REPORT ON SPICES BOARD S PARTICIPATION IN

Transcription

1 REPORT ON SPICES BOARD S PARTICIPATION IN NUREMBERG MESSE, GERMANY 14 th to 17 th FEBRUARY

2 ACKNOWLEDGEMENT We express our sincere gratitude to Dr. A. Jayathilak, IAS, Hon ble Chairman, Spices Board, Govt. of India for giving us opportunity to participate and to represent Spices Board in the international organic trade fair BioFach 2018, Nuremberg, Germany held from 14 th to 17 th February We also cordially thank the Publicity, Administration, Accounts and Marketing Section of Spices Board for extending prompt support for the arrangements made for successful participation in BioFach Sapna Tomar Assistant Director Spices Board Hyderabad Ashutosh Gautam Scientist B Spices Board Gangtok Germany 2

3 Germany, (officially: the Federal Republic of Germany; German: Bundesrepublik Deutschland) is the largest country in Central Europe. It is bordered to the north by Denmark, to the east by Poland and the Czech Republic, to the south by Austria and Switzerland, and to the west by France, Luxembourg, Belgium and the Netherlands. Germany is a federation of 16 states, roughly corresponding to regions with their own distinct and unique cultures. Germany is one of the most influential European nations culturally, and one of the world's main economic powers. Known around the world for its precision engineering and high-tech products, it is equally admired by visitors for its oldworld charm and "Gemütlichkeit" (coziness). If you have perceptions of Germany as simply homogeneous, it will surprise you with its many historical regions and local diversity. German Economy in 2017: Stable but not staid 3

4 The economy of Germany is a highly developed social market economy. It has the largest national economy in Europe, the fourth-largest by nominal GDP in the world, and fifth by GDP (PPP). In 2017, the country accounted for 28% of the euro area economy according to the IMF. Germany is a founding member of the European Union and the Eurozone. In 2016, Germany recorded the highest trade surplus in the world worth $310 billion, making it the biggest capital exporter globally. Germany is the third largest exporter in the world with 1.21 trillion euros ($1.27 trillion) in goods and services exported in The service sector contributes around 70% of the total GDP, industry 29.1%, and agriculture 0.9%. Exports account for 41% of national output. The top 10 exports of Germany are vehicles, machinery, chemical goods, electronic products, electrical equipment, pharmaceuticals, transport equipment, basic metals, food products, and rubber and plastics. 4

5 In July 2017, the International Monetary Fund gave the country's economy "yet another bill of good health" and some advice on steps it might take to maintain this level in the long run. Germany is rich in timber, potash, salt, uranium, nickel, copper and natural gas. Energy in Germany is sourced predominantly by fossil fuels (50%), followed by nuclear power second, then gas, wind, biomass (wood and bio-fuels), hydro and solar. Germany is the first major industrialized nation to commit to the renewable energy transition called Energiewende. Germany is the leading producer of wind turbines in the world.renewables now produce over 27% of electricity consumed in Germany. 99 percent of all German companies belong to the German "Mittelstand," small and medium-sized enterprises, which are mostly family-owned. Of the world's 2000 largest publicly listed companies measured by revenue, the Fortune Global 2000, 53 are headquartered in Germany, with the Top 10 being Volkswagen, Allianz, Daimler, BMW, Siemens, BASF, Munich Re, E.ON, Bayer, and RWE. The largest annual international trade fairs and congresses are held in several German cities such as Hanover, Frankfurt, Cologne, Leipzig and Düsseldorf. Imports to Germany increased 5 percent year-on-year to EUR 82.7 billion in December Purchases from the EU rose 6.4 percent to EUR 55.0 billion, of which Euro area countries (6.1 percent to EUR 37.4 billion) and other European countries (7.2 percent to EUR 17.6 billion). Also, inbound shipments from countries outside the EU increased 2.3 percent to EUR 27.7 billion. In 2017, imports grew to EUR 1.03 trillion from EUR 0.95 trillion in Imports in Germany averaged EUR Million from 1950 until 2017, reaching an all time high of EUR Million in March of 2017 and a record low of EUR Million in May of Germany - Economic Forecasts Outlook 5

6 The below is the economic forecasts for Germany including a long-term outlook for the next decades, plus medium-term expectations for the next four quarters and short-term market predictions for the next release affecting the German economy: TRADE Actual Q1/18 Q2/18 Q3/18 Q4/ Balance of Trade EUR Million EUR Million Exports EUR Million EUR Million Imports EUR Million EUR Million Overview Actual Q1/18 Q2/18 Q3/18 Q4/ GDP Growth Rate percent Unemployment Rate percent Inflation Rate percent Interest Rate percent Balance of Trade EUR Million 6

7 Government Debt to GDP percent Source: /tradingeconomics.com 7

8 Germany Imports By Category Source: tradingeconomics.com Source: tradingeconomics.com 8

9 9

10 World Organic Market Organic agricultural land and other non-agricultural areas in 2015: Oceania 22.8 Million Ha (45% of world s organic agriculture land) Europe 12.7 Million Ha (25% of world s organic agriculture land) Latin America 6.7 Million Ha (13% of world s organic agriculture land) Asia 4 Million Ha (8% of world s organic agriculture land) North America 3 Million Ha (6% of world s organic agriculture land) Africa 1.7 Million Ha (3% of world s organic agriculture land) (Source: FIBL & IFOAM) Organic Agriculture - Key Indicators & Top countries Indicator World Top countries Countries with Organic Activities Countries New Countries: Brunei Darussalam, CapeVerde, Hong Kong, Kuwait, Monaco, Sierra Leone and Somalia Organic Agriculture Land Million Ha Australia 22.7 Million Ha Argentina 3.1 Million Ha USA 2 Million Ha Producer Million Producer India Ethiopia Mexico Organic Market Billion US dollar US Billion US Dollar Germany 9.5 Billion US Dollar France 6.1 Billion US Dollar Source: FiBLsurvey 2017, based on national data sources and data from certifiersglobal market: Organic Monitor 2017 Brief about European Organic Market 10

11 In Its 2017 report on the structuring and characterization of the organic sector, The Spanish Ministry of Agriculture, Fisheries, Food and Environment estimate that the world market grew more than 16% in 2016, reaching around Euro 88,000 million, a positive trend that, at the time of writing this article, seems to continue in European conventional retailers are also paying more attention to organic goods, and are incorporating a permanent wide range of products to their lines. The strategy, so far common in northern europe, is becoming the norm in countries with a tradition of specialized sales, such as France, Italy, Spain and Portugal, where organic market accounts for nearly 50% of the total market share. Recent International Consumer Surveys highlight several trends that might be influencing the decision of buying organic products. There is growing demand for more healthy products. Plant Foods free of Synthetic Fertilizer and Phytosanitary residues, animal products free from antibiotics and processed foods free from additives have been traditionally identified as healthy products. These are also distinctive characteristics of Organic Products. The organic sector should not forget that consumers buy organic products because they believe that due to their characteristics and method of production they are going to fulfill a number of personal needs. European citizens are recognising more and more the added value of organic food and farming and are increasing the consumption of organic products. Organic agriculture is based on four principles: Health, Ecology, Fairness and Care. Together, the four principles provide for a system of agriculture and food production that is both beneficial to people and the planet. Organic operators perform a dual role - they produce high quality goods for markets, whilst at the same time they deliver public goods for society. Germany is nevertheless the biggest organic market in Europe. The consumer market is growing more than 9 % last year. The percentage of organic foodconsumption in Germany is less than 4 % of the total food consumption less percentage than in Denmark, Austria and Switzerland but the market is quite bigger. At the moment the region with the highest organic consumption are in south. But also in the region north of Frankfurt the regional food-chain tegut... is selling more than 20 % organic food in their shops. 11

12 35 % of the organic food is sold in normal supermarkets and hypermarkets, 25 % in health shops or organic specialist shops, and 20 %in discount shops and every distribution channel is putting the weight on different product ranges and qualities. Germany needs a high percentage of imported organic products and not only in the typical range of overseas products like rice, coffee, tea or cacao. A growing percentage of organic milk, organic fruit and vegetables, grains and seeds has to be imported. (Source : BIOECO Actual & Google Search Engine) Trends in EU Market and Potential for Spices Export to EU The European demand for spices and herbs is growing. This fact is mainly due to trends such as healthy living, interest in new tastes and convenience. Due to high prices and a sense of scarcity, European buyers are continuously looking for new suppliers. You can find opportunities on smaller or niche markets focusing on special varieties, improved quality and sustainability. However, you should comply with strict requirements for quality, food safety and traceability to enter the European market. Growing Demand for Spices & Herbs: European imports of spices and herbs from developing countries have grown significantly in recent years, by 6.1% annually between 2012 and The global spices market is expected to grow by 5.1% between 2017 and

13 Most direct European imports come from developing countries (97% of the total imported volume). The positive market conditions therefore make it possible for you to benefit directly. Volume-driven, uniform product markets could provide opportunities, but competition is higher and margins are lower on such markets. As a small to medium-sized enterprise, you will find good opportunities in supplying so-called speciality spices and herbs that are traded in smaller volumes: Tips: special varieties; a focus on product characteristics (e.g. better colour and taste); customisation according to buyer s preferences; sustainability. 1. Directly target countries that now rely mostly on other European countries for their supply (countries other than the Netherlands, Germany, the United Kingdom, France and Belgium). These countries might, however, require further processing, packaging, smaller volumes and other services. 2. Focus on local or regional markets as well, such as the Asia-Pacific region. This area is projected to grow at an annual growth rate of 7% from 2015 to 2020, the fastest-growing market for spices in the world. 13

14 Growing popularity of ethnic food: The demand for ethnic food is rising in Europe. Reasons for this increase include the growing multicultural population in Europe and the fact that Europeans are travelling more and more to exotic destinations. As a result, the demand for spices and herbs used in exotic cuisine is also rising. At this moment, the following tastes are especially popular: Chinese (pepper, ginger, anise); Indian food (curry, chillies, cardamom); flavours of Thai food (cassia cinnamon, cloves, nutmeg); Vietnamese cuisine (ginger, chillies, fennel, pepper). The ongoing search for new tastes by cooks, food manufacturers and consumers will ensure that the market for spices and herbs continues to grow. This situation is the case on western European markets as well as in regions such as southern and eastern Europe, where the demand for ethnic food is still small. Smaller food processors, retailers and brands specialised in ethnic food are strong forces on the growing market for ethnic food. However, large retailers and multinationals are also increasingly active on this market. It is easiest for you to supply to smaller processors, retailers and specialised brands, as these parties are less demanding in terms of food safety, service and volume. They often import directly from developing countries and have close relations with their home country, making it easier for you to connect with them. The size and composition of ethnic communities differ strongly by country, so opportunities will also be different. For instance, within western Europe, there are large differences between: the United Kingdom (Indian, Pakistani and Bangladeshi); the Netherlands (Indonesian, Turkish and Moroccan); Germany (Turkish); France (Moroccan, Algerian, other communities in north Africa, Frenchspeaking countries in west Africa). It is also important to realise that ethnic food tastes vary by region, country and even buyer. Indian food in the United Kingdom tastes different from that in Germany, and uses different ingredients and mixes. 14

15 Tight supply leads to high prices for most spices: There has been an overall trend of increasing prices on the global market for spices and herbs. The increase is mainly due to a growing demand while production stays behind. Below Figure illustrates the general increase between 2009 and Saffron is an exception. The prices of saffron have decreased slowly over the years, which could be caused by the illegal trade and the production of fake saffron around the world. In addition, the European import prices of vanilla increased significantly between 2012 and 2016 (by 55% annually). This fact is mainly due to production problems in one of the main producing countries, Madagascar. The index of vanilla rocketed from 100% in 2012 to almost 700% in As a result, the data for vanilla were not included in below Figure:- There are some other points which includes European buyers look for compliant suppliers, Growing awareness of sustainability, European consumers looking for convenience, Healthy living and Fluctuating exchange rates which needs careful study to better understand the EU market. 15

16 New or Value Added Spices in EU The European market for value-added spices and herbs, such as crushed or mixed, is growing, but remains highly competitive. Especially for consumer-packaged spices and herbs, competition from European companies is very strong. As an exporter already supplying whole spices and herbs, the first step in adding value to your product would be to try and sell crushed or ground spices and herbs. You can then choose to also sell mixtures or even a consumer-packaged variety. An important first step to value addition is investing in the quality and food safety of your product. There are few factors which needs to be consider while entering into European Market for Value Added Spices: 1. Product description 2. What makes Europe an interesting market for value-added spices and herbs? 3. With which requirements must value-added spices and herbs comply to be allowed on the European market? 4. What competition do you face on the European value-added spices and herbs market? 5. Which channels can you use to put value-added spices and herbs on the European market? 6. What are the end-market prices for value-added spices and herbs? The detail study on above points can be done with the helps of various Export data, Internet Surfing, government websites while planning for Export of Value added products to EU. Tips: 1. Visit or participate in trade fairs to test if the market is open to your product, acquire market information and find potential buyers. The most relevant trade fairs in Europe are Food Ingredients Europe, Biofach (for organic products), SIAL and Anuga. 2. Conduct additional market research to gain insight into the differences between the various European markets mentioned above. For example, create a free account for statistical databases such as Eurostat or ITC Trademap. 16

17 3. Stay up to date on market developments and keep an eye on your biggest competitors. Consult multiple sources. For example check the market and crop reports from the European Spice Association, Nedspice or public sources such as Business Standard. Estimates and projections are only valid for 4 6 months and can be incorrect. Moreover, production prognoses and market conditions can change quickly. 4. Provide information on your product s background. Where does it come from? In what dishes is it traditionally used? Can you include a recipe describing how to use the spice or herb? 5. Emphasise product characteristics that are related to your country or region, such as taste, quality and authenticity. Use these aspects to build a marketing story around your product. 6. Make sure you are able to market your product according to the demand on the European market. Identify this demand by checking which of your spices or herbs are used in popular mixtures. Have a look at websites of European spices and herbs companies such as Verstegen or Euroma. 7. Determine from the angle you would like to take with your story; do you want to emphasise the region and/or country of origin, traditional use, or something else? 8. Find out what your buyers expect from you in terms of sustainability. Always verify whether they are interested in certified spices and herbs. European companies have different definitions, priorities and ambition levels when it comes to sustainability. Some may want you to comply with their code of conduct or sustainability code, while others expect product certification. 9. Look for possible partners to promote sustainability. You can use available programmes and subsidies from governmental or non-governmental organisations in developed countries for investments in sustainability. 10. Check the Rapid Alert System for Food and Feed (RASFF) database for examples of withdrawals of spices and herbs from the market and the reasons behind these withdrawals. Common causes are contamination with Salmonella, ochratoxins or aflatoxins, and unauthorised additives. 11. Comply with requirements as listed above. Your product can be withdrawn from the market if you do not. 17

18 12. Compare your company with your buyer or potential buyer to find a strategic fit. Can you comply with extra-legal food safety and sustainability requirements? What quantities of product can you deliver? What type of product do you produce, mainstream or niche? 13. Regularly check the website of the European Food Safety Agency to keep up with the latest news on European food regulation and food alerts. 14. Only accept contractual requirements when you are certain that you can meet the requirements. Otherwise, you can be held liable for consumer injuries from unsafe products. 15. Obtain insurance for product liability if the risk of liability claims is big, for example when you supply directly to retailers or when you have a valuable brand or reputation. In other situations, European importers will often be held liable. 16. Comply with food safety requirements during drying, storage, processing (such as sieving, mixing, grinding or crushing), packaging and transport. If you do not, steam sterilisation will not work. 17. You also need to prevent contamination with mycotoxins and other contaminants because steam sterilisation cannot remove these. 18. Find out for your product what European consumers are looking for in terms of packaging. Check online retail stores for examples and talk to potential buyers. 19. Store packaged spices and herbs in a dry, cool place to prevent quality deterioration. 20. Physically separate certified sustainable spices and herbs from any noncertified or non-sustainable spices and herbs you produce. 21. Make sure you can identify all your products throughout all stages of the supply chain, such as storage, transport, processing, packaging, labelling and handling. Also include this in your documentation. 22. Work with reliable collectors and farmers. Make sure you or the collectors you work with integrate sustainable practices to improve supply continuity. Educate your suppliers on efficiency and agronomics. This can help to show your buyers that you are a reliable supplier of spices and herbs and can deliver a stable supply quantity. 23. Work closely with your suppliers to ensure transparency and traceability. 18

19 24. Provide your buyers with references, credentials and any other assurance that shows that you understand and are capable to comply with market entry requirements. Your buyers need to trust your capabilities. You need to take away any possible concerns. 25. Use your national or regional markets as a stepping stone for the European market. 26. Emphasise product characteristics that are related to your country or region, for example taste, quality and authenticity. Use these to build a marketing story around your product. BioFach 2018 Organic is more than a label or certification: organic stands for quality and conviction for the responsible use of nature s resources. BIOFACH in the Exhibition Centre Nuremberg is the place where people shared their passionate interest in organic food, get to know each other and exchanged views. 19

20 More than 3000 exhibitors and more than 50,000 visitors (incl. VIVANESS) from the national and international organic sector presented at BIOFACH It was the perfect opportunity for visiting professionals to meet organic producers from the organic market and be inspired by the sector s latest trends. BioFach is World's Leading Trade Fair for Organic Food, combined with VIVANESS, International Trade Fair for Natural and Organic Personal Care, is an important business event, an emotional event for the sector, and both a get-together and an opportunity for positioning. Not for nothing is the exhibition duo the annual platform for Network, Market, Knowledge and Politics. BIOFACH is used for image building by manufacturers and traders and all the stakeholders involved. With over 1,000 media representatives from 39 countries and extensive media reporting, the exhibition duo offers a powerful PR platform. BioFach is the platform where supply meets demand for both visitors and the exhibiting companies. Manufacturers present their company and products to the whole community and observe and analyse the market and position themselves for the competition at the same time. Spices Board Participation in BioFach 2018, Nurnberg Spices Board stall at BioFach 2018, Nuremberg The Spices Board of India, a pioneer of promoting organic cultivation of spices in India made its commendable participation in BioFach It s an annual phenomenon for the Board to contribute its significant presence and presentation in 20

21 this leading organic trade fair. Board participated with six of its co-participant who are dealing in organic spices export in Hall 5 spread over 50 sq. mts. The Indian pavilion was coordinated by APEDA taking 598 sq mts. Apart from the Board s stall, more than 50 leading Indian organic products exporting companies had stalls to promote export of organic spices. Spices Board s stall attracted more than 300 visitors from different parts of the world and received 58 trade enquiries. Mr. Sugandh Rajaram, Consulate General of India, Munich visited the stall along with Mr. Asheesh Gupta, Commercial Representative / Consul (E&C), Munich on the first day of the exhibition 14th Feb APEDA chairman Shri Devendra Kumar Singh, IAS has visited the Spices Board stall on the second day of the exhibition 15th Feb In BioFach 2018, Spices Board of India was represented by Ms. Sapna Tomar, Assistant Director and Mr. Ashutosh Gautam, Scientist-B. The following are the Six co-participants at the Spices Board stall:- 1. Green Valley Organic Spices, Karnataka 2. Seasonal International Pvt. Ltd.,Rajasthan 3. Aricha Trading Co. Ltd, Kolkata 4. MRT organic Green Products, Kerala 5. C G Herbals, Mumbai 6. Jeevagram, Kerala All the co-participant exporters could revive their business relation with the international buyers of organic spices and spice products during the fair. These Six co-participants expressed their satisfaction over worth participation through the Board s stall. The queries received were mostly about availability of organic spices like ginger, turmeric, pepper, chilli etc. The foreign customers also enquired if exporters are having organic certificate. Indian Organic Spices Export Data ITEM-WISE EXPORT OF ORGANIC SPICES FROM INDIA (Qty.in M.T., Value in Rs. Lakhs) ITEM (P) QTY VALUE QTY VALUE QTY VALUE PEPPER

22 CARDAMOM(SMALL) CARDMOM(LARGE) CHILLI GINGER TURMERIC CORIANDER CUMIN CELERY FENNEL FENUGREEK OTHER SEEDS GARLIC TAMARIND NUTMEG/MACE VANILLA OTHER SPICES CURRY POWDER/MIXTURE SPICE OILS AND OLEORESINS MINT OIL TOTAL(including others) (P): Provisional 22

23 Source: Exporter's returns and hence provisional Top Organic Importing Countries from India MAJOR COUNTRY-WISE EXPORT OF ORGANIC SPICES FROM INDIA (P) Countries QTY VALUE QTY VALUE QTY VALUE (M.T) (RS.LKS) (M.T) (RS.LKS) (M.T) (RS.LKS) U.S.A GERMANY U.K FRANCE NETHERLANDS BELGIUM KOREA(SOUTH) SWITZERLAND AUSTRALIA SWEDEN JAPAN ITALY SPAIN CANADA SOUTH AFRICA EGYPT FINLAND HONGKONG TAIWAN NEWZEALAND ARGENTINA AUSTRIA

24 SRI LANKA SAUDI ARABIA BANGLADESH DENMARK TURKEY BULGARIA MALAYSIA MEXICO SINGAPORE COLUMBIA CHINA U.A.E ISRAEL HUNGARY VIETNAM TOTAL (INCL.OTHERS) (P): Provisional Source : Exporters' Returns and hence provisional 24

25 PHOTO GALLERY Spices Board stall in BioFach 2018 Mr. Sugandh Rajaram, Consulate General of India, Munich discussing with Indian spices exporters in the Spices Board stall in BioFach 2018, Nuremberg, Germany. 25

26 Mr. Sugandh Rajaram, Consulate General of India, Munich welcomed by Board official Mr. Ashutosh Gautam, Scientist - B, Spices Board. Ms. Sapna Tomar, Assistant Director, Spices Board discussing with foreign customers at the Board s stall. 26

27 Board officials with co-exhibitors at the Board s stall. Mr. Ashutosh Gautam, Scientist - B, Spices Board discussing with foreign customers along with Co- Exhibitors at the Board s stall. 27

28 Co-Exhibitors discussing with customers at the Board s stall 28

29 Organic products at other stalls displayed during in Biofach

30 30

31 31

32 32

33 33

34 34

35 THANK YOU 35