The EU market for fresh pineapples. Summary of the market study developed for West African exporters compiled for CBI by

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1 The EU market for fresh pineapples Summary of the market study developed for West African exporters compiled for CBI by

2 Contents 1. Promising EU export markets 2. Trade channels and market segments 3. Product characteristics 4. Product marketing 5. Buyer requirements 6. Terms of delivery 7. Client services 8. Product competitiveness 2

3 1. Promising EU export markets - Consumption Since 2000, EU fresh pineapple consumption tripled to 801,000 tonnes. Because of popularity MD-2 Five largest EU countries accounted for 80%. Per capita average 1.8 kg (2012). Higher in UK and Southern EU. Between 2008 and 2012 o Growth was high in UK (multicultural population). o Growth in Italy continued (eating fruit remains habit). o German consumption will slow down due to popularity of other tropical fruit. 3

4 1. Promising EU export markets - Production 70% of world production is consumed locally. Costa Rica only 13%. Nigeria 9% of production. Nigeria, Kenya, Angola main African producers. Cote d Ivoire, Ghana, Benin main exporters to EU. African production of pineapples (in 1,000 tonnes) Growth Total 3,174 3, % Nigeria 1,487 1, % Kenya % Angola % Cameroon % Guinea % South Africa % Rwanda % Cote d Ivoire % Madagascar % Ghana % Mozambique % Tanzania % Swaziland % Benin % Reunion % Centr. African Rep % Mauritius % Other (8) % 4

5 1. Promising EU export markets EU imports EU imports 1,341,000 tonnes in Until 2000, Cote d Ivoire dominated exports. Due to difficulties switch from Smooth Cayenne to MD-2, and political problems exports were down. Costa Rica took up 84% of Extra EU supplies. Mainly MD-2. Netherlands biggest Intra-EU supplier and mainly imports from Costa Rica. Ghana, Cote d Ivoire and Cameroon are direct 2 nd or 3 rd suppliers to Belgium, France, Italy, UK (incl. organic) Av. values of fresh pineapple imports lower in Cost Rica. 5

6 1. Most promising EU export markets Decrease in imports in large EU markets. But growth in Netherlands and France. France imported 28% from West Africa. Less re-exports go via Belgium which still imports 16% from West Africa. Spain imported less because of recession In future, they import more from Portugal, Costa Rica, Ecuador and Panama. Import growth (in 1,000 tonnes) The Netherlands Growth % Share West African countries 2% of supplies Belgium % 16% of supplies Germany % 0.4% of supplies United Kingdom % 3% of supplies Italy % 2% of supplies Spain % 1.5% of supplies France % 28% of supplies UK. Despite decreasing imports, the UK is most promising. Trend towards higher value (organic) pineapples. Ghana might have more competition from South Africa and Eastern African countries (Kenya, Rwanda). Scandinavian countries imported more pineapples in The per capita consumption is high in Denmark (2.2 kg). Good prospects for Eastern EU countries and Russia (via Lithuania). 6

7 2. Trade channels and market segments - Sea 90% of fresh pineapples supplies are sea freight Developing Country Smallholders/Out-growers often linked to exporters or to agro-multinationals. Large exporters fully control pack-houses, logistic and supply direct to supermarkets. European market Del Monte largest importer, followed by Banacol, Dole- Compagnie Fruitiere, Univeg and Chiquita. Other importers High volume importers and retailers (Super/Hyper) aim constant availability (weekly). 7

8 2. Trade channels and market segments Differences EU countries In UK Multiples (supermarkets) are strong in retail sales of fruit (77%). Share of grocery retailers is small and decreased to 9.7% in But online sales of fruit rose steady. Supermarket also dominate in Scandinavia. Organized in groups. In France, hypermarkets (36%) and small grocery retailers (27%) are important. In Germany 48% of fresh fruit sold at discounters. Small grocery still 21%. Green grocers still most important in Italy, Spain and Eastern EU. Evening shops and street markets also have a fair share. s Retail distribution share in the UK, % volume of all fruit and vegetables sales Outlet type Grocery retailers 96.0% 95.1% Multiples (Tesco, Wal-Mart/ASDA, Sainsbury) 77.2% 77.0% Hypermarkets 1.0% 0.9% Discounters 6.2% 7.5% Smaller grocery retailers of which: o Greengrocers o Convenience stores o Other (street markets, exotic fruit, food/drink, ethnic, organic shops ) 11.3% 3.9% 3.0% 4.4% 9.7% 3.4% 2.8% 3.5% Non-store retailing 4.0% 4.9% Vending, direct selling 0.4% 0.5% Online sellers 3.3% 4.1% Home shopping 0.3% 0.3% TOTAL 100% 100% 8

9 2. Trade channels and market segments - Air 10% of fresh pineapples supplies are air freight Developing Country Similar as in sea freight. Pineapples are harvested ripe and sold quickly by importer. European market 90% goes via wholesalers who sell to e.g. greengrocers, exotic fruit specialists, ethnic shops, organic shops. Fairly limited or regular small volumes. Excellent quality pineapples to high-class restaurants. 70% of air freight is Smooth Cayenne. Other varieties are Victoria and Sugarloaf. 9

10 2. Trade channels and market segments Trends/Opportunities Considerations for action Obesity is still growing. Eating Take advantage of health campaigns fruit recognized by older people. to older and middle-aged people. Supermarkets stimulate this by Sell year-round Smooth Cayenne or offering more variety. Victoria to supermarkets. Consumers prefer chilled fresh Sell chunks to convenience, evening pineapple chunks (convenience). shops, kiosks (on-the-go consumers). Pre-cut pineapples in vending Sell pre-cut pineapples with institutional machines (schools, hospitals). specialists, or food- service specialists. Use of new pineapple varieties Offer new taste sensations, also MD-2 in exotic meals, salads, desserts as quality from Costa Rica decreased. (Creative cooking trend). Their MD-2 with taste more expensive. Continued interest in organic Capitalize on existing production pineapples giving a better taste methods but according to standards. More sustainability in fruit. Be transparent, emphasize close to EU. 10

11 3. Product characteristics varieties in EU Smooth Cayenne Until mid-1990s primarily used for fresh pineapple trade. Produced in West and Central Africa. Orange/yellow colour and mixed acid/sugar taste. Suitable for canning and sufficient fibres for slices/cubes. Because of its thin skin (vulnerability) exported by air. MD-2 Developed in Hawaii and introduced by Del Monte. Produced in Costa Rica, Ecuador, Panama, Honduras and increasingly in other countries, incl. West African. Its thicker skin makes MD-2 more suited for sea freight. Longer postharvest shelf life. De-greening process is needed for MD-2 from Africa. Mass production, less taste and different growing processes in the world lowered the quality image of MD-2 11

12 3. Product characteristics varieties in EU Sugarloaf Victoria Mainly exported from West Africa (Ghana, Benin, Togo). This new variety was first exported to France. Exports to the EU for 5-6 years and therefore they are less known. They are easy recognizable by its bottle shape. They are entirely edible, the core is soft and crunchy. Consumers unfamiliar with its white coloured flesh. Baby-pineapple and regarded as small exotics. Produced in Mauritius, Reunion and South Africa. They are entirely edible and have a bold, rich, sweet taste. Victoria pineapples stimulate a person s digestion. Only available by air-freight and needs careful handling. Mainly sold at small grocery retailers and increasingly at supermarkets during peak seasons (Christmas). Perfect for an individual serving, or as an exotic gift. 12

13 4. Product marketing Talking with buyers Communication to buyers Sales promotion mainly in local language. Packaging English or French. German language in Germany Most buyers are focused on efficiency and results. Conversations are fact-based. Buyers from supermarkets often work with a group of preferred suppliers. When meeting their quality norms and the main (EU) regulations, you could be part of their group. Main answers to prepare: What varieties are grown? Are you GlobalGap certified? Other certifications? Peak seasons in your production? Production volumes? Forecast growth in the coming years? Ratio export and local market? Potential volumes on weekly basis How do you work with growers? (how many, farming contracts) Airline and sea freight companies Production cost, selling price and minimum price? 13

14 4. Product marketing - Events Trade shows Fruit Logistica in Berlin, Germany 4 6 February, 2015 Fruit Attraction in Madrid, Spain, October, 2015 Sial Fair in Paris, France October, 2015 Biofach in Nürnberg, Germany February, 2015 World Food Fair in Moscow, Russia, October, 2015 B-to-B market places Foods for Trade - leading B2B marketplace. Create your company profile and search for trade partners. The Food World Database of companies. Select pineapples which gives you a list of companies in this sector. Organic-Bio Database with organic and Fair-trade companies worldwide. Trade press and useful sites FreshFel Europe, Eurofruit magazine and Int l Tropcial Fruit Network 14

15 4. Product marketing Consumer promotion Your role in promotion by your trade partners Promotion campaigns done by supermarket and importer. You can collaborate by bringing in stories, photo s, product information sheets, or discuss promotional packaging. You can send newsletters to buyers showing your transparency. When selling to wholesalers, discuss a common origin brand. Consumers are not aware of varieties with stronger taste from Ghana or Benin. Your own promotion tools Create a website of a good quality showing your product range, production process, competitive advantages and customers. Create a folder/flyer which can be downloaded from your site. Social media sites (Linkedin, Facebook etc..) help to gain familiarity. Video sharing databases (Youtube) showing your company and story. 15

16 5. Buyer requirements - Legislative Phytosanitary Certificate double check at the port of arrival. General Food Law (Regulation (EC) 178/2006) prohibits unsafe food to EU market and defines the traceability. Hygiene of foodstuffs (Regulations (EC) 852/2004; 853/2004; 854/2004) being based on the HACCP principles. Restriction of pesticides and contaminants in EU food: o Maximum residue levels (MRLs) in foodstuffs (Regulation (EC) 396/2005) that limits the level of pesticides in all food, including pineapples. o Contaminants in food (Regulation (EC) 1881/2006). o Microbial contamination of foodstuffs (Regulation (EC) 2073/2005). The Codex quality standard for pineapples, which is considered to be a world standard. 16

17 5. Buyer requirements Non legislative GlobalGap most important to enter the EU. Additional safety standards and certificates (hygiene protocols) o o o o HACCP certificate BRC British Retail Consortium. Safety and quality standard for the UK. SQF Safe Quality Food program. Standard on the EU mainland. IFS and GFSI specifically for German and UK food retailers. Social requirements o BSCI (Business Social Compliance Initiative) on no discrimination, fair wages, o o o no child labour, protection of the environment, ethical business behaviour. ETI (Ethical Trading Initiative) improving life of poor and vulnerable workers. Rainforest Alliance conserve the bio diversity and ensure sustainable livelihoods. Other social standards such as ILO, Fair Trade and Fair for Life. Organic requirements o For organic pineapples, you will have to follow certain production methods that are laid down in EU legislation (EC) 834/2007 and (EC) 889/2008). 17

18 5. Buyer requirements - Packaging Boxes or trays are made of quality cardboard. They contain 4 to 14 pineapples depending on variety. Each box has one layer to minimize damage. Complaints about packaging Cases of badly packed pineapples from Ghana or Benin were reported by EU importers. They expect good quality boxes, especially if West African pineapples are higher in price. Good packaging is vital for visual impact for buyers and there is less risk of damaging. Discuss with trade partner to use his boxes to be sent to you. Minimum requirement on boxes: your name/address, name of product, variety, origin, class/grade, size in weight. Lace collars become more usual in supermarkets. The collars are attached on the crown of each pineapple. 18

19 6. Terms of delivery Buyers have interest in back-up suppliers Opportunity Reduction of reliance on Costa Rica Opportunity Buyer want more transparency in value chain. Typical lead time sea freight from West Africa to Europe days. Air freight generally direct flights. 1-3 trucking days from Rotterdam or Antwerp to any city in Europe. FOB or CFR most common Incoterms Importers often work on consignment basis with a minimum guarantee. Peak seasons: Christmas, Easter and June September (summer). Do s Present yourself as a back-up supplier for MD-2. Provide buyers the necessary information, write down how operations were carried out. Have frequent contact with buyers Try to improve your cold chain conditions to maintain quality and increase shelf life. Double check with forwarder the routing and their understanding of your variety. Get familiar with new techniques (chips on pallets for track & trace). Dont s Don t agree on quantities you cannot supply Don t take unnecessary risks e.g. over packing or too tight schedule. Don t throw away damaged crop 19

20 7. Client services Be punctual, practical and prepared to unforeseen situations. Struggle between the faster way of doing business in EU and problems in communication, infrastructure.. Knowledge of business culture which is different in each EU country. Staying connected and get information from your network. Export services include instructions given to packers and road, railways, sea carriers and take care of related correspondence. EU importers have a negative image of West African countries and are cautious and suspicious. 20 Do s Pay attention to punctuality and establish preventive measures (back up team). Prepare your export organisation (English or French speaking staff) and customer service staff. Check your infrastructure. For business culture in each EU country check the site kwintessential. Check what is going on via your BSO or via discussion groups on e.g. Linkedin. Stay in control of delivery and documents. Create a dialogue to take away suspicion. Dont s Don t be too late at appointments. Don t sell pineapples to a buyer, while you already sold this to another buyer. Don t bypass importers/wholesalers.

21 8. Product competitiveness Latin America Costa Rica dominates pineapples supplies to EU. Big pineapples farms were set up in Costa Rica with financial resources. Investments in technology, packing, logistics, research and intensive promotion. 1,300 producers in 2012, of which 10% were medium-large sized. Pioneer Del Monte was followed by Dole, Chiquita and Fyffes Also large-scale farming in Panama, Honduras, Ecuador. 21

22 8. Product competitiveness West Africa Four West African countries supplied 73,000 tonnes to EU. (8.3% of Extra-EU supplies) Ghana is largest WA exporter exporting to more than six EU countries. Other WA countries mainly export to France and Belgium. Historic relation with the EU, which started with exports from Cote d Ivoire to France. Plantations were owned by Compagnie Fruitiere who reduced their operations. (political instability, drought competition MD-2 by Dole). 22

23 8. Product competitiveness Comparative analysis Pineapples Latin America West Africa dd Product Strength Consistent quality through Control Programmes weakness MD-2 still most popular but decreasing (taste). All varieties have a good taste. Lack of consistency with different quality fruit/box. Export markets strength Mainly via the Netherlands, and more direct to UK, Spain, Italy. weakness Direct exports to EU still low. Costa Rica supplies to Germany were down. Proximity to the EU and the history. More direct supplies to UK, France and Italy. Still most exports indirect and low presence in Scandinavia and Eastern EU. Buyer requirements strength Compliance by most companies. weakness Some issues on bad labour conditions on a few farms. Potential to comply with organic & Fair Trade standards Exporters struggle with strict EU requirements. Packaging to improve. Price level Delivery strength Reasonable fixed price (economies of scale). weakness Bad weather conditions can drive up prices. strength Most exporters can meet delivery schedules weakness Delivery in large volumes only. Sea freight days Competitive prices for air freight pineapples. High prices due to intensive labour and careful handling. Smaller volumes possible. Sea freight days, Air freight direct flights. Delays in delivery. Cold chain problems Sales network strength Collaboration with importers. Ability to sell to supermarkets. weakness Except UK, Italy and Spain most exports via the Netherlands. Ability to sell via smaller importers and wholesalers. Exports via NL and Belgium. Limited diversification. Organisation strength Work with tight schedules. Cooperation in value chain. weakness Less flexibility in doing business More flexibility in doing business. Complex with middlemen and not transparent. 23

24 8. Competitiveness Considerations for action MD-2 Take your benefit during promotional operations by the large companies and offer also MD-2 to supermarkets with yours having a better taste than the Costa Rican. Focus on niches e.g. organic market for MD-2. Large companies are less active. Reposition to the higher end of the MD-2 market. Maintain consistency in quality! Smooth Cayenne Being closer to the EU, you are able to supply small quantities regularly Focus on niches such as organic Smooth Cayenne and pre-packed chunks/slices sold at exotic fruit shops, convenience stores, evening shops or vending machines. Improve packaging in cooperation with buyers to avoid damaging during transport. Victoria Do more research (technical, crop management) on this variety. If the quality of Victoria is good, you will have a competitive advantage by being closer to the EU Sugarloaf Do more (joint) promotion to e.g. exotic fruit shops as it is still unknown. 24

25 Thank you Any questions 25