Organic food edges towards mainstream in France

PARIS (Reuters) - Organic food sales in France are set to rise by 20 percent in 2016, the fastest pace in seven years, as farmers and retailers expand in the segment, an organic food group said on Wednesday.

France, the European Union’s largest agricultural producer, had been relatively slow to take to organic food in the past decade compared to EU neighbors like Germany, but last year the market showed signs of becoming more mainstream.

Sector sales rose 20 percent in the first half of this year and are on course to maintain that level over the full year to reach 6.9 billion euros ($7.7 billion), Agence Bio said.

This compares with sales growth of less than 1 percent for supermarket grocery products in the first half of the year, according to data from market research firm Nielsen.

“The take-off of the organic sector is being confirmed in 2016,” Didier Perreol, president of Agence Bio, told reporters.

Organic sales were being supported by a fast growing supply chain, according to the agency, a public-private body that supports the sector’s development.

Organic farmland expanded to 1.57 million hectares, or 5.8 percent of total farmland in France, in the first half, against 1.4 million at the end of last year, reflected in a 10 percent rise in the number of organic farms.

Burgeoning production was keeping pace with demand, with the share of domestic supplies in French organic sales expected to remain stable at about three-quarters this year, Agence Bio said, attributing part of imports to tropical goods.

Some 200 new specialist organic stores opened in the first half, supporting a 25 percent rise in sales in specialist outlets, it said.

Supermarkets have also reported double-digit growth in organic sales, with Agence Bio estimating a first-half rise of 18 percent.

Carrefour, Europe’s biggest retailer, is developing standalone organic food stores in Paris, as well as selling organic brands in its supermarkets, and this year acquired e-commerce organic supplier Greenweez. The group said its French organic sales growth continued at double-digit levels in the first half after rising 11 percent in 2015.

However, a poor cereal harvest this year, when yields at organic farms dropped by 40-50 percent, would reduce supplies of popular organic items like bread, Agence Bio said.