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SWEDEN

Introduction

With a population of just 8.9 million people, Sweden is one of the European Community’s (EC) smaller national markets for foodstuffs. Of the country’s total supply of food and beverages, about 80 percent is produced domestically while imports account for 20 percent. However, for fresh fruit and vegetables, the import share is substantially higher, over 70 percent.

Since the beginning of the 1990s, the Swedish Government has actively supported organic farming, resulting in a steady growth of organic land areas. Furthermore, several important market players within the retail, wholesale and industrial sectors have in recent years committed themselves to promote a wide range of organic food products.

Despite the fact that the market for organic food products has shown double-digit growth rates of the past five years or so, especially within the dairy, cereal and the fresh produce sectors, the overall organic market share is still low, about one percent of the total food consumption. However, the large supermarket chains, which largely control the retail distribution of organics in Sweden, have all set ambitious targets for organic items that if implemented, would substantially increase the current market size. Trade sources are therefore confident that organic foods could account for three to four percent of the total Swedish food consumption within a few years.

1. Organic farming in Sweden

1.1 Overview on the development of organic agriculture

Of Sweden’s total land area, 450 000 square kilometres, half is covered with forest. Its arable land amounts to only 2 800 000 ha, about seven percent of the total land area. The temperate climate is favourable for farming, cold winters (that inhibit infestations of many crop pests) and warm summers (with days of long sunlight) allows production of high quality vegetables and berries. Nonetheless, agricultural conditions differ widely between regions, which is shown by the fact that farmlands in Scania in the south enjoys up to 100 days’ longer growing season than in farmlands in the far north.

Organic farming has since around 1990 become an increasingly important factor in the national agricultural policy. In 1994, the Swedish parliament set a goal that by the end of 2000, ten percent of the arable lands should be using organic methods. The goal was reached, in fact eleven percent of Sweden’s arable land was in 2000 either certified organic or was using the national support programme for organic farming, the highest recorded share within the EC.

The Swedish government launched a new overall target at the end of 1999 - 20 percent organic lands in 2005. At the same time the Ecological Farmers Association adopted a target that implies that by 2010, 30 percent of all farmland production should be organic.

However, according to Swedish regulations, products produced at these farmlands may only be marketed or sold as "organic" if the cultivation has been certified by any of the two official national organizations for control of organic farming, KRAV and Demeter. Of these, KRAV is the dominant control organization. Most Demeter members are also members of KRAV.

The land area under KRAV control amounted to 139 000 ha at the end of 2000 corresponding to 5.1 percent of the total farmland (excluding permanent pasture lands).

Grass and clover leis, including green manure and fallow fields, occupy the largest share of certified KRAV-lands, about 67 percent, while the remainder mainly consists of lands for producing cereals (about 30 percent). Only a small fraction, or 1.5 percent, was used for production of fruit and vegetables (see Table 1.2).

Approximately 3 300 Swedish farms were at the end of 2000 affiliated with the control system of KRAV, of which about 10 percent were engaged in production of fruit and vegetables.

1.2 Organic fruit and vegetable production

At the end of 2000, the total farmland area under KRAV-certified fruit and vegetables production amounted to 2 300 ha, of which over 90 percent was under vegetables.

1.2.1 Production of fruit and berries

Commercial production of organic fruit and berries covered about 210 ha in 2000, of which fruit accounted for 65 ha and berries for 145 ha. There has been a decline in the production area in recent years, but due to higher yields, the actual production output has been relatively stable.

Apples is the main commercial fruit product, but small volumes of pears, plums, cherries, and whitehart cherries are also cultivated.

There are at present only two commercial producers of organic apples in Sweden. The total production of commercial apples is approximately 20 000 tonnes per year, of which organic items account for 1-2 percent (200-400 tonnes). Within 3-5 years, the share should rise to 2-4 percent, according to one of the leading distributors. It should be noted that in addition to commercial growers, there is also a substantial production of home-grown apples for home consumption, approximately 50 000 tonnes.

Due to lower yields, it is estimated that the cost to produce organic apples is 75-100 percent higher than conventional ones.

The production of organic berries is almost entirely made up of strawberries, which is a very traditional Swedish dessert item, especially during the summer season.

1.2.2 Production of vegetables

Organically outdoor grown vegetables account for approximately 5-6 percent of the total farmland area of production of outdoor grown vegetables in Sweden. However, since the yield of organic vegetable production is on average 65-75 percent of the yield of conventional production, the actual share of the total vegetables production is lower, approximately 3.5-4 percent.

Since 1997, the area used for growing organic vegetables has shown a relatively modest enlargement, or about 8 percent. However, due to a rise in production yields, the actual increase in production is substantially higher.

In 2000, production of organic vegetables covered an area of 2 100 ha, of which over 80 percent (or 1 700 ha) was used for growing of potatoes and carrots. It is estimated that organic potatoes account for about three percent of the total potato acreage. The remaining 400 ha was mainly used for the production of beetroot, onions, cabbage, swede, peas, turnips, horseradish, leeks, and squash. Of these products, beetroot and peas are mainly intended for the domestic food processing industry.

Due to climatic conditions, products such as tomatoes, cucumber and iceberg lettuce are difficult to grow organically in Sweden, which explains why the outdoor production of these items is very limited. On the other hand, production of these items in greenhouses is more important.

Organic greenhouses covered about 80 000 square metres in 2000, of which 90 percent was made up of tomatoes and cucumber. Other important greenhouse products are green peppers, lettuce, and fresh herbs.

Of the total acreage of greenhouses, organic production accounts for six percent. However, due to lower production yields, the organic share of the production is only four to five percent. Some products have a higher share, e.g. tomatoes, which account for five to six percent of the tomato production.

One greenhouse product group has during the last couple of years shown a very large increase, namely organic vegetables grown, distributed and sold to consumers in pots. The product range comprises some 25 different products of which 45 percent consist of parsley, dill and chives, 30 percent of different kinds of lettuce, and 20 percent of fresh herbs.

Table 1: Development of KRAV-certified farming 1995-2000

Conventional farmlands and organic KRAV-certified farmlands (including lands under conversion). Note that permanent pasture lands are not included in these figures.

Cultivated acreage (hectares) of which:

No. of KRAV
certified - farmers

Year


KRAV-certified

KRAV share (%)

1995

2 767 000

44 000

1.6

2 473

1996

2 812 000

71 000

2.5

2 741

1997

2 799 000

95 000

3.4

2 733

1998

2 784 000

103 000

3.7

2 870

1999

2 747 000

122 000

4.5

3 253

2000

2 747 000

139 000

5.1

3 328

Source: KRAV.


Table 2: Type of crops on KRAV-certified farms 1999-2000

Organic farmlands (certified and under conversion by KRAV) including permanent pasture lands

Crops

Acreage (hectares)

Share (%) 2000

1999

2000

Fruit & vegetables

2 278

2 315

1.5

Cereals

44 614

44 639

29.0

Oilseeds

2 343

1 362

0.9

Pasture, temporary & permanent

95 184

94 826

61.5

Green manure & fallow fields

10 519

10 420

6.8

Other

526

612

0.3


155 463

154 174

100.0

Source: KRAV.


Table 3: Development of organic fruit and vegetables - farmlands 1997-2000

Organic farmlands producing fruit and vegetables, either certified or under conversion by KRAV

Crops

Acreage (hectares)

Share (%) 2000

1997

1998

1999

2000

Potatoes

1 244

1 007

1 444

1 521

65.7

Vegetables

704

660

581

583

25.2

- Carrots & other roots



165

204

8.8

- Other vegetables



416

379

16.4

Fruit & berries

220

294

253

211

9.1

- Fruit



77

65

2.8

- Berries



176

146

6.3


2 168

1 961

2 278

2 315

100.0

Source: KRAV.

2. The Swedish market for organic fruit and vegetables 2.1 Overview of the market for organic food and beverages

During the past decade the Swedish market for organic food has expanded rapidly, about 20-25 percent annually, but had there been more supplies, the increase would have been even higher. There are now over 3 000 certified organic products in Sweden, of which approximately 200 are different kinds of fresh fruits and vegetables.

Consumption of organic foods amounted in 2000 to roughly 90 000 tonnes by volume and SKr1 350 million by market value (incl. 12 percent VAT). This means that organic products have reached an estimated market share of about 1.3 percent by volume and 0.8 percent by value. It should be noted that these figures cover all consumption of food and beverages in both the retail and restaurant sectors. If only retail sales are included, the organic share is estimated at 1.5 by volume and 1 percent by value. In general, organic products have a much higher share within the retail sector, while the share within the restaurant sector is substantially lower. Another factor to consider is that the figures also include product groups, which today have no or few organic items available, such as fish and crustaceans, confectionery, and soft drinks, beer, and spirits.

The organic consumption is at present dominated by dairy products and fresh fruits and vegetables, which together account for about 80 percent of the volume and almost 65 percent of the market value (see Table 4).

Table 4: Consumption of organic foods - 2000

Note: figures are estimates based on information from trade sources. Consumption value incl. VAT (12 percent)

Product group

Quantity (tonnes)

Value (SKr million)


Share (%)


Share (%)

Dairy products, eggs & fats

56 000

62

600

44

Fresh fruit & vegetables

19 000

21

280

21

Processed fruit & vegetable products

2 500

3

60

4

Cereal & bread products*

5 000

6

90

7

Meat & cured meats

4 000

4

150

11

Fish & crustaceans


0


0

Coffee, tea & cocoa

1 000

1

90

7

Other food products**

2 500

3

80

6


90 000

100

1 350

100

* Incl. rice and pasta

** Ice cream, chocolate, confectionery, sauces, sugar, spices, salt, honey and beverages (mineral water, soft drinks, beer, wine and spirits)

Source: Fox Research (based on trade sources).

2.2 Market for organic fruit and vegetables

The Swedish market for organic fresh fruit and vegetables amounted to about 19 000 tonnes in volume and SKr280 million (including VAT) in market value in 2000. This means that organic fresh produce had gained a market share of 1.4 percent by volume and 1.7 percent by value (see Tables 5 and 6).

Trade sources estimate that the annual rate of growth has on average been 20-25 percent during the last five years. For 2001, a 30 percent increase is expected. The strong increase in demand is expected to continue also in the next few years.

2.2.1 Market for fruit and berries

The consumption of organic fresh fruit and berries amounted to around 4 000 tonnes in 2000, which corresponds to a market share of 0.8 percent. By market value, the consumption amounted to about SKr80 million including VAT (share 1.1 percent).

The main organic fruit items are bananas, apples and pears, and citrus fruits.

Bananas, which was introduced as organic in Sweden in 1994, account for about half of the organic fruit supply. During 2000, consumption of organic bananas had increased to approximately 2 000 tonnes, which equals about 1.3 percent of the market for bananas (by value, the market share is 1.7 percent). The forecast for 2001 is 2 500 tonnes. As supplies increase, the organic market share is expected to reach at least 3-4 percent in the near future.

Consumption of organic apples and pears amounted to about 1 000 tonnes in 2000, which corresponds to 0.8 percent of the supply of apples and pears.

Even if the market for organic citrus fruit has expanded rapidly in recent years, it is still relatively insignificant, about 600 tonnes, well below one percent of the citrus fruit supply. The present product range mainly consists of oranges, satsumas, clementines, grapefruit and lemons.

The relatively low market shares for both apples, pears and citrus fruits is mainly due to inadequate and infrequent supplies. Since these fruits all have a large market in Sweden, trade sources regard the organic items as having a much larger potential.

Kiwi has become a popular organic, since it has good durability. Other important organic fruit items are plums, peaches, melons, and grapes, as well as strawberries and other types of berries. There is also a growing consumption of organic tropical fruit, especially mango, papaya and pineapples.

According to a leading retailer, there is high demand for the following organic fruit items: apples, pears, oranges, satsumas, lemons, grapes, papayas, passion fruit, figs, strawberries, raspberries, blueberries and currants.

2.2.2 Market for vegetables

The consumption of organic vegetables amounted to approximately 15 000 tonnes in the year 2000, which equals 1.8 percent of the consumption of fresh vegetables. The estimated market value amounted the same year to SKr200 million (including VAT), equalling a market share of 2.1 percent.

For 2001, the leading suppliers estimate a market increase of another 30 percent, which means that the market should reach almost 20 000 tonnes by volume and SKr260 million by value.

Potatoes account for a little more than half of the Swedish market for organic vegetables (corresponding to about 8 000 tonnes in 2000). This means that organic potatoes have gained a 2.1 percent share of the market for fresh potatoes. However, within the retail segment, the market share is about 2.5-3 percent, while the share within the restaurant sector is well below 0.5 percent.

Another important organic item is carrots, which during 2000 gained a consumption level of about 2 500 tonnes, corresponding to about three percent of the consumption of fresh carrots.

Trade sources are of the opinion that if more organic potatoes and carrots were available, they would most probably achieve much larger market shares.

Other important organic vegetables are tomatoes, cucumber, lettuce, onion, cauliflower, cabbage, mushrooms, paprika, avocado, and fresh herbs. Even if there are no official figures available, trade sources estimate that during 2000 the consumption of these products was about 4 500 tonnes.

Even if there is a growing demand for all types of organic vegetables, retail trade sources list the following products as of especially high interest: garlic, peas, beans, asparagus, chilli peppers, okra, and different kinds of lettuce (including iceberg lettuce and endive), as well as mixed and sliced lettuce in ready-packed consumer packages.

There is also a growing demand for fresh organic herbs (i.e. basilica, thyme, tarragon, coriander, savoury, marjoram, oregano, rosemary). The market for alternatives to potatoes, such as sweet potatoes and cassava, has also increased in recent years, which means that there should also be a market for such organic products.

Table 5: Organic share of fresh fruit and vegetables - consumption and market value 2000

Direct consumption of fresh fruit and vegetables through the retail and restaurant sectors. Value refers to market value prices, incl. VAT (12 percent)

Product group

Quantity (tonnes)

Value (SKr million)


Share (%)


Share (%)

Certified organic products

19 000

1.4

280

1.7

Conventional products

1 303 000

98.6

16 680

98.4

consumption

1 322 000

100

16 960

100

Sources: Swedish Board of Agriculture, Fox Research (based on trade sources).


Table 6: and organic consumption of fresh fruit and vegetables - 2000

Note that while figures for consumption are taken from official data for 1999, the figures for organic consumption and market value are based on trade estimations for the year 2000. Market value is incl. VAT (12 percent)

Products

Quantity (tonnes)

Value (SKr million)


Organic share (%)

Organic


Organic

Organic share (%)

Fruit & berries







Bananas

160 000

2 000

1.3

2 300

40

1.7

Apples & pears

125 000

1 000

0.8

1 640

18

1.1

Citrus fruit

115 000

600

0.5

1 320

11

0.8

Other fruit & berries

102 000

400

0.4

2 170

11

0.5

fruit

502 000

4 000

0.8

7 430

80

1.1

Vegetables







Potatoes

390 000

8 000

2.1

2 520

68

2.7

Carrots

89 000

2 500

2.8

1 090

37

3.4

Other vegetables

340 500

4 500

1.3

5 920

95

1.6

vegetables

819 500

15 000

1.8

9 530

200

2.1

fruit & vegetables

1 321 500

19 000

1.4

16 960

280

1.7

Sources: Swedish Board of Agriculture, Fox Research (based on trade sources).

2.3 Distribution channels

There are three main sectors for fresh fruit and vegetables in Sweden, the retail sector, the restaurant and catering sector, and the food industry sector.

2.3.1 Retail sector

The retail sector accounts for 80 percent of direct food consumption. Two main subdivisions can be identified, supermarkets and specialized food stores. A Swedish market characteristic is that organic products are predominantly sold through supermarkets. Most of the supermarkets, especially the larger ones, therefore have a relatively wide range of organic fruit and vegetables.

The specialized food store sector which comprises health food stores, fruit stores, market halls and street markets, which have a relatively minor share of the organic fruit and vegetables market. One reason is that while health food stores sell organic foods, they generally do not carry fresh produce.

In general, the Swedish food retailing sector is characterized by a relatively high degree of vertical integration between the wholesale and retail trade. Three large groups and one smaller hold about 74 percent of the sales within the retail level:

ICA Group

35 percent

KF Group

19 percent

Axfood

18 percent

Bergendahls

2 percent

ICA Group

The ICA Group, with its parent company ICA Ahold, part-owned by Ahold of Netherlands, is the largest retailer in Scandinavia with several subsidiaries in both Sweden, Norway, Denmark and the Baltic countries. Imports of fresh produce are handled by ICA Frukt & Grönt in Helsingborg (see Chapter 4.3, Main importers).

ICA has launched some 200 organic food products, of which half are marketed under ICA's own labels. The market share for organic products is still rather insignificant (below two percent). However, a goal is that in product areas where organic products are available, about ten percent of ICA sales should be organic.

KF Group

The KF Group, which consists of KF (the Swedish Consumer Cooperative Union) and 80 local retail consumer cooperatives, has about 2.4 million individual members and holds about 19 percent of sales within the food retailing trade. At the end of 2000, KF decided to merge its retailing activities with its sister organizations FDB in Denmark and NKL/Coop in Norway. The new company, named Coop Norden, is expected to start its activities in 2002.

The organic product range consists of 650 products, of which 300 products are marketed under KF's own brand for environmental products, Änglamark. During the last couple of years, sales of Änglamark products have risen by 30-50 percent per year. Even though these products are not priced at a higher level than equivalent conventional products, the policy is that they have to be as profitable as other brands. It should be noted that KF only imports ready-packaged goods - all fresh produce is imported by part-owned Saba Trading (see Chapter 4.3).

Axfood

Axfood is a newly formed joint venture between the wholesaling and retailing group Axel Johnson and independent retailers in Sweden and Finland. The new group, which started operations during 1999, comprises the wholesale company Dagab as well as 1 000 supermarkets and convenience stores. The Axfood chain with the largest assortment of organic products is Hemköp, which comprises 100 large supermarkets all over Sweden. The organic range consists of some 300 articles. About three to four percent of food sales are believed to be organic. The aim is to reach 10 percent within the next three to four years.

2.3.2 Restaurant and catering sector

The restaurant and catering sector accounts for 20 percent of the direct food consumption in Sweden. However, the availability of organic produce on the menus is still not so widespread. In the larger cities, there are a few restaurants specialized in organic and health food. There are also some municipal and regional institutions (such as canteens in schools and day-care centres) that have started to provide organic menus.

2.3.3 Food industry sector

There are about 300 domestic manufacturers certified by KRAV for producing organic food products. Organic fruit and vegetables, such as bananas, oranges, lemons, clementines, grapefruit, berries (either natural or chopped or minced), are used as raw materials in the production of for example frozen foods, juices, fruit preserves, baby food, etc.

The food processors either buy needed raw materials or ingredients directly themselves or through the specialized importers. However, imports of fresh fruit and vegetables needed in the production of organic products are as a rule carried out through one of the specialized fruit and vegetable wholesalers.

It should be noted, that for logistic, food safety and environmental reasons, Swedish manufacturers generally prefer raw materials from either domestic growers or suppliers in nearby countries.

2.4 Market access

Since 1995, Sweden is a full member of the EC. This means that there are no trade barriers between the EC and Sweden.

In order to be imported as organic products into Sweden or to be traded as such, organic products have to be certified by a control organization.

In line with the EC Regulation, the Swedish parliament has legislated official inspectors for organic products. The two organic organizations in Sweden, KRAV (The Swedish Organic Agriculture Association) and The Swedish Demeter Association, have both been named as official inspection bodies.

KRAV, which is owned by parties involved in the production and distribution of organic products -i.e. growers, food manufacturers, importers, wholesalers and retailers - is the only organic label recognized by the main supermarket chains. If other labels are used, they must be recognized by KRAV or at least comply with the EC Regulation.

However, a few importers also sell products that are certified by other control organizations recognized by IFOAM, such as SKAL, FVO, Ecocert, and EKO-BCS.

KRAV also approves foreign companies that produce or package according to their rules. Approval of foreign production is based on the condition that the production is in accordance with KRAV standards

All imported ready-packed food items have to have labels that clearly state the country of origin. Sales of unpacked products require the following on the invoices and delivery notes:

country of origin
name of control organization
approval by KRAV
Wrapping and packaging materials may not contain preservatives, fungicides or other chemical agents. All wrapping and packaging materials should be environmentally friendly.

The KRAV logo certifies that production is done according to organic standards, e.g. without any chemical pesticides or fertilisers, that animals are well taken care of and have free outdoor access, and that the entire production is free from GMOs. To guarantee this, the KRAV inspectors carry out regular inspection visits on location at the farms, shops, processors, restaurants, etc.

2.5 Constraints to market development

There are three factors that could be regarded as main constraints to a further positive development of the organic fruit and vegetables market, limited supplies, high price differentials to conventional items and weak consumer knowledge about organic products and production methods.

2.5.1 Supplies

Among the leading retailers, limited and irregular supply is seen as the main constraint for further expansion of the fruit and vegetables market. In order to increase the market, not only are more suppliers needed, but also of suppliers that can provide their product during more than one season.

In order to increase market shares, sales promotion and other marketing efforts are also essential. However, active marketing of a particular organic product can not be undertaken until the parties involved can be absolutely sure that one has dealt with the above-mentioned problems with availability and reliable supplies.

The irregular availability of organic produce was also evident in a price study undertaken in January 2001 in selected supermarkets in Stockholm and Uppsala. At the time of the observations, several of the most popular organic items were not available, e.g. tomatoes, cucumber, lettuce, avocado and grapes (see Table 7).

2.5.2 Price premiums

Almost all organic produce receive a premium price. For some agricultural Swedish-grown products, the producer prices are linked to conventional prices, with a premium fixed either in Swedish crowns or as a percentage. For other products, including domestic fruit and vegetables, however, prices fluctuate widely.

Within the wholesale and retail levels it is customary to use percentage mark-ups for fruit and vegetables. However, in order to minimize the price differential between organic and conventional items, a few of the leading retailers have decided to use the same mark-up value for organic items as they do for corresponding conventional items.

Nevertheless, according to a recent study conducted by the National Board for Consumer Policies, organic products are on average 30-35 percent more expensive than conventional items. Observations in selected supermarkets in Stockholm and Uppsala in January 2001 also indicate that the range of price premiums over conventional products is very wide, from 0 to 300 percent (see Table 7).

2.5.3 Consumer attitudes

Consumer research shows that consumers look for products that have a good taste, are wholesome, easily available and convenient, and that are offered at a good price. The environment also ranks high in the average Swedish consumers’ minds. According to several market studies, two out of three Swedes buy environmentally friendly products, of which about 40 percent do it from time to time and 10-15 percent on a more regular basis.

However, the actual knowledge about organic products and the way organics are produced and controlled, does not seem to be widespread. A recent study also showed that even if the majority of consumers believed that organic products were good for the environment, a much larger majority (more than 90 percent) maintained that organic products were expensive. This means that even if the price differential between organic and conventional items is reduced, there is still a lack of awareness in many consumers’ minds about the benefits of organic products, which limits the potential for further development of the organic fruit and vegetables market.

Table 7: Swedish retail prices of selected organic and conventional fruits and vegetables

Prices based on observations in selected supermarkets in Stockholm and Uppsala in January 2001

Organic item

Conventional item

Price differential (%)

Product

SKr per kg

SKr per kg

Fruits




Bananas

22.90-24.90

17.90-18.90

21-39

Oranges

16.90

12.90-14.90

13-31

Blood oranges

16.90

16.90-19.90

0-14

Grapes*

39.90-45.00

-


Kiwi

17.90

9.90-14.90

20-81

Apples

20.00-34.90

9.90-15.90

26-252

Pears**

48.00

11.90-20.90

130-303

Avocado

*

5.90-7.90/piece

-

Vegetables




Potatoes

10.95

5.90-6.00

54-55

Tomatoes

*

25.00-32.90

-

Cucumber

*

23.70-27.00

-

Iceberg lettuce

*

24.90-25.90

-

Onions

13.90

4.90-5.90

136-184

Carrots

14.90

7.50-8.50

64-99

Cabbage

7.90

5.90

34

Parsnip***

19.90

19.90

0

* Not available as organic at the time of observations

** Sold in units of three pieces

*** Only available as organic in one of the observed stores

Source: Fox Research.

3. Imports of organic fruit and vegetables

Imports account for a substantial share of the fruit and vegetable supplies. The main part consists of items which is not at all produced in Sweden - such as citrus and tropical fruits - and of products which are only produced part of the year, such as most vegetables, deciduous fruits and berries. Imports of these products depend on how much local produce is available or when importing is more favourable.

Exports of organic fruit and vegetables are insignificant, since local supplies are still inadequate to meet the domestic demand. The only export items at present are carrots and cabbage, but only when there are temporary extra supplies.

3.1 Imports of fruit and berries

Imports account for about 95 percent of the fresh fruit supplies, and about the same share applies for organic fruit. By volume, imports of organic fruit and berries amounted to approximately 3 800-3 850 tonnes in 2000, of which the most important items were bananas (2 000 tonnes), citrus fruit (600 tonnes), apples and pears (850-900 tonnes), and other items (350 tonnes) - see also Table 8.

The largest single import item is bananas, which account for almost half of organic fruit imports. During 2000, about 2 000 tonnes were imported, corresponding to 1.3 percent of banana imports. The main supplier is the Dominican Republic, but smaller volumes are also exported from Colombia, and as of 2001, Ecuador.

Imports of organic citrus fruits are still relatively insignificant, well below one percent of citrus fruit imports. The present product range consists of oranges, clementines, satsumas, mandarins, tangerines, grapefruit and lemons. The main supplier is Italy, with supplement shipments from Spain and Israel.

Apples and pears are imported throughout the year, even though there is some competition with domestic production during the domestic high season, i.e. between August and January. Main foreign suppliers are Italy and France, but during off-season, there are also shipments from Argentina and Chile.

Sweden is also a relatively large importer of kiwi fruit, all of which comes from Italy or New Zealand. Other organic fruits imported into Sweden are peaches and nectarines (Italy), plums (Chile), grapes (Italy, South Africa), mango (Mexico, Dominican Republic, Guinea), pineapple (Brazil), and strawberries (Israel). The following items are also imported, but in limited quantities: papaya, melons, kumquats, limes, cherimoyas, custard apples, guavas, lychees, passion fruit, grenadilla, dates, figs, and cherries.

3.2 Imports of vegetables

Imports account for about 60 percent of the market supply for fresh vegetables. The same share also applies for organic vegetables, but only when potatoes are excluded. When potatoes are included, the import share is down to about 35 percent.

During 2000, imports of organic vegetables amounted to between 5 000 to 5 200 tonnes, of which potatoes accounted for approximately 900-1 000 tonnes (see Table 8).

Table 8: Imports of organic fresh fruit and vegetables - 2000

Approximate figures based on trade estimations for the year 2000

Products

supply (tonnes)

Import (tonnes)

Share (%)

Fruit & berries




Bananas

2 000

2 000

100

Apples & pears

1 000

850-900

85-90

Citrus fruit

600

600

100

Other fruit & berries

400

350

87-88

Sub-

4 000

3 800-3 850

95-96

Vegetables




Potatoes

8 000

900-1 000

11-12

Other vegetables

7 000

4 100-4 200

58-60

Sub-

15 000

5 000-5 200

33-35


19 000

8 800-9 050

46-48

Source: Fox Research (based on trade sources).

The most popular organic vegetables in Sweden are potatoes and carrots, which are supplied almost entirely by domestic growers. The only real potential for exporters is probably during April and June, just before the domestic harvest begins.

For other domestically grown vegetables, such as onions, beetroot, cabbage, swede, peas, turnips, leeks, and horse-radish, imports largely depend on how much local produce is available. The domestic growing season generally starts in June and ends in August or September. During this period it is very hard for foreign suppliers to compete with domestic growers, with the result that imports rarely start until several months after the growing season has ended, i.e. in late autumn or in early winter.

Tomatoes are currently the largest import item. Due to climatic conditions, organic tomatoes are difficult to grow economically in Sweden, and are therefore imported all year. The main supplier is the Netherlands, but when Dutch tomatoes are not in season, imports are from the Canary Islands, which calls for air freight. Consignments of tomatoes from the Canaries are flown in practically every day between Christmas and Easter. However, during summer and autumn, there is also competition with domestically grown greenhouse tomatoes.

Other products imported are cucumber, lettuce, and paprika, as well as cabbage lettuce, aubergines, mushrooms, avocado, chilli peppers, garlic, ginger, fennel, pimentos, zucchini and pumpkins.

Organic vegetables are mainly imported from other EC countries, of which the Netherlands, Italy, France, and Spain are the most important ones. Suppliers from outside the EC include Israel (onions, avocado), Argentina (onions, garlic), Mexico (avocado), the Dominican Republic (ginger), and China (pumpkins).

3.3 Main importers of fruit and vegetables

Most imports of fresh organic produce into Sweden are carried out through the specialized fruit and vegetable wholesalers, since retailers, caterers and food manufacturers rarely import fresh produce themselves.

There are about 200 fruit and vegetable wholesalers in Sweden, and nearly all of them also function as importers. Most of the wholesalers are located in one of the following four locations:

Helsingborg and Malmö (in the southern part of the country)
Göteborg (west coast)
Stockholm (east coast)
However, two companies, Saba Trading and ICA Frukt & Grönt, both with import headquarters in Helsingborg, have a dominant share with about 75-80 percent of the fruit and vegetable market. Furthermore, both are directly connected to three of the four largest retailing groups in Sweden.

There are at present twelve wholesalers that are authorized by KRAV to import fresh organic fruit and vegetables into Sweden, of which five offer both conventional and organic items, while the other seven deal solely with organic items.

Even if there are no exact figures available, it is clear that three wholesalers dominate imports of organic produce into Sweden: Saba Trading, ICA Frukt & Grönt and Biodynamiska Produkter (BP) - see also Table 9.

Saba Trading

Saba Trading is Scandinavia’s leading importer of fruit and vegetables and holds about 50 percent of the Swedish market for fresh fruit, vegetables and flowers. The company is owned by the United States fruit and vegetables group Dole Food Company (60 percent), and the two domestic retail groups Axfood/Axel Johnson (25 percent) and KF (15 percent). Sales amount to about SKr4 500 million yearly.

Imports are handled by Saba Frukt & Grönt, a subsidiary based in Helsingborg. However, bananas are imported through Banan-Kompaniet, based in Stockholm. Another subsidiary is FTK in the Netherlands, one of Europe's leading importers of tropical fruits. A relatively large part of Saba’s European import is channelled through FTK’s terminal in Rotterdam.

Saba Trading has a wide range of organic fruit and vegetables, well over 100 articles. Organics are estimated to account for about 1-1.5 percent of fruit and vegetable sales. Main customers are food stores within Axfood and the KF Group, as well as independent food stores. The catering sector is another important customer group.

ICA Frukt & Grönt

ICA Frukt & Grönt, part of the ICA Ahold Group, is the second largest importer and wholesaler of fresh fruit and vegetables in Sweden. Sales amount to about SKr2 500 million. The market share is about 30 percent.

The main customers are food stores belonging to different ICA chains, as well as independent caterers.

Organic items account for about one percent of the volume. The range includes about 80 articles, of which the most important ones are bananas, oranges, apples, pears, potatoes, carrots, tomatoes and broccoli.

Direkt Frukt & Grönt and Ewerman/Frukt & Grönsaksspecialisten

The three medium-sized wholesalers of fruit and vegetables, Direkt Frukt & Grönt, and Ewerman/Frukt & Grönsaksspecialisten (both are part of the STC Group), that have been authorized by KRAV to import organic items, but volumes are still insignificant (well below one percent share of their respective sales).

Biodynamiska Produkter (BP)

BP with headquarters in Järna outside Stockholm, markets about 90 organic fruit and vegetable articles, of which more than half the volume is imported. With a turnover of SKr100 million, BP ranks as one of the three largest importers of organic produce in Sweden (in organic bananas, it ranks as number two).

In addition to fresh produce, also packaged foods are imported. The range consists of more than 1 000 different organic products.

BP imports both from other EC countries and from other countries in Europe, Asia, Africa and Latin America. Besides supplying other wholesalers (including Saba and ICA), BP sells directly to supermarket chains and health food stores, as well as to the catering sector and the food manufacturing sector.

Samodlarna Sweden

Samodlarna Sweden is a buying and marketing cooperative for about 350 domestic farmers and gardens, but also handles import of some products. The main customers are fruit and vegetable wholesalers and the domestic food processing sector.

Others

The smaller wholesalers of organic fruit and vegetables are either concentrated on a few specific items or product groups (Mariannes Farm, Natura, Raggårdens Produkter and Råby Biogrönt), or a regional geographical area (Alt-Grönt).

There are also a few KRAV-certified fruit and vegetable distributors in other European countries that regularly export organic items to Sweden, of which the most important one is Eosta International BV in the Netherlands. Eosta’s customers in Sweden include Saba Trading, ICA Frukt & Grönt, Biodynamiska Produkter and Direkt Frukt & Grönt, as well smaller wholesalers.

3.4 Import trends and constraints to import growth

As has been pointed out earlier, the market for organic produce has shown a steady increase during the past few years, about 20-30 percent annually. But since domestic producers have not been able to meet the growing demand for either organic fruit or vegetables, imports have grown even more, well over 30 percent per year. A further 30 percent increase is expected for 2001.

Table 9: Facts about KRAV-certified fruit and vegetable wholesalers

Approx. figures based on trade estimations. The market share applies to the fruit and vegetables wholesale market.

Company

sales(SKr million)1

market share (%)2

Organic share of sales (%)3

Import share of sales (%)4

General fruit & vegetable wholesalers





Saba Trading (Dole)

4 500

50

1.5

70

ICA Frukt & Grönt (ICA Ahold)

2 500

30

1

70

Direkt Frukt & Grönt

-

4-5

-

-

Specialized organic wholesalers





Samodlarna Svea

40

-

95-100

1

Biodynamiska Produkter (BP)

25

-

95-100

40

Raggårdens Produkter

11

-

95-100

-

Alt-Grönt

4

-

95-100

50

Råby Biogrönt

2

-

95-100

-

Natura

-

30

95-100

30

1 The company’s sales of fruit and vegetables, when available

2 The company’s share of the fruit and vegetables wholesale market

3 Organic items share of the company’s fruit and vegetables wholesale sales

4 The import share of the company’s fruit and vegetables wholesale sales

Source: The Market for Organic Products/SLU, KRAV, Fox Research.

Since the Swedish market for organic fruit and vegetables to a relatively large extent already is supplied by imports, especially regarding fruits, the only real constraints to a further increase of imports would be a substantial increase in domestic production combined with a slowdown in the market development. Neither of these factors are likely to happen in the near future.

However, as the market for organic fruit expands, it is probable that there will be an increase in the domestic growing of apples and pears as well as strawberries, which is likely to have a negative effect on imports of these items, at least during the domestic growing season.

4. Conclusions and market opportunities for developing countries

The organic food market in Sweden has seen a tremendous growth during the last couple of years. The development has been enhanced by the large supermarket chains, which have introduced a wide range of organic foodstuffs in their assortment, of which quite a few fall under their own brands.

The market for organic fresh fruit and vegetables is estimated to have grown about 20-25 percent annually in recent years. The positive trend is expected to continue also in the near future. In fact, sources within the fruit and vegetable trade foresee a 30 percent increase for 2001.

Despite the very positive market development, it must be pointed out that the market penetration is still relatively low. In 2000, organic vegetables had an estimated market share of just 1.8 percent by volume and 2.1 percent by value. For fruit and berries, the corresponding market shares were even lower, 0.8 percent and 1.1 percent, respectively. By volume, the market for organic vegetables amounted to 15 000 tonnes and organic fruit and berries to 4 000 tonnes. By market value, the corresponding figures were SKr200 million and SKr80 million.

The low market shares has several origins, of which three can be seen as the most important ones. First of all is the high price difference to conventional items (in general 30-35 percent), which consumers generally cite as the main factor for not choosing organics. Since at least 10-15 percent of the consumers regularly buy environmentally friendly products, there is a strong potential for a much higher market share for organic fruit and vegetables, if the price difference could be somewhat reduced, at least to 15-20 percent.

Another market constraint is inadequate and infrequent supplies. The retail trade prefer products that can be marketed throughout the whole year. This means that in order to increase the market, not only are more suppliers needed, but also of suppliers that can provide their product during more than one season.

A third hampering factor is that even if environmental concern ranks high in most consumers mind, the actual knowledge about the difference between organic and conventional agriculture is not widespread. More information and promotional activities towards consumers should therefore be undertaken, in order to strengthen the development of the organic market.

However, the foundation for a further strong development of the organic market in Sweden is already at hand. Organic farming is an important factor in the Swedish agricultural policy and this is also emphasized by the new national target, which stipulates that 20 percent of the country’s arable land should be organic farm lands by 2005. If the goal is reached, it would put Sweden in a top position in organic agriculture in Europe.

Nevertheless, only a small share of the organic farmlands is currently under certified fruit and vegetable production, just 2 300 ha, which explains why domestic production only accounts for barely half the market supply for organic fruit and vegetables.

Imports account for almost all supplies of organic fruits. The main part consists of items which are not produced in Sweden - such as citrus and tropical fruits - and of products which are only produced part of the year - such as deciduous fruits and berries.

The leading import items in organic fruit are bananas, citrus fruit, apples and pears. Bananas are by far the most popular organic fruit. Even so, organic bananas have just 1.3 percent of the market for bananas. Considering that Sweden has one of the highest consumption of bananas in the world (outside banana-producing countries), around 20 kg per person, there is a potential for a much larger export volume to Sweden.

The organic market for both citrus fruit and apples and pears is still underdeveloped, which means there should be a potential for much higher import volumes. Since importers generally prefer to buy from sources as near as possible, the best opportunities for suppliers in developing countries are probably during the European off-season. This also applies for other items produced in Europe, such as stone fruit, melons and berries.

Tropical fruit has seen a very positive market trend in recent years, which means that there exist excellent export opportunities for suppliers in developing countries for a number of items, such as mango, papaya, pineapples, cherimoyas, custard apples, guavas, lychees and passion fruit.

Imports account for about 50 percent of the supply of organic vegetables. However this figure excludes potatoes, which account for over half the organic vegetable market. If potatoes are included, the import share is substantially lower, about 35 percent.

Imports of organic vegetables are oriented towards products that are not produced or not available in sufficient quantity in Sweden. Potatoes and carrots are almost entirely supplied by domestic producers. Furthermore, during the Swedish growing season, it is generally hard for foreign suppliers to compete with domestic producers of vegetables such as onions, beetroot, cabbage, swede, peas, turnips, horse-radish, leeks, and squash. On the other hand, other vegetable products, such as tomatoes, cucumber, iceberg lettuce, cabbage lettuce, cauliflower, mushrooms, paprika, aubergines, and fennel are imported all year round.

Even if the main part of vegetable imports come from other EC countries (with the Netherlands and Italy as the main suppliers), there are good prospects for non-European suppliers of a number of organic vegetables, such as onions, chilli peppers, avocado, garlic, ginger, okra, pumpkins, and sweet potatoes.

Given the rapid development of the organic market, the current insufficient supply, and the large import share, producers in developing countries of fruit and vegetables, especially tropical fruit and off-season vegetables, should have good opportunities to export organic items to the Swedish market.

Annex I
List of major importers of organic fruit and vegetables

Selected list of KRAV-certified importers of fresh fruit and vegetables. A current list of all KRAV-certified importers as well as other information about imports can be obtained from KRAV, see address in Annex II.

Importers of fresh fruit and vegetables

AltGrönt AB
Products: Fruit and vegetables
Contact: Mr Bernt Klingberg
Tel: +46 8 511 700 60
Fax: +46 8 511 763 64
Address:Vargmötesvägen 14, S-
186 30 VALLENTUNA
altgront@altgront.se
www.altgront.se (under construction)

Biodynamiska Produkter
Products: Fruit and vegetables;
packaged foods
Contact: Mr Tobias Zeiher
Tel: +46 8 554 810 30
Fax: +46 8 554 810 39
Address:PO Box 42, S-153 21
JÄRNA

tobias.zeiher@biodynamiskaprodukter.nu

Direkt Frukt och Grönt AB
Products: Fruit and vegetables
Contact: Mr Torbjörn Karlsson
Tel: +46 40 18 09 00
Fax: +46 40 18 09 01
Address:Flintrännegatan 21, S-
211 24 MALMÖ
torbjorn.karlsson@direktlivs.se
www.direktlivs.se

ICA Frukt & Grönt
- part of ICA Ahold AB -
Products: Fruit and vegetables
Contact: Mr Björn Hacklou
Tel: +46 42 18 90 00
Fax: +46 42 18 92 88
Address:PO Box 713, S-251 07
HELSINGBORG
bjorn.hacklou@ica.se;
info@ica.se
www.ica.se

Marianne's Farm AB
Products: Carrots
Contact: Ms Marianne Härning-
Nilsson
Tel: +46 42 20 71 33
Fax: +46 42 20 70 49
Address:Dalsgård 2393, S-262 92
ÄNGELHOLM
info@mariannesfarm.se
ww.mariannesfarm.se

Natura AB
Products: Fruit and vegetables
Contact: Mr Bengt Carlsson
Tel: +46 415 622 50
Fax: +46 415 620 35
Address:Almarkaröd, S-242 92
HÖRBY
info@natura.se
www.natura.se

Raggårdens Produkter AB
Products: Potatoes, roots, other
fresh vegetables; Preserved
vegetables
Contact: Mr Owe Johansson
Tel: +46 512 134 90
Fax: +46 512 130 77
Address:Arentorp, S-534 94
VARA
rpab.liselotte@delta.telenordia.se
www.raggardensprodukter.se

Råby Biogrönt AB
Products: Fruit and vegetables
Contact: Mr Tommy Nordgren
Tel: +46 415 31 11 56
Fax: +46 415 31 11 56
Address:Råby 4, PL 250, S-242
92 HÖRBY

Saba Trading AB
- part of Dole -
Headquarters, Stockholm
Tel: +46 8 602 60 00
Fax: +46 8 602 60 99
Address:PO Box 9101, S-120 05
ÅRSTA
info@saba.se
www.saba.se

Importing subsidiaries:

Saba Frukt &Grönt AB
Products: Fruit and vegetables;
Flowers
Contact: Ms Linnea Jönsson
Tel: +46 42 24 96 69, +46 42 24
95 00
Fax: +46 42 29 71 31
Address:PO Box 15 073, S-250
15 HELSINGBORG
innea.jonsson@saba.se;
info@saba.se
www.saba.se

BananKompaniet AB
Products: Bananas
Contact: Mr Anders Cottrell
Tel: +46 8 667 91 60
Fax: +46 8 661 36 07
Address:PO Box 27294, S-102
53 STOCKHOLM
anders.cotrell@saba.se,
info@saba.se
www.banan-kompaniet.se;
www.saba.se

Samodlarna Sweden
Products: Fruit and vegetables;
Dried vegetables; Cereals;
Packaged foods
Contact: Mr Jan Knutar
Tel: +46 8 602 23 38
Fax: +46 8 91 81 20
Address:Grosshandlarvägen 3
S-120 44 ÅRSTA
jan.knutar@swegro.se
www.swegro.se

STC Scandinavian Trading Company

Importing subsidiaries

Ewerman AB
Products: Fruit and vegetables
Contact: Mr Björn Jansson
Tel: +46 42 490 11 00
Fax: +46 42 490 11 80
Address:Knut Påls väg 9, S-256
69 HELSINGBORG
ew@ewerman.se
www.ewerman.se

Frukt & Grönsaksspecialisten
Products: Fruit and vegetables
Contact:Mr Nils Barnholdt
Tel: +46 42 20 11 60
Fax: +46 42 15 37 27
Address:Knut Påls väg 8, S-256
69 HELSINGBORG
info@fgs.se
www.fgs.se

Retail Groups

Axfood AB
Retailer and wholesaler in
Sweden and Finland.
Imports of fresh produce, see
Saba Trading.
Tel: +46 8 553 998 00
Fax: +46 8 82 58 59
Address:PO Box 7314, S-103 90
STOCKHOLM
info@axfood.se
www.axfood.se

ICA Ahold AB
Retailer and wholesaler in
Sweden, Norway, Denmark and
the Baltic countries.
Imports of fresh produce, see ICA
Frukt & Grönt.
Tel: +46 8 585 500 00
Fax: +46 8 585 500 09
Address:S-171 93 SOLNA
info@ica.se
www.ica.se

KF
Retailer and wholesaler in
Sweden.
Imports of fresh produce, see
Saba Trading.
Tel: +46 8 743 10 00
Fax: +46 8 743 15 75
Address:PO Box 15200, S-104
65 STOCKHOLM
info@kf.se
www.kf.se

BergendahlsGruppen AB
Retailer and wholesaler in
Sweden
Imports fresh produce, see Saba
Trading
Tel: +46 451 480 00
Fax: +46 451 482 22
Address:PO Box 22, S-281 21
Häassleholm
info@bergendahls.se
www.bergendahls.se

Annex II
List of organizations and national authorities in the organic sector

KRAV
- Swedish Organic
Agriculture Association
Certification organization for
organic production, processing,
importing, distribution and
marketing.
Activities include standards
development, inspection,
certification, and information.
Tel: +46 18 10 02 90
Fax: +46 18 10 03 66
Address:PO Box 1940, S-751
49 Uppsala
info@krav.se
www.krav.se

GroLink
Consultancy and assistance of
certification programmes,
projects and training world-
wide.
Contact: Mr Gunnar Rundgren
Tel: +46 563 723 45
Fax: +46 563 720 66
Address:Torfolk, S-684 95
Höje
gunnar@grolink.se
www.grolink.se

National Food
Administration
Tel: +46 18 175500
Fax: +46 18 105848
Address:PO Box 622, S-751 26
Uppsala
info@slv.se
www.slv.se

Swedish Demeter Association
Certification organization for
bio-dynamic production.
Tel: +46 8 551 579 88
Fax: +46 8 551 579 76
Address:Skillebyholm, S-153
91 Järna
www.demeter.nu

Föreningen för Rättvisemärkt - Swedish Member of Fair Trade Labelling
Organization International (FLO)
National organization for fair
trade labelled items (products
marketed in Sweden are usually
also KRAV-certified).
Tel: +46 8 668 03 50
Fax: +46 8 668 03 14
Address:Drakenbergsgatan 11,
S-117 41 Stockholm
handla@raettvist.se
www.raettvist.se

Swedish Federation of Trade
and Service
Tel: +46 8 7627700
Fax: +46 8 7627777
Address:S-103 23 Stockholm
info@sht.se
www.svenskhandel.se

Swedish University of Agricultural Sciences (SLU)
A main actor of research,
courses and training within the
Swedish organic agricultural
sector.
Tel: +46 18 67 10 00
Fax: +46 18 67 20 00
Address:PO Box 7070, S-750
07 Uppsala
registrator@slu.se
www.slu.se

Swedish Board of Agriculture
Tel: +46 36 15 50 00
Fax: +46 36 19 05 46
Address:S-551 82 Jönköping
info@sjv.se
www.sjv.se

Annex III

Currency Conversion

Average exchange rate of the Swedish currency SKr

Average rate in SKr

Currency

1990

1995

1997

1998

1999

2000

2001*

1 US Dollar

5.91

7.13

7.64

7.95

8.27

9.17

9.60

1 Euro

-

8.65

8.62

8.93

8.61

8.45

8.93

* Average rate January-February 2001
Source: Sveriges Riksbank


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