Wholesome food, unwholesome profits

GERMANY'S opticians loathe Günther Fielmann. By selling attractive spectacles at low prices in proper shops, he demystified the profession, uprooted a cosy oligopoly, and built up Europe's biggest chain of discount opticians, with a turnover last year of DM1 billion ($600m). Mr Fielmann's mass-market instincts are also focused on a different target. Is he the man to shine a light into what should be one of Germany's most profitable business niches?

Mr Fielmann, who has his own impeccably organic farm in Hof Lütjensee, near Hamburg, believes that modern farming is unethical and unhealthy. Mass-produced meat means cruel treatment of animals and over-use of antibiotics, he argues. Arable farmers drench the soil with pesticides and other chemicals. Many Germans agree with his sentiments: around three out of four, according to a poll by the Allensbach market-research institute, would like to eat more food that is produced naturally. For some time now Lufthansa's first-class passengers, and guests at German luxury hotels, have been offered organic food. In the wake of mad-cow disease, many student cafeterias and even a few mid-priced restaurants are joining gourmets in the switch to organic fare.

Yet the organic-food business in Germany is a shambles. The existing chains of health-food shops are amateurishly managed, poorly stocked and often exorbitantly priced. Ecological farmers occupy only a sliver of the country's agricultural land (see chart); and they seem to value a stress-free life more than profit. Marco von Kessel, a former manager in the food industry who is now an organic farmer, looks shocked at the suggestion that he should expand his farm to raise thousands, rather than hundreds, of cattle and pigs. “That would be against the whole idea,” he explains. “You can't have mass production of organic food.”

Mr Fielmann finds such unbusinesslike talk mystifying. He dreams of a chain of organic supermarkets, selling a range of green-minded products at competitive prices. But he is making heavy weather of it. After several years, and after investing several million D-marks, Mr Fielmann's two farms so far supply only a few dozen bakeries in the Hamburg area, plus meat and dairy products for the one—rather modest—supermarket based at his farm.

The difficulties Mr Fielmann has experienced reflect the cost and labelling problems of green business. Rearing animals humanely can be too expensive to be profitable; growing crops organically is more viable, but even here volumes are often too low to pay overheads on processing, distribution and marketing. In the shops, meanwhile, few consumers are sure that what they are buying is genuinely organic. In Germany scores of different agencies certify ecological correctness, but no national symbol yet exists.

Big supermarkets are beginning to fill the gap. Tengelmann, which owns some of the country's biggest chains, has introduced a brand for organically produced milk and cereal products called Naturkind (child of nature), as well as a new line in humanely farmed meat, with, it says, pleasing results. However, the supermarkets are treating the subject gingerly. After all, labelling one lot of food as ethical and healthy does little for the credibility of the rest of their wares.