Dhe inflation continues to rise, money is tight. Many consumers have to pay close attention to prices when buying their groceries. According to a survey by the German Retail Association in spring 2022, 30 percent of those surveyed said they were buying fewer organic products. Accordingly, 21 percent of customers currently put fewer regional products in their shopping cart. Small and owner-managed organic markets and bulk shops are particularly hard hit by the subdued buying mood. The money is not loose.
Kurt Lorenz and Mario Blandamura notice this in particular. “We’re seeing a significant drop in sales compared to the first few years of the pandemic,” says Blandamura. The brothers founded their company back in 1995, five years before the European Union introduced its organic label. In 1998 the company got its present name: Little Paradise. After 19 years of successful growth, they moved from Geiselbach near Aschaffenburg to their current location in Linsengericht in 2014 and now employ more than 100 people.
Record sales at the start of the pandemic
They run both an organic shop and a delivery service that supplies customers with fruit and vegetables from the region on a weekly basis. Until the beginning of 2022, the story of the little paradise was one of constant growth, analogous to the entire industry. But the Ukraine war and inflation are making things difficult for the entrepreneurs.
The delivery service accounts for 70 percent of sales, says Blandamura. At their peak at the beginning of the pandemic, they had around 7,600 customers who were supplied weekly, and last summer vacation it was just over 4,300. But regardless of that, the decline is noticeable. In the shop, sales fell by around 30 percent. “Many customers only buy everyday products and save on what is not urgently needed,” he says. Although numerous regular customers remain loyal to the little paradise, there is a lack of walk-in customers.
The brothers have already had to take personnel consequences: Compared to the peak phase of the pandemic, they currently have 20 fewer employees. The situation also has consequences for local organic farming. “We are the marketplace for regional and smaller farmers.” Many of these suppliers are therefore dependent on the success of the little paradise. If things don’t go well there, they don’t get rid of a large part of their goods either.
The pandemic initially gave the organic sector record sales. While sales of organic food rose by 22 percent in 2020 compared to the previous year, it increased again last year by 5.8 percent to a good 15.8 billion euros. Then came war and inflation: According to the internet portal biohandel.de, sales in the industry fell by 13.4 percent in the first quarter of 2022, the first decline since the 2009 financial crisis.
In some places, the organic product even costs less
If you compare the figures for the entire organic sector with those of Blandamura, it is striking that the smaller organic shops are more affected, as confirmed by Kathrin Jäckel from the Federal Association of Natural Food and Natural Goods. “In particular, the small owner-managed organic shops in terms of area are suffering. There were isolated closures here.” The decline in sales is less noticeable in larger and chain stores because they are better able to cushion the current developments due to larger structures. The spokeswoman for Alnatura, one of the largest organic market chains in Germany, only reports a “slight reluctance to buy” on the part of customers in their branches.