Austria is a small European country with a total territory of almost 84.000 square kilometers, which is about the same size as South Carolina. A member of the European Union, Austria has a total population of 8.7 million citizens. Having an annual gross domestic product (GDP) of more than US$400 billion, the Austrian economy is divided into 2% agriculture, 28% manufacturing, and 70% services. However, the agriculture industry utilizes up to 40% of the national territory, while another 47% is forested. Nevertheless, due to Austria’s high level of industrialization and mechanization, less than 1% of the population is employed by the agricultural industry.
In terms of natural resources, Austria features some fossil fuels, lignite, timber, iron ore, copper, zinc, antimony, tungsten, graphite, salt, and hydropower. Within the agriculture industry, the country’s leading products include grains, potatoes, wine, fruits, dairy products, cattle, pigs, poultry, and lumber. Similarly, in terms of trade, Austria’s most important partners are fellow EU members, such as Germany and Italy, as well as Switzerland. This article explores the status of agricultural and organic markets in Austria.
Organics and Agriculture Markets in Austria
In spite of its small agricultural industry, Austria is one of the largest consumers and producers of organic agriculture in the world. In fact, the concept of certified organic farming and foodstuffs has existed in Austria for decades. Therefore, the country has a well-developed and wide market base for organic products, most of which are featured and sold in traditional retail supermarkets. During 2016, some 550.000 hectares of land in Austria were devoted to organic production, which equates to approximately 20% territory devoted to agriculture within the country. Likewise in 2016, about 18% of Austrian farms were totally devoted to certified organic production, which accounts for more than 20.000 agricultural operations.
The most important organic products cultivated in Austria are wheat, glass-cover ley, rye, corn, lentils, wine, sugar, dairy cattle, goats, sheep, and poultry. Within, the Austrian organic market there are strict labeling regulations that comply with both national and EU standards. At the same time, Austrian households spend a significant quantity of money on organic products and this amount has increased substantially in recent years. Furthermore, Austrian consumers are willing to pay large price premiums, between 20% and 90%, for organic quality foodstuffs.
Meanwhile, there are still market growth and market entry potential for foodstuff products in Austria’s organic markets, particularly goods that are not produced domestically. Even though European suppliers dominate organic trade with Austria, certified North American suppliers have a window of opportunity to enter into Austrian organic markets. For example, Canada and the EU are in the midst of implementing the Comprehensive Economic and Trade Agreement (CETA), which will grant Canadian agricultural products easier access to European markets. Similarly, the United States holds a competitive advantage over Austria within certain organic sectors, including dried fruits, tropical fruits, nuts, organic soybean, chocolate, and snacks.