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Market Research – PART II
Training:
Setting up export promotion services in
agri-food sectors
Project:
Support of Regional Economic Cooperation in
Asia (SRECA)Experts: Ferry Böhnke and Kathrin Seelige
23rd of March 2021
Introduction
Agenda
1. Short Welcome of the day
2. Review Assignment – Who is doing what ?
3. The EU Food Market – figures, facts and trends
4. EU Market Requirements
5. Assignment: Guide on Import Requirements
6. Probing into China’s agricultural import policies
GACC
3
Review Assignment – Your feedback
Let’s go to www.menti.com !
Enter the Code: 9911 0985
Review Assignment:
Which market research did you draft
11
Review Assignments
Let’s share your ideas
Please take a look at your Draft!
Share with us via chat:
1. What is the title (overall topic) of your potential market research?
2. Which market / country do you want to cover?
3. Which format did you choose to present the results?
4. Will you be able to conduct this research in the near future – yes or no?
12
What is your Research about?CAMBODIA
General Directorate of Agriculture/MAFF Conducting? - Y / N
Topic: Fresh longan market study
Market / Country: Global Deliverable: Not yet specified
Trade Training and Research Institute (TTRI) - Ministry of Commerce (MoC)General Directorate of Trade Promotion - Ministry of Commerce (MoC)
Conducting? - Y / N
Topic: Promoting export of cashew nut to China
Market / Country: China Deliverable: Report on Website and webinars nationwide
Cambodia Logistcs Association (CLA) Conducting? - Y / N
Topic: Needs Assessment for Trainings on Export Logistics
Market / Country: Cambodia Deliverable: Training
13
What is your Research about?MONGOLIA
Export International Trade Center (EITC) Conducting? - Y / N
Topic: Legal and marketing requirements to import milk and dairy products to the European Union.
Market / Country: EU Deliverable: Market report
Women Entrepreneurs Council (MWEC)/ Zulgensors LLC Conducting? - Y / N
Topic:
1. Export requirements and Marketing of Cashmere into niche markets EU and Japan2. Meat market research for provincial and urban areas, covering preparation, collection and delivery to international raw material markets.Market / Country: 1. EU, Japan2. China, Russia
Deliverable: Market Report2. Website, Manuals, Webinars, import apps,
Mongolian National Chamber of Commerce and Industry (MNCCI) Conducting? - Y / N
Topic: Support textile cluster in export to Europe
Market / Country: Europe Deliverable: Market report through website
14
What is your Research about?VIETNAM
Investment and Trade Promotion Center (ITPC) Conducting? - Y / N
Topic: The possibility of increasing the export volume of Vietnam black pepper to India market.
Market / Country: IndiaDeliverable: Market report through website, booklet, newsletters
Vietrade Conducting? - Y / N
Topic: Trends & Opportunities for Exports to China
Market / Country: China Deliverable: Workshop
15
Exchange and Cooperation
There are quite some synergies in your research projects
Chat on the SRECA Online Training Platform and assess the potential for cooperation!
The EU Market for food and beverages
figures, facts and trends
Small households → average 2.4 (Eurostat 2015)
Strong purchasing power → 0.35% growth/person in Europe (GfK 2019)
Total Population 446,834,578 (Eurostat 2020)
27 EU Member States (Brexit)
The European Union
48,1% of f&d turnover
61,3% of f&d employment
99,1% of companies
SMEs
294.000
Fragmented industry
No. of companies
Source: Eurostat, Comtrade, OECD, foodanddrink europe
1,192 billion €
(= + 6,7 % vs. 2015)
largest manufacturing sector
in the EU (15.4%)
Turnover
4.57 million people
( +1,3 % vs 2015)
Leading employer in the EU
manufacturing sector (15%)
Employment
Exports: 110 billion €
(= +8% vs. 2016)
Imports: 75 billion €
(= +4,3 % vs. 2016)
Trade balance:
35 billion €
(= net exporter)
External Trade
2017 Data
2,8 billion €
0.26 % (of turnover)
20% of companies had
innovations
Research & Development
No. of companies
Employment
AGRICULTURE:
+ 462 billion €
WHOLESALE:
+ 1,032 billion €
RETAIL:
+ 1,128 billion €
= 3,800 billion €
FOOD SUPPLY CHAIN
Food and Beverage market in the EU
20
Responsible for
45% of global tradein fresh fruits & vegetables
(ITC Trademap 2021)
The EU Fruit Market
0
1000
2000
3000
4000
5000
6000
Bananas Citrus fruit Grapes Avocados Pineapples Mangoes (incl.guavas and
mangosteens)
Main import products (import value in € million)
2014 2015 2016 2017 2018
Total import value
from developing countries
increased 38% in five years, reaching 18.2
billion euros in 2018.
€ 14
billion
€ 10.7
billion
€ 11.4
billion
€ 10.5
billion€ 7.1
billion
€ 4.1
billion
Source: Cosmetics Europe, 2020
What about :
• smaller fast growing
markets?
• High spending
markets?
• Less competitive
markets?
Major cosmetic markets in Europe
22
The EU Import Market
▪ Imports of fresh produce in off-season
▪ More processed products are imported
▪ Growing imports of exotic produce
▪ Growth of certain markets outpaces the supply (e.g. organic)
EU-Market has a growing demand for imports
➔Good opportunities for exporters
from third countries
EU importers need to mitigate risk and list new origins
Responding to threats from Climate change, COVID and Brexit
24
Source: AMI-informiert
2019
Belgium
Netherlands
United Kingdom
France
Germany
Italy
Spain
Poland
Lithuania
Import of fresh fruits in 2017 in 1,000 t
Major importers – example fresh fruits
Different countries – different trading positions
13% of household
expenditure
Ø Consumption
Household expenditure on food & drinks 2019
Source: Eurostat 2021
11.07.2017 29
Source: Euromonitor
EDEKA: 39%
Schwarz-Group: 15% Aldi: 12%
Rewe: 15%
Metro: 5%
Others: 14%
Company Shares of the Germany Food Retail Sector 2015
EDEK Schwarz-Group Aldi Rewe Metro Others PRICE SENSITIVE MARKET
Distribution is dominated by large (price sensitive) retailers
example: Germany
31
Trends related to Covid 19
• HORECA (food service) and wholesale channel almost closed, with minimum demand
• Food retail facing unprecedented growth
• Markets are very volatile (prices and volumes) and hard to predict
• Limited diversity of supply
• Increased focus on local and near-shore markets
• Growing demand in preservable products (peaking in the beginning of the pandemic: flour (+126% ), Rice (+112 %))
• Decline in demand of perishable products and exotic fruits
• Textmasterformat bearbeiten
– Zweite Ebene• Dritte Ebene
– Vierte Ebene
» Fünfte Ebene
Market Trends are consumer driven
1. Eating for pleasure, more exotic flavours and products
2. Consumers want convenience
3. Growing concern about health and well-being
4. Sustainability is becoming a Must
Leading trends in the European food market are…
Exotic spices and flavours
NEW: Canihua, Teff, Freekeh, Kamut
NEW: milk, creamed coconut, blossom sugar
NEW: fermented vegetables, kimchi, pickles, etc.
1. Exotic products and ingredients are booming
• Imports forecasted to grow about 3- 5% per annum in next 5 years
• Especially “healthy spices (like ginger, turmeric, garlic) faced massive growth (curcuma + 20% 2019 – 2020)
• COVID 19: More demand for high price and quality products (home cooking)
• Main importers are Germany, the United Kingdom and the Netherlands.
Growing demand in spices
• Snacks and smaller portion packs, also for on-the-go
• Instant breakfast / Smoothies
• Frozen Vegetable mixes with spices, herbs
• Pre-cut fresh fruit and vegetables
2. Consumers want Convenience
Frozen Products
38
Trend in fruits: fresh Cut
Convenient and healthy SNACKIFICATION"
• Fitting in a particular diet…
• low in calories or specific carbohydrates
• gluten free -> e.g. quinoa, teff and cassava flour
• lactose free / vegan -> milk from nuts such as almonds, cashews
• Fats and oils that are considered as healthy (palm oil under attack)
• Less sugar and alternative sweeteners that are considered as healthy
• coconut blossom sugar, lucuma, inulin (from peas, lentils, banana, chicory root)
• Products that have positive effects on the metabolism (SUPERFOODS)
3. Consumers want food with health benefits
= “a nutrient-rich food considered to be
especially beneficial for health and well-being“(Source: Oxford Dictionary)
• Applied e.g for blueberries and other berries , powders, kale, certain seeds and pulses (chia, lentils),
nuts, vegetables, avocado etc.
• Superfood is only a marketing term, not a category
• No official definition or regulations
• Health benefits not always scientifically proven
Superfoods are booming
More demand for additive-free products
• reducing the environmental impact of production…
• More organic products
• Less waste from packaging
• More regional, especially for fresh produce (CO2 footprint)
• … providing vegetarian and vegan alternatives
• … claiming Sustainability as a guiding principle for business
4. Consumers want “sustainable food”
➢ Annual growth (11%) outperfoming conventional market growth (3%)
➢ Linked to growing demand for „sustainable“ and „clean“ food (ingredients and contaminants)
Retail sales in
Billion euros
Organic market is growing strongly
Source: The world of organic agriculture. FiBL- AMI, 2019.
Countries with the highest growth rate 2016 -2017
Less waste and more eco-friendly packaging
… and even “Zero Waste”
➔ This creates demand for alternative ingredients ( plant proteins, almonds, cashew, …)
More and more vegan and vegetarian alternatives
https://www.youtube.com/watch?v=utSYAkQi5hY http://www.natureandmore.com/en/node/972
Sustainability as business principle
+59% Products with an
ethical message
2014 vs. 2013
Legal and common requirements
In the EU market for food and beverages
54
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55
Required documentation for imports into EU
Basic documentation includes
• Sanitary / Phytosanitary Certificate
• Certificate of Origin
• Commercial Invoice
• Packing List (info on weight, dimensions, units etc.)
• Certificate of Inspection (COI) for organic products
• Transport Documents (Air Waybill (AWB) / Bill of Lading etc.)
❖ Full compliance with EU regulations must be documented!
❖ Analysis regarding contaminants and residue levels is mandatory
❖ Consider restrictions regarding imports of certain products
Non-compliance results in withdrawal of products and penalties
❖ Customs clearance
❖ Correct classification and coding of product
Exporting to EU requires proof of conformity
❖ If applicable: registration in TRACES (Trade Control and Export System)
To comply with legal requirements, buyers need well-structured product and company documentation.
Cosmetic product documentation needs to include documentation for each ingredient you use.
For each ingredient in your cosmetic product, you need to have detailed:
• Technical Data Sheets (TDS) that specify product quality
• Safety Data Sheets (SDS) on possible dangerous characteristics of chemical
• Certificate of Analysis (CofA) per batch, to check if quality conforms to TDS
• Certificate of Conformity, signed statement that CofA conforms to TDS or specifications
• Allergen declarations for essential oils and vegetable oils
Example: Documentation for Cosmetics
• Common principles and “free movement of goods
• EU-legislation defines mininimum mandatory requirements for all 27 member states
• Besides, national law and some additional regulations on national level
Regulation on
Food Hygiene
General Food Law and Food
Safety Reg.
Product related
regulations
+ additional regulations
National Law
„Bierverordnung“
Beer regulation
…
„Bierverordnung“
Beer regulation„Bierverordnung“
Beer regulation
Legal Framework
European Union = one single market
EU and national legislation
Safety & Quality
„European citizens need to have access to
safe and wholesome food of the highest standard. “
European Commission
must be guaranteed throughout the complete food supply chain
to track any food or related substance used for consumption through all
stages of production, processing and distribution.
Legal Framework
Food Safety & Quality
Traceability
The Importer:
• Must guarantee conformity with EU safety regulations
(MRLs, Microbiology, HACCP, Packaging, Labelling…)
• Needs full Transparency during all previous stages of
production, processing & distribution
Traceability and Transparency
Legal Requirements - The Basic
Codex Alimentarius – collection of standards for Food Safety and Product Quality
UNECE (United Nations Economic Commission for Europe) standards on food
both are internationally recognized standards; not legally binding, but many of its standards have
been translated into law (Common: German buyers expect full compliance to these standards)
General Food Law and Food Safety Regulation – 178/2002/EC
covers all stages of the production, processing and distribution of food as well as feed produced for (or
fed to) food-producing animals.
Legal Requirements - Most important regulations
Basic sanitary and phytosanitary requirements for the protection against deseases, pest orcontaminants
1. Food Hygiene (Regulation (EC) 852/2004) based on HACCP principles; defines microbiological criteria; procedures and control measures; temperature control; maintenance of the cold chain; and sampling and analysis
2. Maximum contaminants levels (Regulations 315/93/EEC and (EC) 1881/2006 ): define maximum levels for contaminants in food (eg. salmonella, ochtratoxin, aflatoxin)
3. Maximum Residue Levels (MRLs) Regulation (CE) no. 396/2005): levels of pesticide residues in foods and animal feed of vegetal or animal origin
• List per active ingredient and per product
• Unit: kg/product
• Sampling and analysis procedure per product
Legal Requirements - Most important regulations
• Good Manufacturing Practice (GMP) -2023/2006: applies for manufacturing and selling of food, drug products, and active pharmaceutical products
• Food labelling directive – 2007/68/EC (Food information system); sets standards for information provided to customers
• Food Supplement Directive – 2002/46/EC – protection against poential health risks and misleadinginformation
+ Product specific regulations:
Quality standards for the marketing of
processed or dried fruits and vegetables
(Regulation (EC) No 2201/96 of 28)
Legal Requirements - For packaging
Framework Regulation 1935/2004
• defines requirements for food contact materials
• Materials (e.g. packaging) may not transfer their constituents to food in quantities that could endanger human health, change the composition of the food in an unacceptable way or impact upon the taste and odour of foodstuffs (eg. Tin).
Guidelines by the industry (e.g. Codex Alimentarius for Packaging and Transport of Fresh Fruits
and Vegetables (CAC/RCP 44-1995).
Besides, general concern for reduction of packaging and packaging waste (especially in
Germany); measures defined in Directive 94/62/EC on Packaging and Packaging Waste
➔ Apart from legal regulations, packaging is defined by costumer‘s needs
Additional Requirements
• Refers to products not regularly used in EU human nutrition before May 15th 1997 and
• Products not considered as traditional staple nutition in the country of origin
• Must undergo testing and registration process to proofproduct safety
• Linked to costs and long burocratic procedures
NOVEL FOOD (Regulation EU 2015/2283)
Retailers (in the EU) exceed the EU law
• Stricter MRL levels: no more than 1/3 of the MRL level to be found on the product is common
practice
• Limit a maximum number of active ingredients
LIDL
< 33% of the MRL
permitted by law
ALDI
• < 70% of EU MRL per
active ingredient
• < 5 active ingredients
REWE / Metro / Kaufland
< 70% of EU MRL per
active ingredient
Legal Requirements vs. Common practice
Voluntary Certifications
Commonly requested by importers and retailers
Common additional requirements and standards
Many buyers require additional food safety certifications, e.g.
• HACCP – as a basic standard for safety management
• BRC – Global Standard for Food safety (British retail standard)
• IFS-International Food standard,
• ISO-Standards (eg. 22 000 on quality management)
• FSSC 22 000 (≈ ISO + additional technical requirements)
• GlobalGAP, for minimum standards in agro-production
➔ Different buyers
have different
preferences!
Food Safety Standards
Sector and product specific requirements
Cosmetics
• GMP GACP (GACP guidelines EMEA/HMPWP/31/99 and
EMEA/HMPC/246816/2005)
Juice Industry
• SGF Sure – Global – Fair: independent industrial self-control platform for fruit juices, fruit nectars and other products made from fruits and vegetables
Herbs and Spices
• Quality Minima Document (by the European Spice Association, ESA) sets standards for composition, packaging etc.
• ISO standard 55641982 for grading, handling and packing of pepper
Corporate Social Responsibility
Buyers (especially larger retailers) are more and more concerned about CSR and require a certaincommitment of their suppliers, e.g.
• Ethical Trading Initiative
• Business Social Compliance Initiative
• SMETA
• Rainforest Alliance
• Quality and resource management system such as the ISO 14000
German retailers no longer import fresh fruits or vegetables without social certification
Organic production
3 levels of organic regulation/ certification
1. EU wide regulation
• NEW Regulation (EC) 2018/848: minimum requirements for processing and production
• Regulations 1235/2008 and 889/2008 on import of organic certified products
2. National law
• sets standards on national level,
• e.g. Germany: standards defined by the German Organic Trade Association more
demanding than EU regulations
3. Private certification
Business Associations/ retailers/ organisations develop additional standards and
certifications
EU Organic Certification
Certfication is subject to comprehensive and regular (annual) inspection by approved inspection authorities (Germany: Öko-Kontrollstellen)
Basic requirements for EU organic certification:
✓ No production with or including GMO (genetically modified organisms)
✓ No application of synthetic pesticides
✓ No production using readily soluble mineral fertilizers
✓ Content of conventional ingredients may not be higher than 5% (+limited list of
approved conventional ingredients)
✓ No additional sweeteners, stabilizers or synthetic colorants, preservatives, flavors
and flavor enhancers
Basic requirements
➔ Private certifications go beyond legal requirements and claim stricter regulation
Private Organic Certification
Your Assignment:
Guide on Import Requirements
• Homework until next session !
• One draft per BSO!
• Guide your companies on import
requirements for the EU or China:
Your Assignment
Guide on Import Requirements
• Do a short research on import
requirements
• Compile your key findings as
hints for your companies
Hand in until Mon 29th via:
• Share some useful sources
• Select a potential export product
sequa gGmbH
Ferry BöhnkeExternal Expert Import Promotion DeskAlexanderstr. 1053111 Bonn
E-Mail: [email protected]: www.sequa.de
