The sales of organic products decreased by 11 per cent in one year, according to Statistics Sweden (SCB). Life has become more expensive, can this have something to do with this steep decrease? Inflation in Sweden is at its highest since the financial crisis in 2008 according SCB. What about young people? Can they afford to buy organic?
Rising inflation in the last few years might have affected the production and consumption of organic goods. The general price level for consumers is shown in the Consumer Price Index (CPI). This index is published monthly by SCB and is correlated to inflation. The graph below shows that the CPI has been increasing, especially since the start of COVID-19 in spring 2020. The CPI (and so inflation) has been much higher when compared to the financial crisis of 2008.
What effect does this inflation have on the sales of organic products?
Is organic food a luxury good?
Organic products, like all other products, increased in price. “As households become financially worse off and inflation increases, it is likely that more households will have to reprioritise and choose not to buy organic products,” says Ulf Svensson, a statistician at The Swedish Board of Agriculture.
Young people in Gothenburg confirm this. A student from the University of Gothenburg said that she may buy more organic products if she had more money. “I don’t work, so I don’t have the money to buy organic.” “I would only buy organic meat if it were cheap and a large amount, like half a kilo,” said a girl when asked when she would buy organic.
Fram Ekolivs in Gothenburg is a cooperation selling all-organic products in their store. “Customers come here because they find products here that they like and cannot find somewhere else” explains Elle, who works at Fram. He emphasises that some types of products are more affordable than others. “If you buy by weight, you can buy small amounts for a good price, but the packaged items can be seen as a luxury good,” he says.
Lena, who is on the board of Fram, says that it is always an active choice for customers to go into the store since they only sell organic products. She doesn’t see many younger people coming in, but there seems to be a small increase in recent few years amongst young customers.
Silas Barrie, living in Gothenburg, says that she used to buy more organic two years ago. “It is both because of my own financial situation and the rising food prices.”
The market for organic food is shrinking
Both the sales and the production of organic goods have dropped significantly over the last three years.
The sales of organic products in Sweden have dropped by 11 per cent since 2020, according to Statistics Sweden. The graph below shows that a decrease in sales started in 2020.
Just like a decrease in sales, the production of organic also has gone down. According to The Swedish Board of Agriculture, all types of organic farming (both animals and crops) have decreased in scale in the last three years. The production of organic crops has decreased by 9 per cent – from 2020 to 2023. In the same period, the number of animals utilised for organic farming went down by 20 per cent.
According to Ulf Svensson, it is hard to predict exactly why this is happening. Two factors might have contributed to this. The first is the overproduction of organic milk which caused the margin of profit for organic milk to decrease a few years ago. This made it less profitable to make for farmers. Secondly, he confirms that inflation might have had an impact on organic production. Recently after COVID, it skyrocketed. That could have contributed to the decrease.
So, the decrease in both sales and production of organic products might have something to do with the inflation, but it is hard to say for sure. In any case, the data shows that people buy less organic in the last three years, and young people in Gothenburg confirm this.
Featured image by Alesia Kozik
