Insights

The Rise of Biological Products in Switzerland: Demanded by Consumers or Driven by the Market?
Article

The Rise of Biological Products in Switzerland: Demanded by Consumers or Driven by the Market?

By Markus Brand, Senior Analytic Consultant

While there aren’t a lot of trends in the Swiss retail trade that show regular, positive development throughout the years, a major exception is sales of organically produced food. In the last rolling year, we measured an increase of around 11% — even higher than the 8% experienced the previous year.

What’s driving this increase? Is it really due to consumer demand or pressure from the retail trade? In our retail panel, we see the number of products increasing even more strongly than the sales. The past year we’ve counted just under 13% more organic products per average business than in the previous year.

And while our retail panel can show us whether the trend is consistent across all channels and product groups or if only individual players benefit from it, to have a better assessment on the likelihood of continuity, we need a deeper understanding of how strongly consumers really connect with this trend.

Using our Household Panel, we see that practically every household buys organic products at least once a year. However, since almost 80% of all sales are made by only a third of consumers, we’d like to see if there is a visible group of consumers who deliberately and consistently buy organic products.

The chart below shows the percentage of households that buy organic products per proportion of their shopping basket. We modeled the lowest rate of 5%, assuming these households purchased organic not because due to preference, but rather because of promotions or lack of alternatives. In the last year, for example, 23.5% of households purchased 5-10% organic products — a noticeable increase from the previous year.

Using a three-year trend, we see a noticeable increase in the number of households that buy more than 5% of organic products. Furthermore, we see a growing trend of households purchasing 10-20% biological products — 16.3% this year compared to 14.4% last. More than 50% of households already buy organic products regularly,  not for the entire shopping basket, but for certain product groups.  And the number of households that purchase more than 40% organic products is also growing steadily.

These are clear indicators that the organic trend has become firmly established in purchasing behaviour and we expect a further increase in the coming years.