The cooperation between Bioland and Lidl is stirring up the industry. Are low-cost suppliers just free riders who want to profit from the organic boom?
This is what an organic chicken looks like. And now the industry is discussing who should sell its eggs Photo: dpa
In the competition for organic customers, Lidl is creating facts these days: Since the beginning of January, the discounter has been filling its refrigerated shelves with ecologically high-quality dairy products. Cheese, milk and curd cheese under its own brand "Bio Organic" are now mostly from the Bioland growers’ association, as are flour and potatoes. Lidl customers have been able to buy products such as apples and herbs in Bioland quality since November.
Up to now, the discounter’s slogan "Lidl lohnt sich" ("Lidl is worth it") has mainly been used to advertise its low prices. Now, shopping should also be worthwhile for people with an ecological conscience. This is because the guidelines of Germany’s largest organic farming association go far beyond those for the EU seal, which has determined the range of products offered by discounters up to now. For example, Bioland producers must farm exclusively organically on the entire farm and produce at least half of the feed on their own farm.
"Organic has long been a strategic issue for us," says Lidl purchasing manager Jan Bock at the Green Week in Berlin. No wonder, since profits in the organic sector have been growing for years. In 2017, sales of organic products in Germany exceeded 10 billion euros for the first time, according to the Federation of the Organic Food Industry (BoLW). 59 percent of this was attributable to the retail sector – a growth of more than 8 percent.
Aldi, Penny and other discounters are also positioning themselves to attract customers with organic products. All of them now carry organic products in their assortments. The Kaufland chain, like Lidl, is part of the Schwarz Group and said Friday that it will offer Demeter goods starting in February.
Specialty stores lose exclusivity
Until now, organic and Demeter products were reserved for customers of specialty stores – through the cooperation with Lidl and Kaufland, these lose further exclusivity. In 2017, 29 percent of organic sales were still attributable to specialist retailers. Elke Roder, managing director of the Bundesverband Naturkost Naturwaren (BNN), placates: "We also grew last year – it’s not the end of the road for us yet." Nevertheless, she is watching the development closely.
Like Roder, parts of the organic sector and consumers have reservations about discounters like Lidl. Many fear that Bioland’s high standards could be watered down. Lidl’s purchasing manager Bock counters this: "We ourselves have an interest in Bioland maintaining its standards. Otherwise, we could have just stuck with the EU label."
Jan Plagge, president of the organic farming association Bioland.
"This is not about good or bad. We have to convince consumers of the organic way."
There is also to be a change of course in marketing. "Lidl has committed itself to not marketing Bioland products by lowering prices and offering discounts," says Bock. This is definitely a first for the discounter, he says, because low prices are actually in its DNA.
Nevertheless, Roder from BNN is disappointed with Bioland. The specialized trade was surprised by the cooperation with Lidl and considers it a mistake, he says. "For us, the discounters are free riders," Roder says. "But specialty retailers have strengths they can’t copy." Specialty stores, he says, act ethically, sustainably and responsibly – and holistically. "Here, all food really is organic."
Gaps in organic assortment
Discounters do not offer such a concept. There are still gaps in Lidl’s organic range, too: many products are only available in the conventionally produced variety. It is no coincidence that Lidl is initially converting its organic dairy products to organic quality. According to Markus Fadl, spokesman for Naturland’s organic farming association, the transition is comparatively easy for mono-products like milk, according to strict organic standards. "For more complex products and international origins, such as coffee, it’s a longer process," Fadl says.
The Naturland growers’ association is also one of the largest in Germany and has been cooperating with retailers such as Rewe for about ten years. There, the association says it provides half of the organic products. "At that time, too, there were discussions and demands that the growers’ associations remain loyal to the specialist retailers," says Fadl. However, Naturland rules out cooperation with discounters: "We are very satisfied with our current partners."
Lidl and Bioland, on the other hand, are planning to expand their cooperation. Applesauce and apple juice are to follow soon in the assortment, and meat at some point.
Bioland President Jan Plagge is also aware of the fears of the specialist trade. However, the aim is not to snatch customers away from the specialist trade, but to expand organic farming as a whole. "This is not about good or bad," says Plagge. "We have to convince consumers of the organic way."
With Lidl’s 3,200 stores, he says, there is now a major buyer – the prerequisite for more farmers to switch to organic production. In 2018, the number of Bioland farms grew by 6 percent to 7,768. More partners are needed for the cooperation with Lidl – the association is currently unable to predict how many. The willingness is there among many farmers, according to Plagge.