The organic market in France is characterized by varied dynamics across distribution channels, namely large-scale retailers (GMS), organic specialty stores (MSB), and alternative local grocery stores (EAP). Each of these networks influences the organic sector differently, creating a contrasting landscape.
Large-scale distribution (GMS): a major player in decline
Large-scale retailers, the main players in organic product sales, continue to reduce their offerings while maintaining their margins. This strategy, focused on profitability rather than sales volume, has direct repercussions on the entire organic sector. Indeed, this contraction affects producers and processors who rely heavily on this distribution channel. This situation is reminiscent of the crises of 2002 and 2012, when similar adjustments destabilized the sector.
Continuing this policy in 2024 is expected to lead to negative earnings for supermarkets, marking a difficult year for organic products in this channel. Long-term consequences could include a loss of market share to more dynamic and innovative channels.
Organic Specialty Stores (MSB): an encouraging recovery
On the other hand, organic specialty stores are showing signs of recovery, compared to a declining first half of 2023. The second half of 2024 will be crucial to confirm this positive trend. MSB growth is mainly due to an improved offering in terms of quality/price ratio and the introduction of affordable manufactured products.
Since the second quarter of 2023, the fruit and vegetable section has held up well, and even grown, thanks to a favorable perception of healthy products and price. Moreover, since the fourth quarter of 2023, there has been a growing demand for new, innovative products, which is supporting the development and rejuvenation of the MSB assortment. This dynamic should enable growth of 3 to 5% in 2024, bringing turnover to nearly €4 billion, a goal long hoped for by organic players.
Alternative Local Grocery Stores (EAP): a growing role
Despite their diversity in terms of sales area (from 20 to 200 m²) and average turnover (€295,800), EAPs play a role in the distribution of organic products. Outside of this channel's main brand, which offers a more limited organic range, organic products represent 85 to 90% of food. For 2024, the EAP market is estimated at €249 million.
These grocery stores help shape a friendly, eco-friendly, and affordable image of organic products, particularly thanks to their bulk offerings. Their diversity and local roots make them an important vehicle for the democratization of organic products.
Conclusion
The organic market in 2024 will be marked by a declining dominance of supermarkets, a consolidation of small and medium-sized businesses, and an affirmation of the commitment of small and medium-sized businesses to the distribution of organic products. While large-scale retailers could lose market share, organic specialty stores and local alternative grocery stores will continue to strengthen their positions thanks to quality offerings and competitive prices. This diversification of distribution channels promotes the resilience and sustainable growth of the organic sector in France.