Undestanding Channels & Approaching Buyers


Market Channels - Fresh

The two key segments in the FFV sector are the retail (supermarkets, specialized stores & street markets) and the food service sector, (restaurants, hotels and catering).

The European retail market for fresh fruit and vegetables is dominated by the supermarkets. About 60-90% of produce is sold through supermarkets, depending on the product and country. Some large supermarkets have special service providers who – together with importers and local producers – attend to the smooth delivery and sourcing of good quality products. Niche products are often traded by specialised traders. It is important for Vietnamese exporters differentiate and select importers that fit their supply.

Importers and wholesalers resell to retailers or often times re-export to other countries. They take care of the necessary administrative formalities and often provide services such as (re-)packaging, ripening, transportation and logistics. Most sorting and washing is done in the exporting country, but for some products like papaya and mango ripening is done in the destination country. These importing wholesalers provide your best access to the European markets, as they have an extended network of customers, varying from retail buying centres, domestic wholesalers to food service companies. Importers usually have longstanding relationships with customers and excellent knowledge of quality requirements, logistics and the formal administrative processes. Some wholesalers use agents to facilitate transactions.

After importing into the EU or EFTA market, some produce needs to be repacked in retail size packaging. Wholesalers and specialised companies perform this task if required by the wholesalers.

The specialised importer is the preferred channel for market entry in this sector.

Many importers are also packers, and in addition conduct trading and wholesale activities.

In some cases, developing country exporters can also supply the different segments directly, especially to companies which use frozen fruit and vegetables as ingredients for final products.

Importers are not ready to do business with everyone and as they invest a significant amount of time and effort into smooth collaboration with their suppliers, they are not very prone to switching suppliers. As such they are not always so easily approachable, if you lack contacts in the market, agents are appropriate option as they are usually in contact with potential buyers. Agents may also work independently or act as contacts between your company and your buyers.

Sometimes, agents will also work for European buyers seeking to buy directly from suppliers in Developing Countries. Agents can also provide expertise on specific issues, such as requirements for accessing the European market.

The commission of agents is generally between 2-3%

An agent does not buy the product, so this leaves you with the full financial risk. At the same time your margin decreases, because an agent works on the basis of commission. However, you save on your own marketing costs and pay only in the event of success.

THE RETAIL SECTOR

For FFV the retail sector is in three forms – (1) supermarkets/hypermarkets, (2) specialist stores and (3) street markets. Supermarkets/hypermarkets are by far the main channel, around 60-90% depending on the country. The market share of supermarkets tends to be higher in Northwest Europe than in Southern Europe. Traditional fresh fruit and vegetable stores and street markets have seen their market shares decrease to about 10% in

most countries. The dominance of the major supermarkets and centralised buying has increased supermarkets’ power within the market and product requirements throughout Europe.

Hypermarkets/Supermarkets

The retail segment in Europe is dominated by a small number of large retail groups that own several supermarket chains. These retail groups have concentrated buyer organizations. It is estimated that Europe has approximately 600 different supermarket chains. Retailers such as Rewe in Germany operate different brands with different consumer target groups: Billa, BIPA, Merkur, and Penny. Other examples of large European food retailers are:

Carrefour (hypermarket/supermarket based in France, > €100 billion turnover)

Metro AG (Germany, > €100 billion turnover)

Tesco (UK, ~€100 billion turnover)

Schwarz Group and Aldi GMBH (discount supermarkets, Germany)

Koninklijke Ahold N.V. (supermarket, the Netherlands).

For a detailed picture on the super/hyper market sector in European countries, USDA conducts very detailed reports on the Food Retail Sector. You can download the reports in the Useful Sources and Guides Section of the Vietnam Export Window to Europe Website. The EU MUTRAP project also recently conducted a detailed study on the topic, downloadable from the same Useful Sources and Guides section.

The list of supermarket retail company websites linked in the table below will also be use to study retail chains in each country in more detail. (Yellow: top 5 in sales per country)

Czech Republic

 

Germany

 

Hungary

 

Spain

 

UK

 

Albert

 

AEZ

 

Aldi

 

AhorraMas

 

Aldi

 

Country Life

 

Akzenta

 

Auchan

 

Alcampo

 

ASDA

 

Globus

 

Aldi

 

CBA

 

Aldi

 

Booths

 

Jednotac

 

Aldi Nord

 

Groby

 

Alimerka

 

Budgens

 

Kaufland

 

Aldi Sued

 

Lidl

 

Baly Supermercados

 

Centra

 

Lidl

 

Alnatura

 

Match

 

BM Supermercados

 

CK Supermarkets

 

Penny Market

 

Ambrosino Supermarkt

 

Penny Market

 

bonArea

 

Cooperative

 

Tamda

 

Basic Bio

 

Real

 

Bonpreu i Esclat

 

Costco

 

Terno

 

Beki

 

SPAR

 

Caprabo

 

David Sands

 

Tesco

 

Bio Company

 

Tesco

 

Carrefour

 

Farm Foods

 

Trefa Supermarket

 

Biomarkt

 

 

 

Condis

 

Filco

 

Vltavotynskelahudky

 

Bonus Markt

 

Italy

 

Consum

 

Fultons Food

 

 

 

Budni

 

Auchan

 

Dani

 

Heart of England

 

France

 

Bungert

 

Bennet

 

Dia

 

Heron Foods

 

Aldi

 

C+C Lautertal

 

Carrefour

 

E-Leclerc

 

Home Retail

 

Auchan

 

C+C Schaper

 

Conad

 

El Corte Ingles

 

Iceland

 

Carrefour

 

CAP Markt

 

Coop

 

El Jamon

 

John Lewis

 

Casino

 

Carrefour

 

Esselunga

 

Eroski Contigo

 

Kingfisher

 

Cora

 

Cittimarkt

 

Lidl

 

Froiz

 

Lidl

 

Delhaize

 

Combi

 

Penny Market

 

Hiber

 

Londis

 

Dia

 

Denns Biomarkt

 

Simply Market

 

Hipercentro

 

Marks&Spencer

 

Dia

 

Disk

 

Simply Market

 

Hipercor

 

Morrisons

 

E. Leclerc

 

Dornseifer Frischemarkt

 

Spar

 

Lidl

 

MySupermarket

 

Francap

 

Ebken

 

 

 

Lola Market

 

Netto

 

Franprix

 

ebl Naturkost

 

Netherlands

 

Makro

 

Nisa

 

Galeries Lafayette

 

Edeka

 

Agrimarkt

 

Mas y Mas

 

Ocado

 

Geant Casino

 

Edeka Food Service

 

Albert Heijn

 

Mercadona

 

Sainsburys

 

Groupe Casino

 

Edeka Verbund

 

Aldi

 

Nana

 

ShopRite

 

Intermarche

 

Elli Markt

 

Attent Supermarkten

 

Opencor

 

Spar

 

Leader Price

 

Erdkorn

 

Coop

 

Sanchez Romero

 

Supervalu

 

Leroy Merlin

 

Famila Nordost

 

Dekamarkt

 

Simply

 

Tesco

 

Lidl

 

Famila Nordwest

 

Dirk van de Broek

 

Spar

 

Waitrose

 

Louis Delhaize

 

Feneberg

 

Ekoplaza

 

SuperSano

 

 

 

Match

 

Frischecenter Zurheide

 

EMTE

 

Todo Todo

 

 

 

Metro

 

Frischemärkte TRABOLD

 

Hoogvliet

 

Veritas

 

 

 

Monoprix

 

Füllhorn Biomarkt

 

Jan Linders

 

Vidal Tiendas

 

 

 

Netto

 

Globus SB-Warenhaus

 

Jumbo

 

 

 

 

 

Norma

 

Gruener Markt

 

Jumbo Foodmarkt

 

Sweden

 

 

 

Shopi

 

Hamberger C+C

 

Lidl

 

7 Eleven

 

 

 

Simply Market

 

Hit

 

Makro

 

Axfood

 

 

 

Spar

 

Hit Ullrich

 

MCD

 

Bergendahls

 

 

 

Super Casino

 

Inkoop

 

Nettorama

 

Coop

 

 

 

Systeme U

 

Jibi

 

PLUS

 

Hemkop

 

 

 

Tegut

 

K+K Klaas + Kock B.V. & Co. KG

 

Poiesz

 

ICA

 

 

 

Czech Republic

 

Kaisers Tengelmann

 

Sligro

 

Lidl

 

 

 

Albert

 

Kaufland

 

Spar

 

Netto

 

 

 

Country Life

 

Kodi

 

Vomar

 

PrisXtra

 

 

 

Globus

 

Konsum

 

 

 

Spain

 

 

 

Jednotac

 

Landmanns Biomarkt

 

Poland

 

AhorraMas

 

 

 

Kaufland

 

Lidl

 

A.S. Watson

 

Alcampo

 

 

 

Lidl

 

LPG Biomarkt

 

Aldi

 

Aldi

 

 

 

Penny Market

 

Marktkauf

 

Aldik

 

Alimerka

 

 

 

Tamda

 

Metro

 

Alma Market

 

Baly Supermercados

 

 

 

Terno

 

Metro C&C

 

Auchan

 

BM Supermercados

 

 

 

Tesco

 

Minipreis

 

Biedronka

 

bonArea

 

 

 

Trefa Supermarket

 

Mix Markt

 

Bomi

 

Bonpreu i Esclat

 

 

 

Vltavotynskelahudky

 

Multi Markt

 

Carrefour

 

Caprabo

 

 

 

 

 

Nah und Gut Humpe

 

CBA

 

Carrefour

 

 

 

France

 

Nahkauf

 

E-Leclerc

 

Condis

 

 

 

Aldi

 

Naturgut

 

EKO

 

Consum

 

 

 

Auchan

 

Netto

 

Euro Sklep

 

Dani

 

 

 

Carrefour

 

Netto Marken Discount

 

Eurocash

 

Dia

 

 

 

Casino

 

Norma

 

Fresh Market

 

E-Leclerc

 

 

 

Cora

 

NP. Discount

 

Groszek

 

El Corte Ingles

 

 

 

Delhaize

 

Penny Market

 

Intermarche

 

El Jamon

 

 

 

Dia

 

Plus

 

Jeronimo Martins

 

Eroski Contigo

 

 

 

Dia

 

Pro Biomarkt

 

Kaufland

 

Froiz

 

 

 

E. Leclerc

 

REAL

 

Lekkerland

 

Hiber

 

 

 

Francap

 

Rewe

 

Lewiatan

 

Hipercentro

 

 

 

Franprix

 

SB Zentralmarkt

 

Lidl

 

Hipercor

 

 

 

Galeries Lafayette

 

Selgros

 

Malpka Express

 

Lidl

 

 

 

Geant Casino

 

Sky Coop

 

Market Dino

 

Lola Market

 

 

 

Groupe Casino

 

Spar Express

 

Marks & Spencer

 

Makro

 

 

 

Intermarche

 

Super BioMarkt

 

Netto

 

Mas y Mas

 

 

 

Leader Price

 

Tegut

 

Piotr i Pawel

 

Mercadona

 

 

 

Leroy Merlin

 

Temma

 

POLOmarket

 

Nana

 

 

 

Lidl

 

Treff 3000

 

Rabat Detal

 

Opencor

 

 

 

Louis Delhaize

 

Turk Marketi

 

Real

 

Sanchez Romero

 

 

 

Match

 

V Markt

 

Sano

 

 

 

 

 

Metro

 

Veganz

 

Sedal

 

 

 

 

 

Monoprix

 

VollCorner Biomarkt

 

Selgros

 

 

 

 

 

Netto

 

Wasgau

 

Simply Market

 

 

 

 

 

Norma

 

Wedl

 

SM Mlekovita

 

 

 

 

 

Shopi

 

WEZ

 

Spar

 

 

 

 

 

 

 

 

 

Tesco

 

 

 

 

 

 

 

 

 

Transgourmet Holding

 

 

 

 

 

 

 

 

 

Zabka

 

 

 

 

 

Direct sourcing by retail and food service companies

Consolidation in the number of supermarket chains There are over 420,000 non-specialist food retail stores in Europe. Nevertheless, this market segment is increasingly dominated by a relatively small number of large retail chains with international buyer groups. Several of these chains operate in multiple European countries, and the largest ones have turnovers exceeding €100 billion. The number of retailers is expected to decline further in the future. Large retailers, such as Carrefour or Ahold Delhaize are increasingly importing low and medium value-added products directly, instead of relying on importers.

Direct sourcing happens when retailers and food service companies purchase directly from the exporter. The number of exporters bypassing European importers has shown an upward trend.

This option is suitable for you if:

  • You can consistently supply high volumes at a competitive price
  • You are able to comply with strict quality, food safety and sustainability requirements
  • You are already familiar with the European market.

Characteristics:

  • Your margins are generally higher because of a shorter supply chain,
  • High up-front investment and on-going support costs,
  • High penalties in the event of non-compliance with contracts.
  • Compared with retailers in Southern and Eastern Europe, retailers in Northern and Western Europe are more likely to buy directly from exporters.

International Buying Groups

As part of the big chains’ strategy to further increase their buyer power they have chosen to cooperate in cross-border buying groups that achieve buying power through the volume of joint purchasing. Currently there are 6 main international buyer groups across Europe shown below. Note: the difference in focus with regard to private label vs. international brands. Some of the groups like EMD and AMS Sourcing focus entirely only on private label products.

Buying Group

Membership

 

Main focus of joint sourcing projects

 

Potential consumer turnover

 

Points of sale numbers

 

EMD

 

21 members: Asda, Tuko Logistics, Superunie, Axfood, Markant Germany, Markant Czech Republic , Markant Switzerland, Markant Slovakia, Markant Austria, Casino, Dagrofa, Globus Russia, Euromadi Iberica, ESD Italia, EuromadiPort, Unil/Norges Gruppen, EMC Distributions, Kaufland Poland, Kaufland Croatia, Kaufland Romania, Kaufland Bulgaria, Woolworths.

Private label products

 

178 bn. Euro (216 bn. Euro worldwide)

 

150.000 stores (including sub-members, excluding New-Zealand and Australia)

 

Coopernic

4 members: Coop Italia, Ahold Delhaize, Leclerc, Rewe.

 

International brands

 

142 bn. Euro

 

28.500 stores

 

Alidis/Agecore

6 members: Eroski, Edeka, Intermarché, Colruyt, Conad and Coop Switzerland

International brands

 

140 bn. Euro

 

21.800 stores

 

Eurauchan

3 members: Auchan, Système U, Metro Cash & Carry

International and national brands

 

131 bn. Euro

 

7.300 stores

 

AMS Sourcing

10 members: Ahold Delhaize, Booker, Dansk Supermarked, Hagar, ICA, Jerónimo Martins, Kesko, Migros, Morrisons, Uniarme

 

Private label products for members and the Euro Shopper range

 

103 bn. Euro

 

15.000 stores

 

BIGS

SPAR franchise holders in Austria, Belgium, Czech Republic, Denmark, Eire, Finland, Greece, Hungary, Italy, Netherlands, Slovenia, Switzerland and the UK

 

International brands and limited to a range of approximately 400 standardized own-brand products

 

21 bn. Euro

 

7.700 stores

 

Original Source: Source: IGD Research (2016) and IBG websites (March 2017). Figures include European countries only

Aquired from: SOMO Paper, Eyes on the price International supermarket buying groups in Europe

NON-SUPERMARKET CHANNELS

Specialised shops:

Specialised fruit and vegetable shops exist throughout the European market, although their market share has decreased to about 10 per cent. Most of them are family–owned, small independent shops that sell fresh fruit and vegetables as well as some related food items. They buy primarily from local wholesalers.

Street markets:

Most European cities have regular (sometimes daily) fruit and vegetable markets. Traders rent stalls and sell fresh produce that they usually source from local wholesalers or producers. The street markets have a decreasing market share of only a few per cent in most countries.

Food service:

The food service channel includes restaurant, hotels, business catering and hospitals. These organizations usually procure fresh fruit and vegetables from local wholesalers. The food service channel has an estimated market share of about 10-15% for fruit and about 20% for vegetables.

E-commerce / Online concepts:

E-commerce is growing in Europe, especially in Northern European markets, where online shopping has become an integral part of society. Supermarkets are experimenting with home delivery of fresh products, and new independent concepts are emerging (for example food boxes with recipes). Examples include Hello Fresh and Gousto.

CHANNELS FOR DRIED AND FROZEN

As can be seen from the diagrams below, channels to the market for further processed fruits and vegetables like frozen and dried, are distinctly different, primarily because of further processing in Europe and the integration of the final product into various food products such as cereals, snacks and bakery products.

Market Channels for Frozen Fruit and Vegetables

(Source: www.cbi.eu)

Market Segments Dried Fruit  

(Source: www.cbi.eu)

Market Channels for Dried Fruit

(Source: www.cbi.eu)

Market Channels for Dried Vegetables

(Source: www.cbi.eu)

TIPS ON MARKET ENTRY AND APPROACHING BUSINESSES IN THE MARKET

Exporters with little experience in the market will face challenges convincing importers to immediately start buying from them. Agents, who have good contacts with Importers are a good alternative. A good means of finding agents is on Globaltrade.net

Reaching Importers and Retailers requires a good better knowledge of the market and a good understanding of their requirements. Presenting your companies’ market knowledge, experience and capabilities in line with their requirements is therefore critical. The buyer pitch template will help you convey these.

At the same time it is important to build your network and connect with Purchasing Managers using tools such as Linked In, contacting Importer Associations, making use of Vietnam’s 22 Commercial Counsellors in 22 markets in the EU, and importantly, also attending international trade fairs. Below are a list of European Associations and Key Trade Fairs.

When seeking to network with retailer purchasing, it is important to study the retailers purchasing approach taking into account whether or not your product would more likely be purchased by a Retail Buying Group rather than the Purchasing Department of the retailer itself. As indicated above major food retailers buy products from central buying offices. These offices usually source products, handle import (customs) formalities, logistics, supply, maintenance, delivery, and sometimes pricing and labeling for their retail customers. They insure that foreign-sourced products meet all import requirements, including food labeling, packaging, and other market specifications. The goal for a Vietnamese exporter is that its product meets all the import requirements and that the central buying office includes it in its product catalogue. Food retail buyers use this catalogue to make purchases for their stores.

It is also important to note that the choice of product for global direct sourcing can vary significantly and purchasing can be through an Asian office. Tesco, for example does a significant part of its Asia sourcing through Tesco International Sourcing (TIS) based in Hong Kong. Metro Group also in Hong Kong through MGB – Metro Group Buying HK Limited.

Associations:

European Fresh Produce Association

freshfel.org 

European Fruit and Vegetables trade Association (EUCOFEL)

Eucofel.eu

Organic Processing and Trade Association Europe

www.opta-eu.org

Trade Fairs:

ANUGA

www.anuga.com

SIAL

www.sialparis.com

BIOFACH  

www.biofach.de/en 

Fruit Logistica

www.fruitlogistica.de/en

Fruit Attraction (Madrid)

http://www.ifema.es/fruitattraction_06

London Produce Show

http://londonproduceshow.co.uk

Food Ingredients Europe

www.figlobal.com/fieurope

Salima International Food Fair

www.bvv.cz/en/salima

For additional tips on approaching buyers read CBI, Netherlands’ 10 tips on doing business with the FFV sector. [Retrieve and download the report from the CBI report window]

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