Page 103 - Index

european market
Entering European Market Has Bene ts, Challenges
The buying power of European importers is high. For niche or premium products, it is easier for suppliers to in uence the process, thanks to the growing demand for tropical, exotic and high-quality, off-season fruit and vegetables. These fruits and vegeta- bles are not easily replaced by other products. However, strict buyer requirements, as well as integration of the supply chain, will make it increasingly harder for new and small companies to enter the market.
MARKET ENTRY: WHICH OPPORTUNITIES, BARRIERS WILL YOU FACE TRYING TO ENTER THE EUROPEAN MARKET?
The European market for fresh fruit and vegetables is a very mature market that is well managed by legislation and certi cations. Oppor- tunities can be found in the accurate response to market needs, good compliance with buyer requirements and product differentiation.
1. CERTIFICATION, HIGH STANDARDS MAKE ENTRY DIFFICULT:
Certi cation plans are essential on the European market for fresh fruits and vegetables. Although different certi cates are common in different European markets, all require quality, food safety and — to a certain extent — awareness of environmental or social aspects of your production. According to European buyers, your certi cation and pest analysis often receive just as much attention as the product itself. It is mainly the retail sector that is continuously raising the standard, and importers act on it. Consequently, it is becoming more dif cult, especially for smaller exporters, to enter the European market.
2. TRADE RELATIONS ARE INTENSIFYING: As rules get stricter, supply chains become more direct. Retailers want to be closer to the source, and importers integrate with growers to maintain control over quality standards and to ful ll the needs of retail customers. Close co- operation can enhance your reputation as a reliable supplier. Buyers are generally not eager to replace well-established relationships that meet all of their requirements or that supply speci c brands. Never- theless, attractive pricing and differentiated products are always good arguments to win their con dence. Remember that reliability is a two- way street, and poor market conditions can bring out the worst in peo- ple. Product quality claims are a common practice in the fresh trade.
3. GROWER LICENSES: Having a license from seed companies may lower the threat of new entrants temporarily. Access to the right plant material and varieties in order to meet quality and taste requirements is important, speci cally for more common products. Remember that breeder rights are strictly regulated in Europe.
COMPANY COMPETITION: WHO ARE MY RIVALS?
Competing in Europe is a game of price negotiation, especially when you’re not part of a supply program. Complying with your buyer’s re- quirements and keeping your promises will keep you in the game.
1. POSITION IN THE MARKET: The intensity of competition depends on the product, geographical market, sales channel and segment. Com- petition between suppliers of commodity products such as bananas, pineapples and oranges is high, with a few large rms dominating the
FROM STAFF AT THE CENTRE FOR THE PROMOTION OF IMPORTS (CBI)
market. For most products, there are many suppliers from which buyers can choose. Exporting to the European market principally involves com- petition on price, volume and adherence to strict rules and regulations. Setting your product apart from the rest by differentiating on added val- ue such as quality, taste and sustainability may decrease competition or give you a more advantageous position. For smaller niche markets in Europe, such as exotic products, competition can be less intense, since those products are not widely available or grown in Europe.
2. EUROPEAN FOES ARE PRODUCTIVE, WELL ORGANIZED: The Euro- pean Union provides one of the largest markets for fresh fruit and vege- tables, and suppliers can expect their products to be moved extensively across the continent. More than 80% of European fresh exports are destined for the internal market. For in-season fruit, southern Europe is a strong competitor of suppliers from developing countries.
3. SOUTHERN EUROPE IS STRONG IN PRODUCTION: Based on 2016 production data, Italy and Spain produced more than half of European fresh fruit (mainly grapes and citrus fruits), and more than 40% of the fresh vegetables (excluding potatoes). The Netherlands is also a top producer of fresh vegetables (tomatoes, cucumbers and sweet peppers from greenhouse horticulture). As an exporter, be aware that local pro- duce in Europe is preferred more than imported products.
4. CLIMATE AND GEOGRAPHY DETERMINE COMPETITIVENESS: Op- portunities will vary depending on your product but are also determined by geography and climate. The principal suppliers to Europe produce counter-seasonal or tropical fruit that is dif cult to grow in Europe. In 2017, bananas represented more than 34% of the total import value from developing countries, followed by grapes, avocados and limes. In recent years, imports from South Africa (citrus, grapes), Turkey (grapes, citrus), Peru (avocado, mango, berries), Morocco (citrus, soft fruit) and Mexico (limes, avocado) increased. For vegetables, the imports show a gradual growth. Europe imports tomatoes, peppers, potatoes and on- ions from nearby countries such as Morocco, Turkey and Egypt. Peru and Kenya are signi cant suppliers of asparagus and beans, respectively.
4. POSITION IN THE SUPPLY CHAIN: The buyer position of European supermarkets is strong and is expected to increase. This is evident in the demanding requirements and strict conditions supermarkets set. Large retail organizations also put tremendous pressure on prices. This pressure is then passed on from service providers and importers to exporters and producers. It is unlikely your European buyer will lose money. When price levels go down, they will most likely negotiate the new terms of delivery with you. pb
CBI, the Centre for the Promotion of Imports from developing countries, contributes to sustainable and inclusive economic development in developing countries through the expansion of exports from these countries to Europe. CBI is part of the Netherlands Enter- prise Agency, which stimulates entrepreneurs in sustainable, agricultural, innovative and international business. It aims to improve opportunities for entrepreneurs, strengthen their position and help them realize their international ambitions with funding, networking, know-how and compliance with laws and regulations. The Netherlands Enterprise Agency is a government agency that operates under the Ministry of Economic Affairs and Climate Policy. Read the full report and/or stay up to date on CBI’s latest studies in fresh fruits and vegetables via their website: www.cbi.eu/market-information/fresh-fruit-vegetables/
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