The market for tropical and exotic fruits in the European Union Gustavo Ferro ProFound – 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, project facilitation, 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

EU-27 Gross per capita fruit consumption in kg / year, 2010 European Union – fruit consumption Freshfel Europe, Cyprus 2 Italy 3 Romania 4 Portugal 5 Greece Largest per capita consumers

European Union – fruit production EU fruit production 2011, in mln. tonnes FAOSTAT,

European Union – tropical fruit profile Consumption Germany United Kingdom Italy Spain France Imports Belgium Germany United Kingdom Italy The Netherlands Main suppliers Costa Rica Ecuador Colombia Dominican Republic Peru

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 mei golden kiwi

Exotic fruit markets in the EU – market profiles

Largest EU importers of exotic fruits, in 1,000 tonnes % of Colombian supplies DIRECT IMPORTS Potential competitors… Madagascar 30% of EU supplies tamarinds, lychees Vietnam 5% of EU supplies pitahaya (decorative) Kenya Low-cost passion fruit Malaysia, Thailand pitahaya, carambola Trade statistics – reflecting market profiles Largest importer and 2nd largest supplier: re-exports!

ProductOriginDestination Average price in May 2012 GranadillaColombiaNetherlands9.09 Denmark10.83 Passion fruitColombiaNetherlands6.50 KenyaNetherlands5.75 ColombiaGermany4.38 IsraelFrance6.50 ColombiaFrance6.50 PhysalisColombiaNetherlands7.88 ColombiaGermany5.11 PitahayaColombiaNetherlands9.67 VietnamNetherlands5.65 ColombiaFrance9.00 VietnamFrance9.00 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 or independent Retail channels or Food service Major retailers vs. specialised Vertical integration; tightening of requirements Intermediary Importer, Agent Agents 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 fruits Travelling / Store promotions Cooking shows / Internet (websites, blogs) / Youtube culinary channels Other media EU market trends – exotic fruits

Healthy living – fruits containing healthy components (antioxidants, dense nutrients) Superfruits introduced in small amounts, as ingredients for the food industry (juices, smoothies); slowly making it to supermarket displays in fresh form. Less processing trend Sustainability Consumer awareness: environment + social Origin Traceability Certification EU market trends – exotic fruits

Food miles; Buying local (e.g. Streekmolen)Streekmolen Related story: Soil Association (UK) caseSoil 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 readingFurther reading No GMOs! Novel Food – Further readingFurther reading