The market for tropical and exotic fruitsin the European Union

Gustavo FerroProFound – Advisers In Development

March, 2013 – Proexport seminar

Introduction

• Gustavo Ferro- Market analyst: agro-industrial products

Fruits & vegetables (fresh and processed), coffee, cocoa and cocoa products, vegetable oils, spices & herbs

Main clients: CBI, SIPPO, Proexport, CATIE, IDB, IDH

- ProFound – Advisers In Development: value chain development services: maket intelligence, VCA analysis, trainings, projectfacilitation, business development

• Participants

Agenda

Part I: EU market overview – tropical and exotic fruits

•EU fruit consumption and production

•Tropical vs. Exotic fruits

•European market characteristics

•Entry channels and main players

•Market trends and developments

Part II: Export guidelines – diversifying markets• Going East – Czech Republic case

Why to venture into new markets

Trade channels

Existing and future opportunities

• Business practices

Product marketing

Delivery, payment, services

Dates, figs, exotic

Other fruit

Table grapes

Bananas

Melons & papaya

Stone fruit

Citrus fruit

Apples and pears

0 5 10 15 20 25

EU-27 Gross per capita fruit consumption in kg / year, 2010

European Union – fruit consumption

Freshfel Europe, 2011

1 Cyprus

2 Italy

3 Romania

4 Portugal

5 Greece

Largest per capita consumers

European Union – fruit production

Italy

Spain

France

Poland

Greece

Germany

Romania

Portugal

Austria

Hungary

Netherlands

Belgium

- 2 4 6 8 10 12 14 16 18 20

EU fruit production 2011, in mln. tonnes

FAOSTAT, 2013

1

2

3

4

5

European Union – tropical fruit profile

12

3

4

5

ConsumptionGermanyUnited KingdomItalySpainFrance

ImportsBelgiumGermanyUnited KingdomItalyThe Netherlands

1

2

3

4

5Guavas and mangoes

Avocados

Pineapples

Bananas (incl. plantains)

Main suppliersCosta RicaEcuadorColombiaDominican RepublicPeru

• Tropical vs. Exotic fruits

VS.

• Unfamiliar to most consumers• Low market volume, high market value• Higher risks• Alternative market entry strategy

Exotic fruits – a matter of definition

yang meigolden kiwi

Exotic fruit markets in the EU – market profiles

Main tradersMain marketsHigh qualityStrict controlsConsolidated markets

Fruit productionTraditional cuisinesLatin Am. population (Spain)

Low consumptionFruit production (apples, pears, berries)TraditionalMarket growth

NETHERLANDS

FRANCE

BELGIUM

GERMANY

ITALY

UNITED KINGDOM

SWEDEN

CZECH REPUBLIC

BULGARIA

POLAND

AUSTRIA

SPAIN

PORTUGAL

LUXEMBOURG

DENMARK

LITHUANIA

0 5 10 15 20 25

Largest EU importers of exotic fruits, in 1,000 tonnes % of Colombian supplies

DIRECT IMPORTS

Potential competitors…

Madagascar 30% of EU suppliestamarinds, lychees

Vietnam5% of EU suppliespitahaya (decorative)

KenyaLow-cost passion fruit

Malaysia, Thailandpitahaya, carambola

Trade statistics – reflecting market profiles

Largest importer and

2nd largest supplier: re

-exports!

Product Origin Destination Average price in May 2012

Granadilla Colombia Netherlands 9.09

Denmark 10.83

Passion fruit Colombia Netherlands 6.50

Kenya Netherlands 5.75

Colombia Germany 4.38

Israel France 6.50

Colombia France 6.50

Physalis Colombia Netherlands 7.88

Colombia Germany 5.11

Pitahaya Colombia Netherlands 9.67

Vietnam Netherlands 5.65

Colombia France 9.00

Vietnam France 9.00

Selection of price indications, € /kg, CIF

Source: Market News Service of International Trade Centre, 2012

Price competitiveness – Colombia

How to convey and

sell quality?

Trade Structure

Distributor

National or Intra-EU

Importer-wholesaler role

orindependent

Retail channels or Food service

Major retailers vs. specialised

Vertical integration; tightening of requirements

Intermediary

Importer, Agent

Agent’s role diminishing

Mainstream vs. specialised importers

Consolidation!

Entry point

Sea transport(mainstream)

Air cargo, via main EU airports

(specialised)

Connected to distribution system

Temperature-sensitive transport; avoid

mechanical damage

Trade channels – main actors

Minimum order quantities differ between trade channels

However, ensure you can deliver:

full containers or full pallets

Orders are made every 3-4 days

• Interest in exotic cusines / exotic fruitsTravelling / Store promotionsCooking shows / Internet (websites, blogs) / Youtube culinary channelsOther media

EU market trends – exotic fruits

• Healthy living – fruits containing healthy components (antioxidants, dense nutrients) “Superfruits”

introduced in small amounts, as ingredientsfor the food industry (juices, smoothies); slowly making it to supermarket displays in fresh form.“Less processing” trend

• SustainabilityConsumer awareness: environment + socialOrigin TraceabilityCertification

EU market trends – exotic fruits

EU market trends – exotic fruits

• Food miles; Buying local (e.g. Streekmolen)

Related story: Soil Association (UK) case

EU market trends – exotic fruits

• Economic crisis Market polarisation

Consumption of cheaper items

Opportunity to indulge

• Higher requirements, stricter controls production and handling processes

Health and safety (GlobalGAP, HACCP, BRC)

MRLs (Pesticides) – Further reading

No GMOs!

Novel Food – Further reading