Organic Food Finland Experience of exporting organic products

Organic Food Finland Experience of exporting organic products 8.5.2012, Cesis Presentation Erkki Pöytäniemi / Organic Food Finland CEO, Export Manager

Organic Food Finland - background Erkki Pöytäniemi, CEO, M.Sc. (Agronomy) Marja Nuora, Development Manager, B.Sc. in Agronomy, Master of Arts (Philosophy) Organic Food Finland was founded in 1995 Organic exports from Finland since 1997, imports since 1998 Organic Export Group since 2004 (incl. Finnamyl) Ingredient imports, f.ex. DO IT bv (www.organic.nl) Organic business consulting and mentoring in Finland Vast knowledge and networks in organic industry world-wide

Topics for today Global and European Organic Market Organic Food in Finland Organic Export from Finland Organic Export Group Possibilities for Latvia

Global Organic Market Global market for organic food: 44,5 billion! (US$ 59 billion) in 2010 Market growth 8% YOY / 228% since 2000 Europe and North America cover 96% of the global revenue (USA, Germany, France) Total 37 Mha certified organic agr. land (2010) Europe: 10 Mha (+8,7%) Asia: 2,8 Mha of which 1,4 Mha in China

The drivers Health & Food Safety Environment and Sustainability Ethics and Fairness THE LOHAS CONSUMER

European Organic Market

European Organic Market market value appr. 20 billion! (USD 26 b) (global USD 59 billion/2009)

European Organic Market market value appr. 20 billion! (USD 26 b) (global USD 59 billion/2009) Germany 6,6 b!

European Organic Market market value appr. 20 billion! (USD 26 b) (global USD 59 billion/2009) Germany 6,6 b! France, UK, Italy

European Organic Market market value appr. 20 billion! (USD 26 b) (global USD 59 billion/2009) Germany 6,6 b! France, UK, Italy Market share of organic food in the EU15 appr. 2,5%

European Organic Market market value appr. 20 billion! (USD 26 b) (global USD 59 billion/2009) Germany 6,6 b! France, UK, Italy Market share of organic food in the EU15 appr. 2,5% Denmark 8%

European Organic Market market value appr. 20 billion! (USD 26 b) (global USD 59 billion/2009) Germany 6,6 b! France, UK, Italy Market share of organic food in the EU15 appr. 2,5% Denmark 8% Switzerland, Austria, Sweden huge range of organic products are available to the consumers - and for export huge deficit of raw material relatively mature market with large number of players in different sectors and levels of the business

Organic farming in Finland (2011) 158.000 ha + 26768 ha = 8,1%, c 4000 farms farms +2%, acreage +11% Lay 48%, Cereals (oats, wheat, rye, corn, mix), Rape Seed, Potato carrot, onion, cabbage, tomato, cucumber strawberry, black currant, apple Wild picking areas appr. 7 M ha 643 farms are certified for organic animals: suckling cows, dairy cows, sheep, laying hens, (pork) Inspected and certified by governmental body: Finnish Food Safety Authority (www.evira.fi)

Organic market in Finland 120 M! / 1,7% growth in 2011: +46% Sales channels: 84% in supermarkets Biggest product groups: Milk and dairy Vegetables, tomato Cereals and bread Meat products Eggs Potential for growth: 3x

Organic export from Finland: history

Organic export from Finland: history BioFach 1996,1997

Organic export from Finland: history BioFach 1996,1997 Makulaku Lakritsa

Organic export from Finland: history BioFach 1996,1997 Makulaku Lakritsa Grain

Organic export from Finland: history BioFach 1996,1997 Makulaku Lakritsa Grain 2001 Helsinki Mills: flour and flakes

Organic export from Finland: history BioFach 1996,1997 Makulaku Lakritsa Grain 2001 Helsinki Mills: flour and flakes 2006 bread

Organic export from Finland: history BioFach 1996,1997 Makulaku Lakritsa Grain 2001 Helsinki Mills: flour and flakes 2006 bread => added value products, diversification

Organic export from Finland: history BioFach 1996,1997 Makulaku Lakritsa Grain 2001 Helsinki Mills: flour and flakes 2006 bread => added value products, diversification Linkosuo Bakery

Organic Export from Finland value 2009: 14 M! /1% grain and milled products (oats, wheat, rye) bread (prot. gas, dry) other f.ex.: wild berries malt confectionary birch sap shiitake lactose free dairy appr. 60 companies potato starch and flakes

Organic Export from Finland (2)

Organic Export from Finland (2) The value chain bulk raw-material 20% semi-processed 25% private label 30% factory branded 25%

Organic Export from Finland (2) The value chain bulk raw-material 20% semi-processed 25% private label 30% factory branded 25% Target markets: Sweden, Denmark Central Europe (Germany, France, UK) Far East, USA

Export Group as tool for SME s

Export Group as tool for SME s a tool to help SME s develop export companies are funded 30-65% for 3 years to employ a joint export manager Organic Food Finland -export group started in 2004 with 5 companies 17 companies over the years export manager Erkki Pöytäniemi has generated over 5 M! annual exports Managed by Finpro

Export: challenges and opportunities for success

Export: challenges and opportunities for success The organic market is a relatively mature and competitive market. Huge range of organic products are already available. Image: Organic should be Local (problem for import?). High quality requirements including sustainability and ethical issues and naturalness Private or legislative standards on different markets (EU reg. not always sufficient).

Export: challenges and opportunities for success The organic market is a relatively mature and competitive market. Huge range of organic products are already available. Megatrends drive organic market growth: Health, Food Safety, Sustainability, Ethics 10% year-on-year growth Image: Organic should be Local (problem for import?). High quality requirements including sustainability and ethical issues and naturalness Private or legislative standards on different markets (EU reg. not always sufficient). Deficit of production in main market areas, production growth lower than market growth High share of private label Lack of affordable organic products.

Strengths & Opportunities for Latvia

Strengths & Opportunities for Latvia High acreage of certified organic field area

Strengths & Opportunities for Latvia High acreage of certified organic field area Easy access to the European market with EU origin

Strengths & Opportunities for Latvia High acreage of certified organic field area Easy access to the European market with EU origin Competitive pricing due to lower costs

Strengths & Opportunities for Latvia High acreage of certified organic field area Easy access to the European market with EU origin Receive organic premium prices for agricultural commodities from the export market: grain. Competitive pricing due to lower costs Modernized food manufacturers

Strengths & Opportunities for Latvia High acreage of certified organic field area Easy access to the European market with EU origin Competitive pricing due to lower costs Receive organic premium prices for agricultural commodities from the export market: grain. Enter market with semiprocessed products: potato starch. Modernized food manufacturers

Strengths & Opportunities for Latvia High acreage of certified organic field area Easy access to the European market with EU origin Competitive pricing due to lower costs Modernized food manufacturers Receive organic premium prices for agricultural commodities from the export market: grain. Enter market with semiprocessed products: potato starch. Enter market with private labeled consumer goods.

Kiitos! - Paldies!