Sweden: The network of the organic food retail market

organic food retail market in sweden

Sweden has among the highest consumption of organic foods in the EU. Foods such as milk, eggs, yogurt, coffee, processed vegetables, juices, vegetable oils and dairy products, have enjoyed a substantial increase in sales in recent years. In particular dairy products account for one third of the organic products sales in Sweden.

Sweden as a EU member is required to comply with certain regulations in order to import organic produce. However, Krav is the main Swedish certification organization of organic products. Although there are other organic food certification companies in Sweden except for KRAV, the majority of the organic products in the stores are KRAV labeled (77%).

The Swedish food retail market is defined by an oligopoly, as the three largest super-markets chains control about 85-90% of the Swedish market. These are in order of ranking the ICA, Coop and Axfood and represent more than 50% of the organic market in Sweden.

The retail chains’ comprehensive coverage of the whole country, combined with their vertically integrated structure (imports, wholesale and retail trade are carried out within the same company), makes Sweden an interesting market for exporters seeking long-term stable and predictable sales.

The largest retail chain is the ICA, with a market share of 45-49% and more than 1,350 stores in Sweden and 2,150 stores throughout Scandinavia and the Baltic countries. According to a representative of ICA who talked to AgroTypos the shops of this chain have different profiles depending on the location, product range and store size. The ICA Nära shops, ICA Supermarket and medium sized supermarkets are usually in neighborhoods, while ICA Kvantum and MAXI ICA hypermarkets are usually located outside the city centers and have a very wide range of products, even furniture and various gardening tools. In 2008, ICA successfully started to sell organic products called «I Love ECO». Among the organic products of the ICA, dairy products, buttermilk, natural yoghurt, coffee, eggs, and bananas are the most popular products based on sales levels.

The second largest chain of super-markets is Coop, with 21-23% market share, 800 shops and also the highest market share of organic products, about 7%. Within the chain Coop, the Konsum Coop is the most specialized unit in the marketing and promotion of environmentally friendly products. The organic products of Coop tagged «Änglamark» are distributed on the Swedish market for 20 years and considered as the most important brand for organic products in Sweden. All Coop food stores have KRAV certification regarding the organic foods.

In the third place is the retail chain Axfood, with 18% market share and more than 230 stores under the Hemkop, Willys and PrisXtra brand names. The Axfood has a market share of organic products, about 2.6%, and since 2008 has organic products under the name «Ekologiskt Garant».

Regarding the organic beverages sector, the main feature of the market is a strict monopoly status on alcohol sales, called Systembolaget, which has the exclusive right of retail sale of wine, beer and other alcoholic beverages with more than 3.5% alcohol content. Systembolaget has a network of 421 stores, more than 500 dealers in small communities and 433 suppliers worldwide. Total sales exceed annually 3 billion euros. Beer is the drink with the highest sales, almost 50% of total sales, followed by wines with 41% and then follow the other alcoholic beverages. The interest of Swedish consumers for organic wine and beer increasing. During recent years, Systembolaget is one of the largest sellers of organic products. It is significant that in 2011, sales of organic products of Systembolaget increased by 23%, while total sales increased by only 0.3%. There are more than 150 organic products available at Systembolaget, 75% of which is for wine, 18% for beer and the rest for other spirits.

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