Wellness, organics and sustainability have become buzzwords in modern consumer marketing, but the mainstreaming of “green” lifestyle is creating some challenges for the German retailers that pioneered these products.
As the country gears up for the holiday shopping season, the Reformhaus cooperative, a long-established promoter of homegrown health and beauty in the retail sphere, is morphing – gently – to stay competitive against incursions from discounters, the bite of inflation and shifting consumer habits.
The unique mix of organic food store, nutritional supplement shop, alternative medicine purveyor, no-additives cosmetic source and knitwear emporium has been a star in the German commerce firmament for generations. With its roots in the 19th-century Lebensreform (life reform) movement, which embraced nature and rejected industrialisation, Reformhaus stores are independently operated either as individually owned stores or regional chains, but they come together to centralise purchasing and marketing.
With an unmatched tea and slipper selection, the human-scale outlets also conjure a Gemütlichkeit (warmth and good cheer) increasingly rare in today’s world of big-box stores and online shopping.
“We’re somewhere between a chemist, a beauty shop, a mom-and-pop store and a petrol station, where you can quickly pick up a few things you need on your way home,” said Cathrin Engelhardt, the Hamburg-based CEO of the largest chain of Reformhäuser in northern Germany, with 36 locations.
Lebensreform proponents built communities – largely in cities – seeking to deepen their connection to nature while rejecting the toxins of industrialised society and conventional farming. Vegetarianism, natural healing practices, naturism, the anti-alcohol movement and early green activism were all offshoots of the movement. Practitioners included Hermann Hesse, Carl Jung and Paul Klee. The associated stores were first movers in the market for special diet foods including gluten-free, hypoallergenic and vegan products whose appeal has exploded in recent decades.
The first Reformhaus opened in Wuppertal in 1900 and they began springing up around Germany and Austria in the early decades of the 20th century, ultimately forming a standards-setting cooperative of independent entrepreneurs in the 1920s. In the Netherlands there was an organic development of its own type of similar shops, while in the UK the closest equivalent is Holland & Barrett, founded in the late 19th century.
Under Adolf Hitler, the focus on local products and health found favour with Nazi ideologues’ hypernationalist insistence on homegrown produce and a fixation with the physical fitness of the Volk.
In their 1970s heyday there were about 2,000 Reformhäuser in Germany alone. While the count has since shrunk to about 900, it appears to have stabilised there.
Bioläden, or organic food stores, which focus more on fresh produce and do not operate a cooperative, ate away at business during their big expansion and consolidation phase in the late noughties, and big supermarket chains, chemists, and later discounters such as Aldi and Lidl have muscled in on the market in the last decade by offering a wide range organic products at scale for lower prices.
They also allow one-stop shopping for customers who buy only select products such as meats or vegetables from the organic shelves. Germans bought €16bn-worth of organic groceries last year, with 30% purchased at discounters.
In an interview at one of her “Brooklyn-look shops” with faux brick lining the walls, Engelhardt, 57, said maintaining cherished traditions while grappling with evolving consumer expectations was a constant battle. She said the key to defending her family-owned company’s market niche was knowing her customers.
“One of our main target groups is wellness-oriented women over 45,” she said, noting that the small shops allow for more customer assistance. “They are often mothers whose kids no longer need them quite so much and can start thinking about self care, or have the means to buy each other those kinds of gifts.”
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Young women seeking natural cosmetics, Scandinavians stocking up on exclusive products they cannot get at home, and people on restricted diets due to health concerns are also the customers Engelhardt has in mind when filling her store shelves.
Reformhaus stores had a modest 0.85%-rise in turnover in 2023 to €736m compared with the previous year, which was still marked by the pandemic. The sector expects 1% growth this year.
Despite the at times woo-woo image of some of the Reformhaus product line of potions and herbal extracts, Engelhardt said she was careful not to market her wares in opposition to conventional medicine.
However, she swears by manuka honey produced from the nectar of a tree native to New Zealand that has purported health benefits. She sells it for about €50 a jar and reports brisk demand.
Engelhardt said that Germans, hit hard by inflation in recent years, often looked at their investment in pricier products as a kind of risk management when it came to their health, in a country obsessed with buying insurance.
“When Germans go hiking they put a lot of thought into planning what goes into their pack,” she said. “That’s how they look at wellbeing and wellness products. If you can even just improve the odds of staying healthy then it’s worth it to you.”