Organic businesses have a particularly hard time finding a successor, because whether it’s an organic farm, an organic food producer, or the organic grocery store down the street, the new manager must also share the values of the outgoing owner.
Fair Trade, Sustainability, and Environmental Protection
This is what customers who remain loyal to organic producers and retailers demand. They embrace these ideologies—from healthy, locally produced food to environmental protection and fair trade. It is these added values that customers are willing to pay a premium for. As a result, demand continues to grow. The pioneers of the organic movement developed a veritable market segment out of small organic grocery stores and organic farming in the 1970s and 1980s.
The industry now generates around eight billion euros in revenue; according to figures from the German Federal Association of Natural Foods and Natural Products (BNN), the food retail sector accounts for just under half of that, at 3.29 billion euros. Alongside some 40,000 conventional grocery stores, approximately 2,500 organic grocery stores and supermarkets have successfully held their own for years—especially large organic chains such as Denn’s, Alnatura, and Superbiomarkt.
The founders of brands such as Voelkel, Rapunzel, and Lebensbaum had a clear vision of environmental protection, healthy nutrition, and fair trade, which they implemented through their companies. This builds trust: Customers want to be able to trace where their food comes from and receive credible confirmation of its organic production. When a large conventional food corporation launches an organic division, it’s more likely to be assumed that it’s acting for marketing reasons and that quality must take a back seat to profitability. Elke Röder, managing director of the BNN, describes this as a “remarkable development”: “On the one hand, many discounters have expanded their organic product lines. On the other hand, there has been a massive focus on advertising and marketing to more strongly highlight these organic offerings in their product lines.” Her assessment: “Conventional retailers may be able to jump on the organic megatrend, but they can’t hijack it. And the original organic brands continue to grow steadily.”
Expand your search radius and take advantage of advisory services
The industry is doing well and could continue to do so—if it weren’t for the generational shift. For some time now, the majority of organic food producers and processors, as well as the operators of organic stores and supermarkets—who meet at trade shows like Biofach in Nuremberg—have had to urgently address the search for a successor.
It’s not always possible to find someone in the family who wants to continue the business with the necessary idealism. Another option is to transfer the business to an employee who has already proven their commitment and competence. The third option is to sell to a suitable outside candidate. Occasionally, larger companies also show interest in organic brands. This can be problematic if these companies are not themselves organically operated and have no intention of becoming so; transparency and customer trust are at stake. Another alternative is to transfer the business to a holding foundation—which, however, must then also be managed. In addition, the money remains within the company.
Even for entrepreneurs in conventional industries, finding a successor is often no easy task. No entrepreneur wants to hand over their life’s work to someone who merely carries on the idea that once made the company great—simply because it markets well—but fails to breathe life into it. In such cases, it makes sense to use a business exchange that connects the outgoing entrepreneur with suitable prospective buyers. It costs very little and can expand the scope of the search many times over.
