Methodology for statistics on sales and shares of organic products in retail trade
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1 Methodology for statistics on sales and shares of organic products in retail trade Final report Prepared by Bodil Mortensson Örebro, 2006
2 2 1. Introduction The objectives of the report Participants Work plan of the project Background Data sources Data on Food sales Household Budget Survey Selection of reference year Selection of food items Coffee Milk Yoghurt and sour processed milk Butter Rice Bananas Potatoes Dividing the food items into two groups; organic and non-organic Calculating the market shares in the register of Food sales Results from the calculations of market shares Comparison with the Household Budget Survey Summary Conclusions Suggestions for further work Sources... 9
3 3 1. Introduction The market shares for organic products have increased over the last couple of years. However, today there is no regular statistics covering the market share of organic products compared to non-organic products, which makes this increase difficult to consolidate in statistics. This is the final report in the project on Methodology for statistics on sales and shares of organic products in retail trade The objectives of the report This project aims at finding a methodology for sale of organic products and to calculate the market shares for organic products compared to equivalent non-organic products. The project also aims at comparing the shares for the sale of organic products with the share of purchase of organic products by using the Household Budget Survey (HBS). We will select a number of food items or groups and calculate the market shares for them by using EAN-codes. Fruit and vegetables are excluded in this project, as they often don t have an EAN-code (unless sold canned etc.). Figure 1. EAN-code 1.2 Participants This project was carried out by Statistics Sweden at the unit for Agriculture statistics by Bodil Mortensson. My colleagues at Statistics Sweden, Gunnel Wahlstedt, Daniel Lennartsson and Åsa Berglind have made valuable comments to this report. 2. Work plan of the project The steps in this project are: 1. Selection of reference year for data collection 2. Selection of food items or groups 3. Dividing the data of food items into two groups; organic products and non-organic products 4. Calculating the market share for the chosen organic food items or groups in the register of Food sales 5. Comparing the market shares for the food items or groups in the Household Budget Survey 3. Background At Statistics Sweden data on food sales has been collected from different registers from enterprises in retail trade and filling stations. As a majority of the food items in these registers are 1 Contract no , signed in December 2005.
4 4 registered with EAN-code work is done how to identify organic products amongst all products. 4. Data sources For this project we have, at Statistics Sweden, access to data from two sources. One is the register of Food sales 2 and the other is the Household Budget Survey Data on Food sales Retail trade of food and beverages (NACE 52 and 50.5) in Sweden is dominated by five big chains; all in all they have a market share of 85 percent. Apart from these five chains shops food and beverages are also sold in detached shops and filling stations. Statistics Sweden collects data from retail trade of food and beverages from different sources. For the five big chains data is collected through registers. All in all, the register for 2005 contains about items. About of these items are sold with 12 percent VAT which is the VAT used mainly for food items. The sales are recorded in monetary terms Swedish crowns (SEK). In the register, most items could be identified with an EAN-code. Data from other sellers of food and beverages (except the five chains) is collected via an annual survey. As most items have an EAN-code it is possible to identify organic products. All items in the register also have a COICOP-code this facilitates comparisons with for example other surveys. The reference period in the register is a calendar year. 4.2 Household Budget Survey The Swedish Household Budget Survey is carried out by Statistics Sweden. In 2003 the survey was thoroughly revised. One result of the revision is that it is possible to find data on organic products are included. During a period of two weeks the households in the sample are asked to note all their purchases (1 litre of milk, 5 stamps, 2 pair of socks etc) a cash-book/diary. In the diary the household is also asked to mark if the purchased product is organic. This gives us information about the households purchased amount of organic products and can also be a possibility to see what kind of households that buys organic products. The purchases are recorded in monetary terms Swedish crowns (SEK). The purchases in the Household Budget Survey are coded in COICOP. 5. Selection of reference year The first step in this project was to decide what year to collect data from. We have access to data from 2005 from both the register of Food sales and HBS, so this year was chosen as a reference year. 2 Food sales can be found at: asp 3 The Household Budget Survey can be found at: asp
5 5 6. Selection of food items The second step was to choose food items for this project. Certain criteria were put forward when choosing food items: The chosen food items should easily be recognized via EAN-code The chosen food items should also have non-organic equivalents The chosen food items should be items that could be supposed to be found in most shops all over the country The chosen food items should be items that are common in Swedish households The chosen food items should be items that are consumed by both sexes and all age groups In some cases it was easier to choose a group of food, such as rice, as it was difficult to distinguish between different kinds of rice. It was also considered not necessary for this analysis to divide between different kinds of rice. When analysing data we have excluded some products, for example flavoured butter has been excluded from the butter-group (see below for further examples/exclusions). The food items chosen for this project were: Coffee Milk Yoghurt and sour processed milk Butter Egg Rice Bananas Potatoes 6.1 Coffee We have chosen ground percolator coffee (not ice coffee or instant coffee). The market share for coffee is based on the four biggest brands in Sweden. They have a total of about 85 percent of the market for ground percolator coffee in Sweden. 6.2 Milk There are four kinds of milk in Sweden; the difference between them is the fat content. Swedish name of product Fat content, % Minimjölk 0,1 Lättmjölk 0,5 Mellanmjölk 1,5 Standardmjölk 3 There are two COICOP-codes for milk; for milk with a fat content of more than 1,5 percent and for milk with a fat content of 1,5 percent or lower. The three first types of milk (minimjölk, lättmjölk and mellanmjölk) have the same COICOP-code and are therefore put together in the same group in our analysis.
6 6 6.3 Yoghurt and sour processed milk This group contains processed sour milk (filmjölk) and yoghurt, flavoured as well as natural. Yoghurt used, for example, in sauces is excluded. 6.4 Butter Flavoured butter (butter with garlic, parsley etc) has been excluded. 6.5 Rice This group consists of different kinds of rice; basmati rice, jasmine rice etc. Rice products like rice pudding etc are excluded. 6.6 Bananas We have excluded plantains (musa) from the register and also mix with different kinds of fruit where bananas is one of the ingredients. 6.7 Potatoes From this group we have excluded potato products like: deep-frozen potatoes, crisps, potato flour, potato salads etc. 7. Dividing the food items into two groups; organic and non-organic After having chosen the food items, the next step was to identify the organic product as well as the non-organic equivalent in the register. This division was based upon different information: The name of the certifying company for organic products in Sweden, KRAV 4, sometimes appears in the name of the product If the product has ekologisk in the name we know it is organic (ekologisk=organic) If the product (with a certain EAN-code) is listed by KRAV as an organic product Some brands have only organic products 8. Calculating the market shares in the register of Food sales The market share is calculated from the register of Food sales. After having divided the food item/group into one organic part and one non-organic part, the sales value for each part is calculated. The market share for organic products within a group is the quota between the sales values for the organic products and the sales value for the non-organic products. The calculation of market share a product group consists of the following steps: 1. the sales value for the organic food item or group is calculated 2. the sales value for non-organic food item or group is calculated 3. a total amount for the product group (organic + non-organic) is calculated 4. the share for the organic food item or group is calculated 4 KRAV - KRAV s standards meet the IFOAM Basic Standards and the EEC regulation for organic production. KRAV is accredited by IFOAM (International Federation of Organic Agriculture Movements). KRAV is authorised by The Swedish National Board of Agriculture and The Swedish National Food Administration to carry out inspection of organic production in Sweden. The KRAV-label is a registered brand. Only the companies that have signed a contract with KRAV and is authorised by KRAV may use the name KRAV or the KRAV-label on a product.
7 7 8.1 Results from the calculations of market shares In table 1 below, the calculations from the register of Food sales give the following results for market shares for organic food items. Table 1 Market shares for organic products form the register of Food sales Food item/group COICOP-code Market share for organic product, % Egg ,7 Milk, fat content > 1,5 % ,3 Milk, fat content <=1,5 % ,3 Yoghurt and sour processed milk ,5 Rice ,3 Coffee ,8 Butter ,9 Bananas ,4 Potatoes ,5 As seen in the table the market shares range from almost 2 percent to almost 12 percent. 9. Comparison with the Household Budget Survey The fifth step in the work plan for this project is to compare the results from the register of Foods sales with the Household Budget Survey. Data in the register of Food sales is based on sales values. Data on purchases from the Household Budget Survey is based on purchases. The biggest differences between the sales values and purchases are that in the register of Food sales purchases from organisations and companies are included and in the Household Budget Survey it is purchases from households. In table 2 the market shares for organic products from the register of Food sales and market shares from the Household Budget Survey is shown. Table 2 Market shares for organic shares comparison between two data sources. Products/product group Market share for organic products from Food sales, % Share of food sales of organic products from HBS, % Coffee 3,8 3,9 (±1,4) Milk, fat content > 1,5 % 6,3 6,7 (±1,7) Milk, fat content <=1,5 % 9,3 11,9 (±1,8) Yoghurt and sour processed milk 8,5 7,6 (±1,4) Butter 1,9 2,1 (±0,9) Egg 11,7 14,4 (±2,3) Rice 4,3 2,6 (±1,4) Bananas 5,4 6,3 (±1,5) Potatoes 2,5 2,1 (±0,9) As seen in the table there is a good conformity between these two sources, the register of Food sales and the Household Budget Survey.
8 8 10. Summary 10.1 Conclusions The aim of the project was to develop a methodology for how to, in an easy way, find reliable data on the sale of organic products and their market share compared to conventional equivalent. The aim is also to compare the shares of the sales of organic products from this project with the shares of purchases of organic products from the Swedish Household Budget Survey, The register of Food sales, which has data on individual products with an EAN-code, makes it possible to identify organic products. Calculating the market shares from this register gives an indicator of the development of organic products. This register is a good source of reliable data on organic products. The revision of the Household Budget Survey, which meant that the purchases of organic products are marked in the questionnaire, has given us another good source of reliable data on organic products. When comparing the register of Food sales with the Household Budget Survey one can see that the accordance on product level between these two data sources is very good. One conclusion is that both the register of Food sales and the Household Budget Survey give an easy way access to data on organic products, sales and purchases respectively. Another conclusion is that both these surveys can be used for calculating market shares for organic products. This project shows that it is possible to receive data on organic products within the frame of ordinary surveys. It is an advantage to have the data on organic products in the same survey as data on non-organic products the same methodology is used for both kinds of products Suggestions for further work In 2004 we used data on purchase of organic products from the Household Budget Survey and combined it with telephone interviews to households in the sample for the second quarter We asked the households questions concerning their attitudes to organic products and the purchase of them. The results were reported on type of household, region, income and level of education. This kind of combination of data and interviews can be renewed to see if the attitudes and purchases to organic products have changed. Continue to calculate market shares for other organic products. Further improvements of the quality of the register of Food sales to find, if possible, more organic products in the register of Food sales. Further improvements of the use of the register of Food sales. Quantity is a variable in the register but the quality of it needs to be tested. Finding more sources to compare the results with.
9 9 Some organic products, like milk, are sometimes sold as non-organic. Can we combine and compare with data on production? 11. Sources Register of Food sales 2005 Household Budget Survey 2005
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