THE PLANTS AND YOUNG PLANT MATERIAL MARKET IN THE NETHERLANDS

Transcription

1 CBI MARKET SURVEY THE PLANTS AND YOUNG PLANT MATERIAL MARKET IN THE NETHERLANDS Publication date: December 2007 Report summary This CBI market survey discusses, amongst others, the following highlights for the plants and young plant material market in The Netherlands: The market for plants and young plant material in The Netherlands ranks sixth in the EU. It is a stable, saturated market. Most interesting for developing country exporters is the large demand for young plant material from The Netherlands, which is one of the major plant producers in the EU. The production of plants continued to increase between 2004 and 2005, registering a 6% growth. Company scales continued to increase. Furthermore, growers are increasingly organising themselves in growers associations and developing concepts. There are two main import flows of young plant material. Firstly, most young tropical pot plant material is imported by specialised importers and re-sold to nurseries. Secondly, a considerable import flow consists of young cut flower material, like Dendranthema cuttings. Many Dutch breeding companies source these cuttings in their own propagation facilities or subsidiaries in developing countries. In the case of finished plants, most imports (64%) go directly to wholesalers (or wholesale nurseries), which often have nurseries to acclimatise or finish the plants. The role of the Netherlands auctions is relatively small when compared to the cut flower trade, accounting for 36% of imports. Imports to The Netherlands increased by 7% annually between 2002 and Developing countries traditionally have a strong position in the Netherlands import market for cuttings. Imports of cuttings from developing countries continue to grow. A large part of these imports is re-exported. Netherlands growers are increasingly looking for opportunities to lower their production costs. An important way is by lowering the costs of young plant material. Subsequently, more and more young plant material is imported from countries which offer lower labour and land costs. This survey provides exporters of plants and young plant material with sector-specific market information related to gaining access to The Netherlands. By focusing on a specific country, this survey provides additional information, complementary to the more general information and data provided in the CBI market survey The plants and young plant material market in the EU, which covers the EU in general. That survey also contains an overview and explanation of the selected products dealt with, some general remarks on the statistics used as well as information on other available documents for this sector. It can be downloaded from 1 Market description: consumption and production Demand for young plant material Total demand for young plant material from Netherlands growers is estimated to be the largest in the EU. This estimation is based on data for the production of finished plants in The Netherlands, which is described in the next sub-section. Demand for young plant material is directly related to the production of finished plants; we therefore refer to the sub-section on production for more information. This is particularly the case for products like Dendranthema, and several garden plants. Page 1 of 16

2 Many Dutch growers are specialised in growing tropical pot plants. They often source their young pot plant material via specialised wholesalers who import from young plant growers in developing countries. As the Netherlands production figures of finished plants also indicate, leading tropical foliage plants of which young plant material is imported are, for example, Dracaena, Yucca, Beaucarnea, and Cycas. Data concerning the industrial demand for young plant material is not available. However, more insight into the demand for young plant material can be obtained by looking at the production of finished plants. In The Netherlands, the production of finished plants and cut flowers continues to increase, indicating more demand for young plant material. Furthermore, if the production of specific finished plants increased, then the demand for their young plant material obviously will also have increased. Consumption of finished plants Total market size The market for plants and young plant material in The Netherlands ranks sixth in the EU, amounting to 532 million in 2006, with a per capita consumption of 32. A comparable market in size is Spain, with consumption amounting to 551 million. After some meagre years since 2002, The Netherlands market increased strongly again in 2006, by 24 million. However, the market value is still 20 million lower compared to The decrease in the period in between was partly the result of a decrease in the number of plant purchases per purchasing household, from 7.9 to 7.3 between 2003 and A sign of recovery was already visible in 2005, when the average amount spent on plants per capita increased from to Since 2000, the value of the plant market has always been between 504 million and 552 million, without developing in a clear direction. This indicates saturation of the market. The latest forecast of the Flower Council of Holland is a stable consumption until By 2016, the market value is expected to reach 545 million. Product groups The share of flowering plants in total expenditure on indoor plants in The Netherlands increased from 55% in 2004 to 59% in In The Netherlands, the best known foliage plants are Ficus, Yucca, and Dracaena. This indicates a high level of penetration of these products in the market. Foliage plants such as the Ficus are still very popular. However, due to increasing sales via supermarkets, home decoration and do-it-yourself chains, the market has become saturated. Ever more consumers consider these products to be mainstream products. Phalaenopsis is another popular plant in The Netherlands. Netherlands breeders focus on Phalaenopsis with relatively small flowers, indicating a preference by consumers for small flowers. Note that this could be related to a preference for lower-cost plants. Poinsettia is also an important product for the Netherlands market. As it is mainly purchased for Christmas, it is not surprising that red colours, notably bright red, dominate sales. An example of a product that is receiving renewed interest is Cyclamen. New varieties are being developed with special-coloured leaves and flowers which have frills or flamed fringes. Another trend is the development of Cyclamen varieties which can grow outside in both warmer climates, such as the Mediterranean climate, and in the colder climates of Northern Europe. The Netherlands is also a major market for young plant material, as the demand for this material is directly related to the EU demand for finished plants from The Netherlands. It is cost-efficient to grow young plant material in developing countries, which often have a good climate for this business activity as well. Therefore, much of the production of young plant material destined for Netherlands growers takes place in developing countries. However, note Page 2 of 16

3 that varieties, for which breeder s rights are applicable, are mostly grown by Netherlands breeder s which have production facilities in developing countries. Market segmentation The following market segmentation was identified in the market for finished plants: As in most EU countries, generally more elderly people buy plants than younger people. They care more for plants than younger people, as they often spend more time at home and have more time to take care of their plants. It is more common amongst women to purchase flowers and plants than it is amongst men. 60% of the women purchased flowers or plants in 2005 while only 36% of the men did this. The institutional market is an important market segment for flowers and plants. Institutions account for 26% of the plants market. Commercial service companies and wholesalers were the major buyers in the institutional market segment in In general, institutions have a higher demand for large-sized plants and for plants which require little maintenance. In 2005, the market share of flowering plants was 59% and the market share of foliage plants was 41%. Compared to 2004, the market share of flowering plants increased. The market segment for outdoor plants can be divided further into 6 groups of consumers. A group of garden lovers (21%), proud garden owners (20%), prestigious perfectionists (18%), social people preferring the outdoor life (17%), stubborn garden owners (14%) and garden conformists (10%). Trends in consumption The Netherlands has an aging population. The increasing number of older people has a positive impact on plant sales. This group of people has more time and has relatively large amounts of money to spend, as they no longer need to take care of their children and have paid off their mortgage. The most important reason for Dutch people to buy indoor plants is for personal use. Plants are often used to decorate the home. Notably, foliage plants are considered as improvements to the living environment. Reasons for not buying plants are the necessity to take care of them and the old-fashioned impression given by plants. The market share of plants bought for personal use, increased from 54% in 1992 to 69% in 2006, while the market share of plants bought to give away as presents decreased from 46% in 1992 to 30% in In 2005, companies and institutions spent about 139 million on plants. Until 2003, this market segment had been increasing in size continuously for over 10 years. In 2003, companies and institutions spent 1% less on plants compared to the previous year and in 2004 they spent 16% less on plants. In 2005, the market value increased again by 14%. About two thirds of companies and institutions stated that the major reason for purchasing plants is for cosiness. In the past few years, the percentage of companies and institutions which bought plants decreased slightly, but still stands at about 80%. Flowering plants sustained the largest decrease as they are seen as more time-consuming than foliage plants. There are two contrasting trends visible in the garden segment. On one side, consumers have renewed interest in romance, flowers, sweet colours and refined patterns. On the other side there is also more interest in sharp contrasts, black and white and roughness and toughness. The development of these contrasts is related to the individualisation of the society. There is more room for diverse lifestyles. This has also led to a wider demand for a larger number of different plant varieties. Production Total production The production of plants continued to increase between 2001 and 2005, registering a 26% growth. The value of the plant production amounted to 1,243 million in Approximately 80% of this production consisted of indoor plants. The Netherlands is the largest producer of the European Union, followed by Germany and Italy. Page 3 of 16

4 The area for the production under glass has increased by 40% since 1990, while the number of growers decreased by 31%. This resulted in an increase of company scale from 0.56 hectares to 1.14 hectares for the average grower under glass. Production in the open experienced the same long-term development. Moreover, the increase in production value and the decrease in production area indicate higher efficiencies or higher product prices. There are no indications of significant changes in these positive developments for the plant production in The Netherlands. One more characteristic of production in The Netherlands is the extremely wide assortment of products. Because of the fierce competition in the European market and particularly in The Netherlands, Netherlands growers need to distinguish themselves. Netherlands growers, therefore, supply an abundance of products and varieties, with all kinds of added-value items attached to it. Table 1.1 Netherlands development of area and growers, area and size in ha Under Glass Open Area Area (hectares) No of Average size growers of companies Area* (hectares) No of Average size growers of companies ,261 1, ,369 2, ,283 1, ,221 2, ,272 1, ,517 1, ,313 1, ,471 n.a. n.a ,340 1, ,405 n.a. n.a ,377 1, ,435 n.a. n.a ,385 1, n.a. n.a. n.a. Average annual +1.6% -4.6% +6.4% +0.6% -6.4% +10.0% change * Area for the production of pot plants Source: CBS Landbouwstatistiek (2007) Major varieties grown in The Netherlands are Ficus, Kalanchoe, Dracaena, Begonia, Poinsettia, Phalaenopsis and Pelargonium. The Netherlands is also one of the largest producers of Bromelia and has an important role to play in the production of Poinsettia. The area for the production of the latter is estimated at 160 ha in Table 1.2 Production area under glass by type of plants, in ha, Flowering plants Kalanchoe n.a. Begonia 22 n.a. n.a. Foliage plants Ficus n.a. Dracaena n.a. Source: CBS Landbouwstatistiek (2007) Major Players Examples of leading growers in The Netherlands are: Bunnik Plants: Sjaloom: VDE Plant: Hedera Plant: Nolina: Page 4 of 16

5 Trends More and more Dutch pot plant growers organise themselves in growers associations (in Dutch telersvereniging ). Examples of this kind of growers associations are: Group Unique: FicusForever: Decorum Plants: Comfort-Plant: Furthermore, growers are increasingly active in concept development. In cooperation with large retailers, they try to develop concepts in order to offer more than just plain products and to remain competitive. Another development relating to the more intensive cooperation between growers and retailers is the increasing demand by retailers for packing and delivery on demand. Growers supplying retailers directly are expected to substitute for the links which have been eliminated in the distribution chain. Strong links between growers and retailers facilitate the adjustment of products and services offered by growers to satisfy the high demands of the retailers. Besides, Netherlands growers are increasingly looking for opportunities to lower their production costs. An important way is by lowering the costs of young plant material. Subsequently, more and more young plant material is imported from countries which offer lower labour and land costs (see CBI market survey covering the EU market). Opportunities and threats + After a short period of decreasing plant sales, the Netherlands market for plants is picking up again. This confirms the often-made assumption that plant sales are strongly related to macro economic developments. It is positive news for almost all companies in the plant market. + The increased ratio between plant purchases for personal use and plant purchases as gifts could be interpreted as an upgrading of the market. Plants are no longer purchased for special occasions only. It has become more common to purchase plants for their decorative use and to replace them regularly. - The increasing popularity of flowering plants is a disadvantage for producers in developing countries, who are mainly supplying cuttings and foliage plants such as Yucca and Dracaena. The barriers to the export of flowering plants over large distances are structural. - The expectation that the institutional market, as opposed to the consumer market, will contribute strongly to the positive development of flower purchases, could also prove to be less favourable than might be expected. It could mainly increase the demand for largesized plants, which are very expensive to transport. + Providing packing and delivery on demand enhances opportunities for producers trying to supply directly to retailers. + Young plant material is increasingly imported from countries which have lower labour and land costs. Useful sources Flower Council of Holland: Plant Publicity Holland: International Flower Bulb Centre: Netherlands Horticultural Commodity Board: 2 Trade channels for market entry Trade channels Young plant material In the case of young plant material, The Netherlands takes a major position in the EU. Many European growers purchase seeds, bulbs and cuttings from breeders or importers in The Page 5 of 16

6 Netherlands. The main channels for the distribution of young plant material to the Netherlands market are: Production on behalf of a European breeder/propagator; Supplying via an importer of young plant material; and Supplying directly to a European grower. As the Netherlands young plant industry plays a leading role in Europe, it is described comprehensively in the CBI market survey The cut flowers and foliage market in the EU. Regarding the tropical young plant material (mostly used for indoor plants by European consumers), several Netherlands importers indicated that they import plant material from Central American countries. The main reasons are the low costs and the favourable climate. The importers indicated imports directly from the producers, and they have a long-term relationship with the producers/exporters. One importer indicated to have found the producers via a broker in the exporting country. The cuttings are mostly transported by air to The Netherlands, and part of the products is also re-exported again to other European countries such as Germany. Major players Many leading cut flower breeders and propagators are located in The Netherlands like Deliflor, Fides, Royal van Zanten, Preesman, Florist de Kwakel, Olij Roses, Terra Nigra, just to mention a few. Many pot and garden plant breeders and propagators can also be found in The Netherlands like Corn Bak, Bartels Stek, and Beekenkamp. Leading European importers of tropical pot plant material are also located in The Netherlands, for instance Cees Reemst, Campo, Las Palmas Aalsmeer, Akker Exotic Plants, Van der Arend Exotic Plants, and Gebr. Reym. The most important companies active in plant tissue culture are VCI, SBW International, Vitro Plus, Vitrocom, Avo Anthurium Vogels, Könst Alstroemeria, Succulent Tissue Culture, Iribov, Vitro Westland, Agriom and Green Works Productions. Finished plants There are two main distribution channels for importing finished plants into The Netherlands: the co-operative auctions and the importing wholesalers. Approximately 36% of the export value of products from foreign suppliers is distributed through auctions, while 64% is sold directly to wholesalers. The share of direct trade is increasing. Figure 2.1 Distribution of finished plants in The Netherlands, 2005, in million Page 6 of 16

7 Auctions The Netherlands floricultural trade is based strongly on the auction system. Approximately 80% of the produce of Netherlands and foreign growers passes through the auctions. The two largest auctions (FloraHolland and Flower Auction Aalsmeer, which merged in January 2008 under the name FloraHolland) account for about 96% of the total auction sales of plants. In the case of imports of plants, auctions are less important than for cut flowers. Approximately 36% of plant imports to The Netherlands passes through the auctions. Wholesale level The wholesale trade is being restructured, and a reduction in the number of companies and a concentration of the volume of businesses can be observed. The companies which are making most progress are the exporters in developing countries who work with the supermarkets. Most exporters in developing countries sell their products directly to importing wholesalers. In the case of plants, many importing wholesalers are actually wholesale nurseries (or, in Dutch, handelskwekerijen ). Importing wholesalers, in turn, can sell the imported products also at the auctions or sell them directly to other wholesalers or retailers. There are different types of wholesalers. There are regular wholesalers, exporters, cash-andcarry centres, flying Dutchmen, box traders and agents. Cash-and-carry centres are wholesalers where customers can pick the products up themselves and pay at the counter. Most of these customers are florists. Their main purchasing channels are auctions, agents and growers. The number of cash-and-carry centres decreased in recent years, from approximately 50 in 2002 to 45 in The so-called flying Dutchmen are wholesalers who deliver directly from their truck to retailers all over Europe. They purchase their products mostly from the auction and growers. It is estimated that there are approximately 350 flying Dutchmen. A number of them have organised themselves in a foundation (Stichting Lijnrijdersbelangen: Major players In The Netherlands, a very large number of companies is active in the pot and garden plant business. Every company has its own specialty. Some are focused on supplying the local market, others on exporting to specific countries or sales channels. A number of leading pot and garden plant exporting companies in The Netherlands is listed below: Waterdrinker: Zurel: OZ Planten: Baardse: Profitplant: Trading growers, the handelskwekerijen, also play an important role in The Netherlands plant trade. They buy plants or semi-finished plants, use them as input material for their own production of finished plants and later re-sell them. There are several websites listing exporters, trading growers, importers and breeders. These websites are also the best way of obtaining up-to-date hyperlinks to the companies websites: Page 7 of 16

8 Retail trade For years, garden centres have been the most important sales channel for outdoor and indoor plants, as their assortment is broader and deeper than any other retail channel can provide. In 2005, the market share in plant sales on the consumer market of the approximately 600 garden centres amounted to 48%. Sales of plants are very important for garden centres. The share of sales of indoor plants in total turnover by garden centres is 11%. The share of sales of outdoor plants in their total turnover is 35%. Garden centres particularly tailor to consumers, as their market share in the institutional market is relatively small (only 29% in 2003). The importance of garden centres is somewhat stronger for foliage plants than for flowering plants. Table 2.1 Share of retail channels in The Netherlands, % of total sales, Garden centres Florists Supermarkets Street and markets Others Total Source: Flower Council of Holland (2007) Leading garden centres: Europatuin: Intratuin: Tuincentrum Overvecht: GroenRijk: Ranzijn Tuin & Dier: The number of florists is decreasing and currently amounts to about 3,500. Moreover, the share of plant sales in their turnover is decreasing slightly and amounted to 22% in Florists often supply both the consumer and the institutional market. Consumers account for 74% of turnovers made by the average florist, and institutions for 26%. Large supermarkets are increasing in number, at the expense of smaller supermarkets. In general, the average size of supermarkets is increasing and their share in plant sales is also increasing. Supermarkets do not play an important role for institutional market demand, as they do not sell the plants which institutions demand (large, foliage, little maintenance). 33% of purchases made by institutions is supplied by florists. The other major suppliers to institutions are garden centres (29%). Trends The market share of supermarkets in plant sales is increasing. The success of the one-stopshopping concept in the retail market is a major factor behind this development. It also leads to increases in the number of producers supplying directly to supermarkets. Growers and growers associations increasingly focus on the marketing side of their business. In the European pot plant trade, just growing the best quality products is often not enough to distinguish yourself from other growers and build a profitable business. In order to offer retailers tailor-made products and services, growers like Bunnik Plants ( put a lot of effort into developing new products and marketing concepts. Price structure Different prices and margins apply throughout the various trade channels. Depending on their function in the chain, wholesalers add an estimated 10-25% of their purchasing costs to the Page 8 of 16

9 prices. Retailers add an estimated % of their purchasing costs to the prices for consumers. This percentage is an average of garden centres, supermarkets and florists. The percentages for florists are actually higher, while those of garden centres and supermarkets tend to be lower. The overall auction costs for Netherlands member growers who supply via the auctions is about 5-10%, depending on member status, batch sizes, and so on. The total auction costs for foreign growers who are not a member of the auctions, can vary from 15-20%. Selecting a suitable trade partner Finding a trade partner in The Netherlands should not deviate from the general EU method as described in the CBI market survey covering the EU market. Their preferred mode of looking for new suppliers is through trade fairs, through recommendations or sometimes by visiting the country of interest. The most common ways for developing country exporters to approach Netherlands customers are through direct (e)mail, personal visits as follow up, inviting potential Netherlands customers to visit them, building a network and visiting international trade fairs. After obtaining contacts, evaluating potential trade partners should be done according to criteria such as information quality, geographic coverage, the kind of trade relationship the partner is interested in, the position of the partner and the financial status and credibility. When looking for a partner, the following websites can be of use: Trade: imports and exports Imports Total imports Although the Netherlands consumer market for plants is relatively small, the country plays a leading role in the international trade in plants. It is characterised by a strong production industry, the auction marketing system that brings together both local and international supply, and a strong export trade sector. The Netherlands is currently the third largest importer in the EU, after Germany and France. Between 2002 and 2006, imports into the Netherlands increased by 7% annually, amounting to 307 million / 133 thousand tonnes in the latter year. Domestic consumption and production remained stable in the period reviewed. Thus, the increase in imports was mainly a result of increased demand from other countries. This is confirmed by export figures, which also show growth. Developing countries play a significant role in imports of plants and young plant material by The Netherlands, particularly in the imports of young plant material and, to a lesser extent, in the case of foliage plants. Their share in total imports of finished plants and young plant material was 48% in Supplies from developing countries kept up with those from other countries. The leading developing country suppliers are China, Costa Rica and Kenya. Note that Kenyan exports mainly constituted production of subsidiaries of Netherlands companies. Imports from China and Kenya increased by 17% and 8% annually respectively. In contrast, imports from Costa Rica decreased by 5% annually. Costa Rica lost much of its import share for unrooted cuttings. This was partly due to the fact that nowadays, quite a lot of cuttings are exported as rooted cuttings. Page 9 of 16

10 Imports by product group In the period reviewed, imports of all three major product groups experienced growth. The imports of cuttings are relatively more important in The Netherlands than in other EU member countries, accounting for more than half of total imports in Table 2.1 Leading suppliers of plants and young plant material to The Netherlands (share in imported value, 2006) Product 2002 mln 2004 mln 2006 mln Leading suppliers in 2006 (share in %) Share in Netherlands imports Plants and Intra-EU: Germany (17%), Belgium 46% young plant (13%), Denmark (5%) material Extra-EU Israel (3%), Taiwan (2%) 6% China (11%), Costa Rica (8%), 48% Kenya (5%), Uganda (3%), Guatemala (3%), Tanzania (3%), South-Africa (2%), Brazil (2%), Thailand (2%), Honduras (2%) Young plant material Total young Intra-EU: Germany (9%), Belgium (4%), 19% plant material Italy (2%) Extra-EU Israel (5%), Taiwan (4%) 10% Costa Rica (14%), China 71% (12%), Kenya (9%), Uganda (6%), Tanzania (5%), Brazil (4%), South Africa (4%), Guatemala (3%), Thailand (3%), Honduras (2%) Unrooted Intra-EU: Spain (2%), Belgium (1%), 5% cuttings Denmark (1%) Extra-EU Israel (6%), Taiwan (1%), 8% South Korea (1%) Kenya (19%), China (18%), 87% Uganda (13%), Tanzania (9%), Brazil (8%), South-Africa (5%), Costa Rica (5%) Rooted cuttings Intra-EU: Germany (17%), Belgium (8%), Italy (4%) 36% Bulbs, tubers, tuberous roots, corms, crowns and rhizomes, in growth or in flower Extra-EU Israel (4%), Taiwan (1%), Bulgaria (1%) Costa Rica (27%), Guatemala (7%), Honduras (5%), Macedonia (3%), China (3%), Sri Lanka (3%), South Africa (2%), India (2%) 58% Intra-EU: Germany (13%), United 16% Kingdom (3%) Extra-EU Taiwan (30%, Japan (1%) 32% Thailand (29%), China (21%) 52% 6% Page 10 of 16

11 Product 2002 mln 2004 mln 2006 mln Leading suppliers in 2006 (share in %) Share in Netherlands imports Finished outdoor plants Total outdoor Intra-EU: Germany (34%), Belgium 78% plants (19%), Italy (11%) Extra-EU Hong Kong (1%) 2% Kenya (7%), China (6%), 20% South Africa (6%) Rhododendron Intra-EU: Belgium (55%), Germany 100% and Azalea, 2.6 (37%), Italy (7%) grafted or not Extra-EU 0% % Roses, grafted Intra-EU: Poland (26%), Bulgaria (6%), 46% or not Hungary (4%) Extra-EU 0% South Africa (25%), China 54% (24%), Kenya (4%), Serbia (1%) Other outdoor Intra-EU: Germany (44%), Belgium 89% plants (24%), Italy (15%) Extra-EU Hong Kong (1%) 1% Kenya (8%) 10% Finished indoor plants Total indoor Intra-EU: Germany (26%), Belgium 77% plants (25%), Denmark (11%) Extra-EU USA (1%) 2% China (10%), Guatemala (3%), 21% Honduras (2%), Costa Rica (2%), Malaysia (1%), Thailand (1%), El Salvador (1%) Flowering Intra-EU: Germany (39%), Belgium 98% plants (27%), Denmark (18%), Italy (11%) Extra-EU Israel (1%) 1% China (1%), Turkey (1%) 1% Foliage plants Intra-EU: Belgium (25%), Germany 75% (25%), Denmark (10%), Spain (7%) Extra-EU USA (1%) 2% China (11%), Guatemala (4%), 23% Honduras (2%), Costa Rica (2%), Malaysia (2%), Thailand (1%), El Salvador (1%) Source: Eurostat (2007) *DCs: Developing countries Page 11 of 16

12 Young plant material The Netherlands is by far the largest importer of young plant material in the EU, accounting for 31% of total imports. Between 2002 and 2006, imports of this product group increased by 8% annually. Increased demand for plants and consequently for young plant material, combined with a general shift of production to low-cost production countries, drove the increase in imports. Note that a significant number of Netherlands breeders account for a large part of the shift of production. There are many Netherlands breeders which have propagation facilities in developing countries and there are also Netherlands breeders which are working closely together with local companies. A considerable part of the exports of young plant material from developing countries thus consists of exports from subsidiaries of Netherlands companies. In particular, this applies to unrooted cuttings from African countries like Kenya, Uganda and Ethiopia. Also note that some young plant material imports to The Netherlands are re-exported to other major production countries such as Belgium, Germany and Denmark. Nevertheless, most of the young plant material imported from developing countries is used by Netherlands nurseries to grow finished plants. Young plant material can be divided into rooted cuttings, unrooted cuttings and bulbs. The imports of rooted and unrooted cuttings account for 91% of imports of young plant material. However, imports of bulbs are also becoming of great importance. Between 2002 and 2006, bulbs imports increased by 41% annually. Developing countries play a major role in imports of unrooted cuttings, rooted cuttings as well as bulbs, accounting for 71% of total young plant material imports. The leading developing country suppliers are Costa Rica, China and Kenya. Costa Rica was an important supplier of both rooted and unrooted cuttings. Currently it is only a leading supplier of rooted cuttings as the country lost much of its share in imports for unrooted cuttings between 2002 and Its position in the trade with The Netherlands of rooted cuttings is stronger. Although the second largest supplier, Germany, increased its supplies of rooted cuttings by 32% annually between 2002 and 2006, Costa Rica managed to increase its supplies by 3% as well. In contrast, Kenya is a leading supplier of unrooted cuttings, while its role in imports of rooted cuttings is diminishing. China is of great importance for imports of both unrooted cuttings and bulbs. Its supplies of the latter increased very fast in recent years (518% annually). Finished outdoor plants The Netherlands is the seventh largest importer of finished outdoor plants. Imports of outdoor plants did not increase in the period The relatively low importance of The Netherlands in the trade of finished outdoor plants is related to strong domestic production. Nevertheless, imports of roses (grafted or not) from developing countries increased considerably, while imports from other EU countries decreased. The leading developing country exporters of finished outdoor plants are Kenya, China and South Africa. All three countries performed very well between 2002 and Kenya reported a growth rate of 34% annually, China 119% annually and South Africa 21% annually. At the same time, imports by The Netherlands from other EU countries decreased, making the increase in imports from developing countries particularly positive. Finished indoor plants The Netherlands is the fourth largest importer of finished indoor plants. Between 2002 and 2006, imports of finished indoor plants increased by 6% annually. This growth rate is higher than in other leading markets and is strongly related to the good performance of The Netherlands in international trade in indoor plants, which is also confirmed by increases in exports. A considerable part of the imported plants is re-exported directly or finished first and then re-exported by handelskwekerijen. The share of developing countries in imports of finished plants is much larger than in other countries (20%). Nevertheless, intra-eu trade continues to dominate in these product groups. Page 12 of 16

13 EU production profits from the relatively short distances to the market. Container transport by sea for flowers and plants is being developed. However, the time needed for the transport significantly shortens the time in which the final consumers will be able to enjoy the plants. Moreover, transport will remain relatively expensive. The leading developing country supplier of indoor plants is China, followed at a distance by Guatemala, Honduras, Costa Rica and Malaysia. Between 2002 and 2006, China also increased its supplies by 7% annually, while supplies by Honduras and Costa Rica decreased and supplies by Guatemala and Malaysia remained relatively stable. Nearly all of the supplies from these countries consist of foliage plants. Only China has significant exports of flowering plants to The Netherlands. Exports In 2006, The Netherlands was, by far, the leading exporter of plants and young plant material, accounting for 58% of the total exported value by EU member countries. The total value of exports amounted to 1,678 million and the volume to 727 thousand tonnes. This was realised by 1,012 exporters registered at the HBAG, the Netherlands Agricultural Wholesale Board. Around 20 of these exporters account for nearly 50% of total exports. Netherlands exports of plants and young plant material showed more or less the same pattern as that of the EU, although The Netherlands' main exported product was finished indoor foliage plants. Exports of this product group accounted for 65% of total exports. Between 2002 and 2006, exports increased by 4% annually. In absolute terms, most of this growth was accounted for by exports of indoor plants. However, in relative terms, exports of young plant material and outdoor plants increased at higher rates. The leading export destination is Germany, followed at a distance by France and the UK. Opportunities and threats + The Netherlands is one of the leading importers in the EU. It has a leading role in international trade thanks to the presence of the auctions, large exporting wholesalers and service companies to support these. The concentration of plant businesses attracts buyers from all over the EU. Therefore, importers in The Netherlands offer many opportunities for developing country suppliers to export their products to the larger market of the EU as a whole, particularly to Germany, Belgium and Denmark. - As the plant business in The Netherlands is well-developed, the domestic market has also become very competitive. There are many players active on this market and they all compete for market share. Importers mainly look for products which can not be grown locally and thus broaden or deepen their assortment. Products which are grown locally are often cheaper and of better quality than imports. + Production of young plant material is shifting to low-cost countries and, consequently, imports of young plant material from these countries are increasing. Transport costs for young plant material, particularly for unrooted cuttings and bulbs, are relatively low in contrast to transport costs for finished plants. In other words, the major barrier to exporting plants over large distances is of much less importance for the export of young plant material. Currently, a large part of the imports of young plant material from developing countries is accounted for by EU companies in those countries. However, good opportunities also exist for local companies. + Trade in finished plants in The Netherlands is focused on indoor plants. Imports of these plants are increasing and developing countries have a significant role to play in this trade. Useful sources EU Expanding Exports Helpdesk - Go to: trade statistics. Eurostat official statistical office of the EU - Go to: themes on the left side of the home page - external trade - data full view - external trade - detailed data. Page 13 of 16

14 4 Price developments As described before, a large share of the Netherlands plant trade passes through the auctions. These prices therefore are the best source for gaining insight into price developments. The prices are presented in Table 5.1 of the CBI market survey The plants and young plant material market in the EU. Furthermore, the Federation of Dutch Flower Auctions (VBN) publishes sales statistics for the Netherlands auctions. The VBN statistical yearbook contains records of average prices paid for the products auctioned during the 3 most recent years. Be aware that prices are averages for all sizes and qualities. The prices should be seen only as indicative for the products traded in Europe and are an average of the different sizes traded. Besides, some European organisations publish prices of finished plants on a regular basis. ITC in Geneva collects prices at the wholesale level on Netherlands and other EU markets and publishes a weekly bulletin. Finally, the International Association of Horticultural Producers (AIPH) publishes information on prices and trends of plants in their statistical yearbook. Federation of Dutch Flower Auctions (VBN): ITC Market News Service (MNS): International Association of Horticultural Producers: 5 Market access requirements As a grower in a developing country preparing to access The Netherlands, you should be aware of the market access requirements of your trading partners and the Dutch government. Requirements are demanded through legislation and through labels, codes and management systems. These requirements are based on environmental, consumer health and safety and social concerns. You need to comply with EU legislation and have to be aware of the additional non-legislative requirements that your trading partners in the EU might request. For information on legislative and non-legislative requirements, go to Search CBI database at select the market for plants and young plant material and The Netherlands in the category search, click on the search button and click on market access requirements. Packaging can serve two functions. First, it protects plants from damage during transport. Second, consumer packaging can improve presentation of a product. However, consumer packaging rarely takes place in supplying countries as it often increases volume and, subsequently, transport costs. Packaging specifications should always be set in consultation with the buyer. Different packaging materials are used for plants, depending on the type of product and the function of protection and influence over the micro climate required. Packaging can be divided into sleeves and wraps in paper or plastic materials, and external packaging in boxes, up to the sealed pallet. Cuttings and other young plant material are usually transported wrapped in paper and put in boxes. Canes are also transported in crates. Big-sized plants, like palms for the interior landscaping market, are wrapped in plastic sleeves when transported to Europe. As of March 1, 2005 a further amendment was made regarding new phytosanitary measures for all wooden packaging material used in the import of goods into the EU from third countries. The Directives 2004/102/EC and 2005/15/EC require heat treatment or fumigation and marking of wooden packaging materials. As of March 1st 2006, the additional requirement Page 14 of 16

15 applies that round-wood packaging material shall be made from round wood from which the bark has been removed. Additional information on packaging can be found at the website of ITC on export packaging: Information on tariffs and quota can be found at 6 Business practices General information on doing business like approaching potential business partners, building up a relationship, drawing up an offer, handling the contract (methods of payment, and terms of delivery) can be found in CBI s export manuals Export Planner and Your image builder. Furthermore, cultural awareness is a critical skill in securing success as an exporter. Information on cultural differences in the EU can be found in chapter 3 of CBI s export manual Exporting to the EU. These manuals can be downloaded from - go to search publications. Sales promotion Common practices of trade promotion should not differ substantially from other European countries. In general, good care should be taken of existing contacts, by using prompt, constant and reliable communication. Letters of inquiry should always be replied to. An essential tool used in sales is a detailed and up-to-date customer database. Visiting and participating in a trade fair can be an efficient tool for communicating with prospective customers or even trading. It can also be an important source of information on market developments, production techniques and interesting plant varieties. Assistance with market entry can also be sought through local business support organisations, import promotion organisations such as CBI and branch organisations focusing on the horticultural sector. Useful sources Trade associations Association of Dutch auctions (VBN): Association of Dutch Wholesalers in floricultural products (VGB): Trade fair organisers International Horti Fair: Plantarium: Trade press All trade press mentioned below is written in the Dutch language. Agrarisch Dagblad (Magazine giving agricultural information): Bloem en Blad (Magazine for professionals in the flowers and plants sector): BloembollenVisie (Magazine for people active in the bulbs and plants sector): Bloemen en Planten (Magazine for gardeners): Bloemenkrant (Newspaper for professionals in the flower and plants sector): Bollen nieuws (Website with scientific information regarding plants): Page 15 of 16

16 Groot Handelsblad (Magazine for traders in plants): Nieuwe Oogst (Magazine for agricultural producers): Tuin & Landschap (Magazine for professional gardeners): Vakblad voor de Bloemisterij (Magazine for professionals in the flowers and plants sector): This survey was compiled for CBI by ProFound - Advisers In Development in collaboration with Milco Rikken of ProVerde. Disclaimer CBI market information tools: Page 16 of 16