. Further relevant specific market issues: recent developments in the target market……………………………………………………………………………...........18

III. References……………………………………………………………………………20

Word count: 2484

II. List of Tables and Figures

Figure1. Organic agricultural land by region, 1999-2010……………………………..………… .5

Figure 2. Sales growth of German market in 2012…………………………………………………..10

Figure 3. Sales growth from 2000 to 2012……………………………………………………………….10

Figure 4. Organic food sales in Germany (2012)………………………………………………………11

Figure5. Number of specialized organic outlets in Germany (2008)…………………………15

Figure6. Porter’s five forces summary………………………………………………………………..…..18

1. Introduction
This document is an information report providing a micro and macro environmental analysis of the organic industry. It gives specific attention to the European and German market and to the retail industry in particular. A brief introduction, also focusing on the reasons and criteria for the selection of such sector, will be followed by an assessment of the aspects at the micro and macro level that affect the players operating in it. To facilitate the analysis I will pretend that the writer of the following report is a manager operating in the broader food industry. Since we operate in the food retail industry, both nationally (Germany) and on the European level, I suggest, as sales director of this company, to consider entering the organic branch, since it has been growing steadily in the last 2 decades. Organic farming can be regarded as a method of production that gives particular attention to environmental protection and animal welfare, thus avoiding the adoption of synthetic chemical means and the production of genetically modified organisms. The industry is highly regulated, requiring producers to acquire special certification to sell goods as organic within given borders. The market has been growing steadily, as suggested above, and is still doing so despite the economic and financial crisis; it grew globally by more than 25 per cent since the start of the global crisis between 2008 and 2011. According to the latest data (FiBL and IFOAM, 2013), 37.2 million hectares of agricultural land are nowadays organic (they were 11 million only in 1999) and 1.8 million producers world-wide are reported (from 252 thousand in 2000). The global sales have also seen a dramatic increase, climbing by almost 200% in the last 10 years. Although this industry accounts only for 1-2% of the total food production globally, almost 10% of the total food sales share is covered by it. Fig 1. Organic agricultural land by region, 1999-2010

Despite the number of producers and retailers, as I will elucidate later in this report, has been increasing year after year in order to cover the high demand for this kind of products (mostly driven by concerns about private health on one hand...

References: Buder F., Hamm U. (2011). Determinanten der Nachfrage ökologischer Lebensmittel. In: Leithold G, Becker K, Brock C, Fischinger S, Spiegel AK, Spory K, Wilbois KP, Williges U (Hrsg) (2011)
Bund Ökologische Lebensmittelwirtschaft (2012)
Ein-Herz-Fuer-Bio (2010). The German Organic Market. [Online].
European Commission Directorate-General for Agriculture and Rural Development (2010). An analysis of the EU Organic Sector. [Online].
Available at :
(2013). Facts and Figures on Organic Agriculture in European Union. [Online].
Available at : http://ec.europa.eu/agriculture/markets-and-prices/more-reports/pdf/organic-2013_en.pdf
Huebner, Kalle.(2009) A Taste for Organic Food, 24 April 2009 [Online].
Tbilisi (2009). The Organic Retail Market in Germany, France and Britain.[Online]. Available at : http://organicconference.elkana.org.ge/files/conf/g/3.pdf
Vaclavik, T.(2009)
Worthington, I., Britton, C. (2006). The Business Environment, p. 41-48.
Willer, H., Lernoud, J., Research Institute of Organic Agriculture (FiBL) ,Frick, Switzerland and Schaack, D., Agricultural Information Company (AMI), Bonn, Germany.(2013). The European Market for Organic Food 2011.[online].
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