Image for Strong Sales of Organic Foods Attract Investors

PARIS — Even during a period of rising food prices and economic uncertainty, Damien Bignon, a poultry farmer in the Paris region, cannot meet the demand from local markets and stores for his organic eggs.

At the Ferme des Beurreries near Feucherolles, west of the capital, Mr. Bignon employs five people overseeing 3,000 chickens on 432 acres. He also produces organic cereals for his own feed and other clients and wheat to sell to a neighboring mill.

Mr. Bignon thinks he could comfortably expand to 12,000, matching the number of chickens on the farm in 1990 before its conversion to organic operations. But he is determined to manage carefully any growth to maintain quality, keep customers satisfied and not crowd out other local farmers. He charges 2 euros ($2.82) for a half dozen eggs — about twice the cost of factory-farmed eggs at a French supermarket.

“The issue for us is retaining that success without falling into the traps of industrialized agriculture,” he said. “There’s risks in organic becoming a mass market.”

Sales of organic foods appear robust across Europe and the United States despite weak economic conditions and rising inflation. The strong sales are attracting more interest and activity from investors, who see potential in mergers through economies of scale, especially in Europe’s more fragmented market.

In December, Compagnie Biodiversité, the French owner of Léa Nature, which supplies organic food, health products, textiles and cosmetics through large retail channels, announced its purchase of a large stake in Ekibio, another French player. That alliance makes it France’s second-biggest organic food specialist, behind Distriborg, which is owned by the Dutch group Royal Wessanen.

Wessanen, which has been divesting assets in North America, is trying to expand ...

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