Reduced spending in organic/eco products had significant impact on the market place
The last years inflation was the highest in decades in the EU and in other part of the worlds. It was accompanied by a reduction of consumer spending and a reconsideration of where to spend money.
Lebensmittelzeitung reported in February 2023, that in 2022 the eco/ organic product outlets experienced significant losses in turnover by 12,3%, returning to the level of 2019 after a significant increase in 2020 and 2021. This led to the closure of several outlets.
A shift in consumer behaviour led to the reduction of organic/eco products
Also within other retailers this shift was mirrored by changes in the assortment. Carrefour introduced the eco Planete line of laundry and home care products in 2019. In 2022 it was withdrawn and is no longer available.
A paradox
Surprisingly the inflation resulted in a much stronger price increase in conventional products compared to organic product. This decreased the price gap between the two, basically increasing the attractiveness of organic offering.
However the consumers turned to conventional products in order to leverage their economical situation.
“As long it is cheaper I’ll buy it”
Vegan diet is not necessarily a commitment to veganism.
Organic food is often correlated with an increase in vegetable produce and vegan products. Also in this timeframe the market saw a reduction in turnover with vegan products in comparison to comparable traditional products.
Obviously a fair share of the consumers buy vegan product to enrich their diet with vegetable-based products. It is a convenient, no hassle approach to eating more veggies.
“If I buy vegan, I know it’s veggie”.
Needless to say that it resulted in a decrease in the sales of some vegan products with consumers switching back to cheaper, conventional products.
Is it then fair to say that buying organic products is not a commitment to an organic lifestyle?
The latest inflation period uncovered a novel group of consumers. Before we discussed, LOHAS, Vegetarians, Vegans as distinct consumer groups. The last years has demonstrated that a fair share of these consumer groups are “opportunistic” in the sense that they buy sustainable and organic and vegan as long as they believe they can afford it and they are happy to switch to conventional products as they see fit.
And who can blame them – a pack of four hamburger patties cost three to four Euros – the vegan alternative costs seven to eight – the organic meat alternative up to ten Euros.
The level of sustainability in the consumer behaviour is predominantly driven by price and disposable income.
