Markets and trends
Business opportunities LOHAS has created
The market place shift toward health and sustainability opened up new business opportunities in hundreds of billions of dollars, for different businesses all over the world. In the US, the LOHAS sector is growing swiftly and represents an estimated US market size of approximately $290 billion (see Headwaters MB, 2016).
Moreover, the Organic Trade Association (OTA) has released data showing that organic products are now used in more than 80% of kitchens in US households. Across the whole of America, in towns big and small, organics are being purchased by precisely 82.3% of households (organic-market.info, 2017).
According to a survey by the Natural Marketing Institute (NMI), The State of Sustainability in America 2015: Trends & Opportunities, more than one-half of mainstream US consumers choose to buy or use environmentally friendly and sustainable products when given the choice (see Headwaters MB, 2016, p.2).
LOHAS market in the European Union (EU)
In the European Union (EU), the bio-economy sectors have an annual turnover of about €2 trillion and employ between 17 and 19 million people. They use almost three-quarters of the EU land area (European Parliament, 2017, p.1).
In Sweden, three of 10 Swedes and half of all LOHAS consumers prefer organic food products, as in 2015 the market for organic food increased by 39%. Likewise, the value of exports was equivalent to a sales of approximately SEK 23 billion (Euro 2.3 Billion), where the share of Swedish-produced organic food in the retail sector is approximately 43% (KRAW, 2016, p.05).
In Germany, significant rising importance in bio and organic supermarkets wherein 2013 the market in Germany showed an increase in turnover of 15% to reach €7.6 bn (quadrupled since 2000) (see Corpos Serio, 2014, p.3).
The natural cosmetics are becoming more and more trendy in Germany and Europe, as in 2015, the turnover generated by natural and organic cosmetics in Germany increased by 10 % to EUR 1.1bn. This makes one of the world’s pioneer markets the undisputed leader in Europe for natural cosmetics.
Moreover, with a market share of 9 %, natural cosmetics have overtaken near-natural cosmetics (6.2 %) and are now ahead by quite a distance. Together, the two types generate over EUR 2bn. The whole of the German cosmetics market is worth EUR 13.3bn, which means virtually a quarter of consumers in Germany are now buying natural or near-natural cosmetics (Vivaness, 2016, p.1).
Additionally, in 2016 the 7.8 % growth of the Swiss organic market was three percentage points higher than growth in 2015. For 2017, a record number of conversions to organic are reported by the Swiss organic association Bio Suisse (organic-market.info, 2017).
Companies that produce LOHAS products
The fact that consumers are ready to spend more on “organic” or “sustainable” products is getting around. That includes expenditures on organic and biomaterials, textiles, cosmetics, furniture and food. (see German Council, 2013)
On the other hand, companies are investing in the knowledge-based bioeconomy as an annual turnover of €57 billion and employ about 305 000 people was estimated in 2009 (see European Parliament, 2017, p.2).
An example of companies who are committed to sustainable products, are ‘thirteen of the world’s biggest clothing and textile brands have today committed to using 100% sustainable cotton by 2025. Major fashion and sports brands ASOS, H&M, Nike and Levi Strauss & Co. and Swedish furniture and household goods retailer IKEA are among some of the companies that have signed up to the Sustainable Cotton’ (organic-market.info, 2017).
LOHAS products In the UK
Similarly, in the UK, the Organic Milk Market Report 2017 showed that ‘the organic milk volumes increased by 4.4% in 2016 and attracted 1 million new households, an increase of 15%. 1 in 4 households now purchase organic milk’ (organic-market.info, 2017).
Such an increase on the organic milk opened up for a lot of companies such as OMSCo which is the world’s second largest dedicated organic milk pool in the UK, and leading organic dairy exporter to Europe and beyond (see OMSCO).
LOHAS products In Austria
In Austria, the organic market is dominated by conventional supermarket chains and discounters which account for about two-thirds of the annual turnover, wherein 2011 the retail turnover was EUR 1064.7 million with 21,843 organic operators (see IFOAM EU Group).
Moreover, ‘Austria has 21,820 organic farms, which is 19% of the country’s total number of farms’ (Organic-market.info, 2017).
LOHAS products in the US
On the other hand, in the US, ‘in June 2016 Amazon (Seattle) and Whole Foods Market (Austin) announced that they have entered into a definitive merger agreement. Amazon will acquire Whole Foods Market for approximately $13.7 billion. Whole Foods Market is the leading natural and organic foods supermarket, with more than 460 stores in the United States, Canada, and the United Kingdom. had sales of approximately $16 billion in the fiscal year 2016’ (organic-market.info, 2017).
Comparably, the total turnover of organic food in the United States in 2015 came to 43.3 billion US dollars (40.7 billion euros), 4.2 billion more than the year before (see organic-market.info, 2017). Another example is, ‘Tesco, [a British multinational grocery and general merchandise retailer] says that organic sales in its stores have risen by 15% in the past year. And the home delivery service Ocado, which stocks more than 3,000 organic products, said sales increased 16% last year.
Waitrose, [which is a chain of British supermarkets,] also said the sector was thriving. “We were the first supermarket to sell organic products in the 1980s and shoppers are as enthusiastic as ever,” a spokeswoman said. “Our latest figures show year-on-year growth of around 5%.” ‘ (theguardian.com, 2017).
Sources:
Headwaters MB: Summer 2016 report (2016), https://www.eticanews.it/wp-content/uploads/2016/10/LOHAS-Summer_2016.pdf, (accessed on 2017-06-09 12:40 CET)
Organic-market.info, USA: Organics on the rise in US households (2017-04-10), http://organic-market.info, (accessed on 2017-06-20 12:30 CET)
European Parliament: Bioeconomy Briefing (2017-01), http://www.europarl.europa.eu/RegData/etudes/BRIE/2017/595890/EPRS_BRI(2017)595890_EN.pdf, (accessed on 2017-06-18 10:30 CET)
KRAW: KRAW Market Report 2016 (2016), http://www.krav.se/sites/default/files/krav_market_report_2016_eng_webb.pdf, (accessed on 2017-06-18 17:10 CET)
Corpos Serio: TRENDS IN THE GERMAN RETAIL MARKET 2014 (2014), https://www.corpussireo.com/, (accessed on 2017-06-18 11:24 CET)
Vivaness: PRESS RELEASE (2016-10), https://www.vivaness.de/, (accessed on 2017-06-17 15:40 CET)
German Council for SUSTAINABLE Development: Brochure Sustainable Shopping Basket (2013), (2013) https://www.nachhaltigkeitsrat.de/, (accessed on 2017-06-16 12:20 CET)
Organic-market.info: Organic textiles: big brands commit to sustainable cotton (2017-06-16), http://organic-market.info, (accessed on 2017-06-20 11:10 CET)
Organic-market.info: Organic Milk Market Report 2017 (2017-06-16), http://organic-market.info, (accessed on 2017-06-20 13:00 CET).
OMSCO: Why OMSCO (no date), http://www.omsco.co.uk/why_omsco, (accessed on 2017-06-20 18:28 CET)
IFOAM: Austria (No date), http://www.ifoam-eu.org/pt/austria, (accessed on 2017-06-20 16:26 CET
Organic-market.info: Austria: 30 percent organic by 2025 (No date), http://organic-market.info, (accessed on 2017-06-20 19:30 CET)
Organic-market.info: Amazon acquires Whole Foods Market (2017-06-19), http://organic-market.info/, (accessed on 2017-06-20 18:28 CET)
Organic-market.info: USA: organic frontrunners in east and west (2017-06-09), http://organic-market.info/, (accessed on 2017-06-22 17:27 CET)
theguardian.com: Organic food sales soar as shoppers put quality before price (2017-02), https://www.theguardian.com/, (accessed on 2017-06-22 15:25 CET)
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