The Fundación ExportAr (Argentina) has published a report on Europe's fruit and vegetable sector that covers trends, demand, competition, requirements and distribution channels in the European market for fruit and vegetables.
According to the report, supermarkets dominate a fruit and vegetables market characterised by a considerable price competition, where the presence of niche products and consumer concerns about sustainability are also on the rise. The Russian veto has also been greatly influential.
Changing market
One of the trends observed is the market diversification, especially in north-western Europe, where organic products, "superfoods" and exotic products are gaining great popularity. Additionally, consumers prefer convenience when buying their groceries (small packs, electronic commerce and ready-to-eat fruits and vegetables), and are becoming more aware of food safety and corporate social responsibility, so they increasingly demand more sustainable practices. The market is also regulated by the ban on the import of genetically modified fruits and vegetables into the EU.
The Russian veto on European goods, introduced in August 2014, has resulted in the disappearance of entire markets and falling prices. Politically, Europe has been forced to open new export markets and promote the consumption of local agricultural products.
Import, export and consumption
Before the crisis, imports enjoyed stability up until 2012, and there have recently been some signs of recovery. Exotic and off-season products dominate the imports. The popularity of tropical products (such as mangoes and avocados) and niche products (like exotic fruits and berries) is on the rise. Bananas are the most imported fruit, followed by pineapples, oranges and grapes.
As for exports, in 2014, Europe exported 18,700 million Euro worth of fresh fruit and 14,000 million Euro of fresh vegetables. Over 80% of European exports go to other European countries. Spain is the largest fresh fruit exporter, with a volume of almost 7.2 million tonnes. Nearly half of all Dutch shipments are re-exported fruits, especially exotic. The most important destinations are Germany, the UK and France.
In 2013, the EU produced 66.8 million tonnes of fresh fruit and about 114 million tonnes of fresh vegetables, almost half corresponding to the production of potatoes. The continent's vegetable production has been declining over the last decade. Adverse weather conditions have taken a major toll on the annual production.
The highest consumption rates of fruits and vegetables are those of Eastern and Southern Europe, but these still lie below the levels recommended by the WHO. This has led to initiatives to promote the consumption of fruits and vegetables, which are increasingly portrayed as a healthy alternative to unhealthy snacks.
Competition marked by prices
Gaining access to the European market is not easy, as the EU has strict regulations in place on packaging, labelling, calibres, pesticide use, and so on. Other than that, the price is the most important factor when competing; consumers tend to buy the same products again and again and only a few companies dominate the market for commodities. In general, there are many suppliers and buyers have numerous choices, so it becomes necessary to differentiate yourself by offering greater value, quality, taste or sustainability. Competition is not as intense when it comes to niche products, but the trend is changing and these are expected to play a more important role in the future.
The EU offers many business opportunities for exporters in member countries, and many foreign countries have signed free trade agreements.
Supremacy of supermarkets
Importers play a key role in the European market. Most fresh products from emerging countries are marketed via imports from wholesalers, who act as intermediaries between producers and large retailers. Supermarkets dominate the sale of fruits and vegetables, with market shares above 60%, to the detriment of traditional businesses and street markets, which have fallen by 10% in most countries. Smaller retail formats may not be able to stay in business due to price competition and their growing lack of advantages.
New concepts such as e-commerce and organic food stores have found support, especially in northern Europe.
