The European Market for Tropical Organic Products Salvador Garibay Oragnic market Europe page 1
Content Short project description Development of the Organic Market in Europe The European Organic Market The Organic Swiss Market Characteristics of the Tropical Organic Market Perspectives for some organic tropical products General Remarks of Traders on the Organic Market for Tropical Products Organic market in Europe page 2
European Market Overview for Organic and Fairtrade (with a focus on potential products from Central America) General market perspectives, projected growth, hot market segments Structure of trade channels and trends Market requirements and general market trends Consumer preferences and trends Oragnic market Europe page 3
Quick market scans for organic and fair trade cocoa, sugar, bananas, pineapple juice and mango puree Description of current situation and general market perspectives Market size estimate, structure of supply, growth behavior and potential Indicative market prices Description of trade channels structure Most relevant market requirements and regulations Oragnic market Europe page 4
Development of the Organic Market in Europe The development of the organic market is based in private initiatives («organic market initiatives» ) Until 1980 the organic market was only a niche; organic stores = were the most important sales channels At the beginning: only few products were offered (fruits, potatoes and vegetables). Much later specialty products (fresh organics herbs) were introduce Import of organic tropical products started with coffee, cocoa, spices, tea, and fresh and dry tropical fruits like mango and pineapple Actually: Organic products are widely distributed in the supermarkets The most important products are milk products and vegetables Organic market in Europe page 5
The European Organic Market Sales for Organic Food in European Countries (2003) Germany Great Britain France Italy Switzerland Sweden Netherlands Denmark Austria Belgium Finland Spain Greece Hungary Czech Republic Sum Other European Countries 395 339 323 300 212 144 21 18 6 173 742 420 3'100 1'607 1'578 1'400 Import of organic products: Germany: the biggest importer United Kingdom: the most import dependent France: 40% of total imports are not from EU Holland: international turntable of organic Switzerland: import 100% of tropical products 0 1'000 2'000 3'000 4'000 Mio. Euro Source: Source: Richter and Padel, 2005 Organic market in Europe page 6
The Organic Swiss Market COOP COOP Sources: COOP COOP, Migros, FiBL, GfK COOP Organic market in Europe page 7
Total Sale of Organic Products Mio. CHF % 1200 1056 25,0 1000 946 20,0 800 600 400 582 656 805 15,0 10,0 200 5,0 0 1998 1999 2000 2001 2002 0,0 2003 5-10% Total sales de ventas of organic de productos products orgánicos (Mio. millones CHF) Sfr. Annual Tasas de growth crec. anual rates Organic market in Europe page 8
Market Structure in Switzerland Organic market in Europe page 9
Import of Organic Products in Switzerland (%) Leche y productos lacticos Frutas y hortalizas frescas Cereales y productos de panaderia Hierbas aromaticas y medicinales Frutas y hortalizas procesadas Vino Semillas oleaginosas Flores Frutas deshidratadas y nueces Tejidos Productos cosmeticos Azucar y dulcificantes Caf, Cacao, T Frutas tropicales 0 10 20 30 40 50 60 70 80 90 100 % Fuente: FiBL (estimaciones 2000) Organic market in Europe page 10
Characteristics of the Tropical Organic Market lack of constant availability Non balanced supply-demand: passion fruit, mango, pineapple juice Influencing factors: Crop failure occurs more often Discrepancies in production methods and standards shortage of some organic ingredients The product quality does not meet the standards of the European costumer Low volumes from producers Low service and high cost Organic market in Europe page 11
The Fresh Vegetables Organic Market (1) European consumers prefers vegetables grown domestically. Importation are made only as supplement. The tendency is the importation of the Mediterranean area during the winter. East European countries might play an important role in the future. Organic market in Europe page 12
The Fresh Fruits Organic Market (2) Generally supermarkets has strong interest to complement their assortment with organic exotic fruits (citrus, pineapples, mangos, papaya, coconuts etc.). The European organic market for fresh tropical fruits offers good sales perspectives for growers in tropical countries. Example: the sale volumes of organic citrus is reaching 10-20% annual growth rates. In the case of pineapple the demand will be increased in near future. Organic market in Europe page 13
The Banana Organic Market (3) The market of organic banana still growing in the last years, reaching annual growth rates of about 20%. In Europe, the retail chains still been the motor for the sale of organic bananas. The most important suppliers are Ecuador, Dominican Republic, Peru, Colombia and Brazil. It is expected that the weekly sale volumes of organic banana reaches the 200 containers. Organic market in Europe page 14
The Dry Fruit Organic Market Leading markets for dry fruits are the UK, Germany, France and The Netherlands. Dry fruits are mainly used as ingredients for food processing. For example, as ingredients in breakfast cereals mix. Bakeries and breakfast cereal mixers are one of the largest endusers of organic dry fruits and nuts in European countries. Tropical dry fruits for which the markets are smaller but promising include dried banana, mango, papaya and pineapple. Organic market in Europe page 15
The Organic Sugar Cane Market (5) It is estimated that the sales of organic sugar cane reachs 4000 to 5000 tons for the EU. Organic sugar cane is mostly sale to the processing industry. There is a good demand on the retail sector (Supermarkets). The supply of organic sugar cane has been improved. The market shows an positive development. It is estimated annual growth sale rates of reach 20%. Organic market in Europe page 16
The Organic Juice Market (6) Organic orange juice is the most popular and consumed imported fruit juice in Europe. The leading exporter of organic orange juice is Brazil. There is a strong interest for organic pineapple and mango from supermarkets. The main suppliers of organic pineapple juice are India and Ghana. Germany is the largest market for organic fruit juices (46%), followed by France (16% and the UK (12%). The demand will growth step by step. Organic market in Europe page 17
The Organic Cacao Market (7) Good potential demand of organic cocoa even though oversupply in the market. 2002-2005 estimated growth sales rates of 16 to 20%. Dominican Republic is the leader (14,350 tons). Mexico is doing big steps (9,500 tons). The chocolate industry main costumers. The market wishes organic+fair trade cocoa. The industry is looking to develop cocoa products that can make a story. Organic market in Europe page 18
General Remarks of Traders on the Organic Market for Tropical Products The organic market for tropical products from being a demand-driven market is a supply-driven. The higher the supply, the lower the premiums at all levels (producer, trader), today premiums of less than 15 per cent are more realistic. Who can offer consistent high-quality products and ensure high-quality processing methods can demand better prices. Perspectives are open to those suppliers that can achieve: Continuous investment in quality systems (good quality) Good price Full traceability Upgraded processing (e.g. IQF freezing) On-time delivery (excellent logistics from the supplier) Delivery against product specifications Good customer services Moreover, double labelling (organic+fairtrade) is gaining more and more importance Organic market in Europe page 19