CHANGING MARKETS 2016 - FRUCHTHANDEL Special

FRUITNET MEDIA INTERNATIONAL | DÜSSELDORF | 05.08.2016

chANgINg MARkETS NEW AND chANgINg OPPORTUNITIES ON WORLD MARkETS

• Unexplored potential in Eastern Europe, the Middle East, India and Asia

• Asian markets lead the Global Retail Development Index

• Asia Fruit Logistica: “The key market players come together in Hong Kong”

• Spain: New agreement on peach and plum exports to China

SPECIAL

Special CHANGING MARKETS

TRADE SHOWS & CONFERENCES_

ASIA FRUIT LOGISTICA 2016: “The key market players come together in Hong Kong” ASIAFRUIT CONGRESS 2016: Curtain raiser for the “perishable week” in Hong Kong Premiere for new fresh produce technology conference SMART Horticulture Fresh Produce Forum China: Looking at the latest market trends in China Fresh Produce India 2016: Traditional retail is the key to India Ukraine/Fresh Business Expo: Top rating for agricultural potential

2 4 6 7 11 20

RETAIL_

10 30

Global Retail Development Index: Asia leads the ratings with four of the top five countries USDA Gain Report China: Challenging times for offline retailers

THAILAND_

13

Fruit imports have almost doubled in the last five years

NEW ZEALAND_

Pipfruit NZ: Apple industry back on track

14

EUROPEAN UNION_

Spain: New agreement on peach and plum exports to China Netherlands: Joint promotion campaigns crucial to opening new markets Belgium: A difficult phase for Belgian exports UNIVEG Bulgaria FOOD: Investing in the cold chain Bulgaria: Slow but continuous growth in the banana market Bulgaria: Production of berries on course for growth Slovenia: Port of Koper – the short route to customers in Europe Poland: Growth for Polish exports in new markets Hungary: Imports of tropical fruits are increasing Brexit: “British consumers will not take the hit – additional costs will be absorbed by suppliers” Economic Partnership Agreement with Southern African countries

16 17 18 20 22 23 24 26 27 28 32

UKRAINE_

18

Ukraine: Apple market under pressure

32

IMPRINT

This special report is an insert in Fruchthandel Magazine issue no. 30-31/2016

Offizieller Kooperationspartner

Mitglied

Special Changing Markets As many as 600 exhibitors from 37 different countries are expected this year.

ASIA FRUIT LOGISTICA 2016 ������������������������������ __________________________________________________________

“The key market players come together in Hong Kong” Fruchthandel Magazine spoke to Wilfried Wollbold, Global Brand Manager FRUIT LOGISTICA about the role of ASIA FRUIT LOGISTICA in helping to develop business opportunities in the Asian market.

Fruchthandel Magazine: ASIA FRUIT LOGISTICA has established itself within just a few years as the leading trade show in the Asian region. In which Asian markets do you expect to see the strongest growth in the coming years?

Wilfried Wollbold: ASIA FRUIT LOGISTICA is indeed the fresh produce industry’s most efficient hub for trade with Asian markets. This year at the tenth edition of ASIA FRUIT LOGISTICA we expect to welcome some 10,000 trade visitors. They will be coming to Hong Kong from 75 different nations across the globe. China and Hong Kong obviously have a tremendous appeal, but the primary benefit lies in the fact that visitors can reach all of the relevant Asian markets at a single concentrated event. This enables them quickly to establish new business partnerships in different countries and strengthen existing networks. We expect a further increase especially in the num-

Gérald Lamusse (left) and Wilfried Wollbold

2

ber of visitors from Australia, New Zealand, India, Korea, Japan and Taiwan. We further anticipate ASIA FRUIT LOGISTICA attracting more trade visitors from Southeast Asia, including Indonesia, Malaysia and Vietnam.

FH-Magazine: Do the participating countries and exhibitors at the fair adequately represent the increasing diversification of trade to and from Asia? In other words, which regions would you like to see even more input from in the future?

Wilfried Wollbold: Yes, the product range is very diverse and effectively covers the needs of buyers interested in new products and marketing opportunities. We are expecting as many as 600 exhibitors from 37 different countries. More than one-third of the exhibition space booked represents the Asian region, and another third the regions of Oceania and Europe. Exhibitors from North and Latin America, the Middle East and Africa are also on the increase. A number of German companies have also already registered this year including BayWa AG, Elbe-Obst, GlobalGAP, Hamburg Süd, Obst vom Bodensee and Salemfrucht. I am particularly pleased about the news we recently received from the German Federal Ministry of Food and Agriculture. Next year the ministry’s international trade fair programme will officially support a German pavilion at the 2017 ASIA FRUIT LOGISTICA! I would like to encourage your readers to discover the benefits of being part of a joint German presentation in Hong Kong.

FH-Magazine: The objective of a fair of this kind must be to represent the entire value chain including packaging, logistics, etc. To what extent has this diversification already been achieved at AFL? Wilfried Wollbold: Products and services across the entire value chain are presented at ASIA FRUIT LOGISTICA. This is because the event fulfils one basic condition: The key market players in the global fresh produce industry come together here in Hong Kong – this includes producers,

retailers and buyers from the core Asian markets.

FH-Magazine: AFL has also addressed an increasingly broad range of themes over the years.

What are the special highlights for you at the 2016 edition?

Wilfried Wollbold: This is an exciting topic!

Participants should certainly make even greater use of the wide choice of information available.

A veritable “Perishables Business Week” will be happening in Hong Kong this year. The week begins on the Tuesday before the fair opens with the Asiafruit Congress and its overview of the current Asian trade situation. The Cool Logistics Asia conference on the Wednesday, the first day of the trade fair, will be focussing again on the logistics sector. The new conference, SMART Horticulture Asia, will be held on the Thursday and explores information technology, data standards and technologies in production, logistics, distribution and retail. The informal Business Forum held in the exhibition hall on all trade fair open days will feature further presentations on trade, marketing and technology for visitors.

FH-Magazine: You can’t talk about trade in Asia without mentioning e-commerce. What potential do you see in online retail in the Asian region?

And how will this affect the traditional fresh produce trade and retail?

Wilfried Wollbold: I believe in the creativity and the pioneering spirit of online services in Asia.

Every time I visit Asia I return with new ideas for our business. So I am looking forward to what this year’s speakers have to say. The subject of the SMART Horticulture Asia conference keynote held by Loren Zhao of Fruitday China, is “Consumer 4.0: How Online is the China Market?” Li Haloun of JD.com, China’s leading online direct sales company for fresh produce, will be speaking at the Cool Logistics Asia conference.

FH-Magazine: Companies new to the Asian region find that the business culture there is very different. For some this creates a little uncertainty, although they would like to take greater

Fruchthandel Magazin 2016 account of the Asian markets. How can a trade fair help to break down these barriers?

Wilfried Wollbold: ASIA FRUIT LOGISTICA aims to create not only the best platform for the fresh produce industry in Asia but also provide the necessary ideas and learning opportunities. The three specialised conferences as well as the informal Business Forum on the show floor will give Asia experts and those interested in the region the necessary knowledge to work profitably with people, markets and cultures.

FH-Magazine: You took over from Gérald Lamusse as Global Brand Manager almost exactly one year ago. He was instrumental in developing AFL and making it a success. Looking back at those founding years, what is your personal assessment in 2016? What priorities will you be setting in the future?

Wilfried Wollbold: Global Produce Events GmbH was founded on 26 April 2006 together with its partner Fruitnet Media International. The defined objective was to develop Asia’s leading trade fair for the fresh produce business and serve as a catalyst for growth in this sector in Asia. Both partners have successfully made this vision a reality. Gérald Lamusse and the whole team deserve great credit for this. The goal of the tenth ASIA FRUIT LOGISTICA is to usher in the coming decade. With 15 percent more exhibition space and all eyes on Asia’s growth markets, the conditions are

Trade visitors from 75 different nations across the globe will be coming to Hong Kong.

excellent. Our core task is to sustain this growth while meeting the highest quality standards, to consolidate the networks between the FRUIT LOGISTICA and ASIA FRUIT LOGISTICA teams, and to integrate future fresh produce industry trends in the context of the trade fairs. The newly launched SMART Horticulture Asia conference is just one example of how we are investing in the future. ASIA FRUIT LOGISTICA has also been

Young vegetables need a sunny spot Aromatic fruit and vegetables from the sunny gardens of Germany – now available from Willi Sinn.

Willi Sinn Ltd, fruit wholesalers It makes sense to make Sinn your first point of call for fresh fruit and vegetables or potatoes and onions from Rhineland Palatinate.

Maxdorf headquarters Am Großmarkt 8 D-67133 Maxdorf, Germany Tel. +49 (0) 6237 9782 00 Fax +49 (0) 6237 9782 999 E-Mail info@willi-sinn.de Website www.willi-sinn.de

active in mainland China since May this year with a new conference and expo event, Fresh Produce Forum China. This conference and expo event perfectly complements ASIA FRUIT LOGISTICA and strengthens our customers’ access to business in China. I would like to take this opportunity to thank your readers for their confidence and support and wish them every business success in Asia – now and in the coming decade! 

Sinn y fruit t quali egetables and v

Saarbrücken Branch An der Römerbrücke 17 D-66121 Saarbrücken, Germany Tel. +49 (0) 681 68795 0 Fax Purchasing/Sales +49 (0) 681 68795 29 Fax Administration +49 (0) 681 68795 39 E-Mail info@willi-sinn-sb.de

3

Special Changing Markets ASIAFRUIT CONGRESS 2016 ����������������������������������������������__________________________________________________________

Curtain raiser for the “perishable week” in Hong Kong Leading industry figures have signed up to speak at Asia’s premier fresh produce conference event on 6 September in Hong Kong. Liu Mau-Wah, co-chairman of China’s largest integrated fresh produce business, Joy Wing Mau Group; Lain Jager, CEO of global kiwifruit marketer Zespri; and the chief merchandising officer for Sam’s Club China, Neil Maffey.

These are just three of the high-profile figures lined up to speak at this year’s ASIAFRUIT CONGRESS in Hong Kong.

T

aking place the day before ASIA FRUIT LOGISTICA, Asia’s premier fresh produce conference event returns to AsiaWorldExpo on 6 September, with even more topics on the programme to cover the fast-developing Asian markets. This year’s Congress kicks off with a keynote session focusing on the future of the Chinese market. China has quickly emerged as one of the most attractive and lucrative markets for global fresh produce suppliers. But a recent slowdown in the economy has prompted questions over its future trajectory. On hand to explain what is happening at a consumer level in China will be Youchi Kuo, who leads Boston Consulting Group’s (BCG) China Center for Customer Insight. Kuo will set the scene for the session with her expert perspective on the evolution of China’s consumer market, drawing on BCG’s landmark report – The New China Playbook: Young, Affluent and E-savvy Consumers will Fuel Growth.

A panel of senior industry executives will then join Kuo to discuss the implications of these changes for China’s fresh produce business – and the future market outlook.

Golden Wing Mau and Joyvio – two leading players in China’s fresh fruit business – joined forces at the end of last year to create the country’s ‘largest integrated fresh fruit business’ – and co-chairman of the group Liu Mau-Wah will be on the panel to share his unique insights.

He’ll be joined by Neil Maffey, chief merchandising officer of Sam’s Club China, which is fast carving a niche among high-end consumers in the country, and Hu Chunlei, general manager of

4

This year’s Congress kicks off with a keynote session focusing on the future of the Chinese market.

the fresh business at Tmall, part of China’s largest online retailer Alibaba.

fer as a grower and exporter. At the opposite end of the spectrum, the Japanese market is also the focus of a Breakout Session, with Hisao Takeda of Yamano & Associates and Satoru Aoyama of Breakouts offer more choice AISS Corporation among the speakers to outline Delegates to ASIAFRUIT CONGRESS can also the opportunities and challenges in this large, choose from a wide range of afternoon Breakout complex and changing market.

Egypt has already made significant in-roads Sessions, which go into more detail on specific subjects. Myanmar’s emergence from economic as a supplier into Asia with citrus, but what isolation has provided a rare opening for compa- further potential is there to expand its presence?

Sara Salama, commercial nies to reach a fledgling director at major Egyptian consumer market. In Future supplies for Asia grower-exporter Pico, and a session spotlighting Neil Barker of Australiathis last untapped ASEAN market, Jasper Ong of Myanmar Golden based importer-exporter BGP International, will Produce will explain what the country has to of- provide their supplying and procurement perspectives respectively.

Convenience is a hot trend in Asia, as underlined by the rapid growth in c-stores and smaller retail formats across the region. A panel of experts including CK Lai of Hong Kong-based produce distributor and fresh-cut specialist Good View Group, Jan Doldersum of global seed company Rijk Zwaan and Hamish Robison, operations manager for Zespri Japan, will share their expert advice on how marketers can better service this sector.

Asia also presents potentially fertile markeThe conference ting ground for some of the many branded appserves as les and club varieties entering the global marketthe perfect place. In a session discussing the future for apple brands in Asia, Pink Lady’s Garry Langford and primer to Ryan Au will discuss their strategy for developing ASIA FRUIT the distinctive apple in Asia.

LOGISTICA.

Special Changing Markets The closing General Session for this year’s ASIAFRUIT CONGRESS – Future supplies for Asia – analyses Asia’s ever-increasing demand for safe, high-quality fresh produce, and asks where the supply will come from to meet that demand in the future. CEO of Zespri Lain Jager will be on-hand to discuss how the world’s leading kiwifruit marketer is balancing the ever-expanding demand from Asia with its well-established business in other global markets. Joining him on the panel discussion will be Craig Stauffer, CEO of US-based global grower-marketer Vanguard International, which has been marketing and selling fresh fruit and vegetables in Asia for more

than 25 years and last year joined forces with New York-based agri-focused investment fund Blue Road Capital to drive its global expansion.

Get the best access As well as getting high-quality information and contacts to develop new business in Asia, ASIAFRUIT CONGRESS delegates receive a three-day access pass to ASIA FRUIT LOGISTICA, including the Welcome Reception on the evening of 6 September. The conference serves as the perfect primer to ASIA FRUIT LOGISTICA, helping delegates to work out who and what to focus on at the

ASIA FRUIT LOGISTICA 2016 __________________________________________________________

Premiere for new produce technology conference SMART Horticulture The International Federation for Produce Standards (IFPS) teams up with Asia Fruit Logistica for the first-ever conference for Information Management, Standards & Technology for Asia’s fresh fruit and vegetable sector.

I

nformation exchange is the basis for a safe, efficient, effective and durable supply chain for fresh produce. Supply chain information from farm to fork is thus the foundation of the international fresh produce industry. In this context, standards for food safety, product-identification (such as PLU) and supply chain information management are essential. To help shape the future of information exchange in fresh produce, the International Federation for Produce Standards (IFPS) is supporting ASIA FRUIT LOGISTICA with the launch of SMART Horticulture Asia: a new, high-level, Asia-wide business forum that focuses on information management, standards, and technology.

Within IFPS, trade, growers and standards associations representing the fresh produce industry in South America, North America, Europe and Oceania work together to develop and maintain product identification and chain information management standards for the global fresh produce industry.

“Asia has a huge consumer market and is also a very big producer of fresh fruits and vegetables”, said Ed Treacy, chairman of IFPS, “IFPS is open for collaboration with growers, traders, retailers and their associates in Asia to share knowledge and information regarding standards and best practices for the fresh produce supply chain. SMART Horticulture Asia in Hong Kong will be a unique event that builds international networks for fresh produce standards.”

The new one-day conference will take place on Thursday 8 September 2016 during ASIA FRUIT LOGISTICA, Asia’s leading trade show for the fresh fruit and vegetable marketing which 6

takes place on 7-9 September 2016 at Hong Kong’s AsiaWorld-Expo. During SMART Horticulture Asia, so-called disruptive technology and information exchange are explored as the basis for a safe, efficient, effective and durable supply chain for fresh produce.

Programme Speakers from five different continents will give their opinion on how the cultivation and supply of fresh produce is getting SMART. Prof. S. Sukkarieh of the Australian Centre for Field Robotics

trade show, which runs from 7-9 September. Register online at the ASIA FRUIT LOGISTICA ticket shop: www.asiafruitticketshop.com/afl2016/ ASIAFRUIT CONGRESS forms part of rich programme of conference events at ASIA FRUIT LOGISTICA’s perishable week in Hong Kong. Taking place on the first day of ASIA FRUIT LOGISTICA is COOL LOGISTICS ASIA, the conference dedicated to perishable logistics. New for 2016 and convening on the second day (8 September) is SMART HORTICULTURE ASIA – the first-ever conference for information management, standards, technology and robotics for Asia’s fresh produce sector. 

(University of Sydney), an international expert in the research, development and commercialization of field robotic systems, will provide an insight into the horticultural farm of the future. After lunch, four breakout sessions will be held with a focus on crucial aspects of information management in the fresh produce value chain: SMART Cultivation, SMART Supply, SMART Customer and SMART Information Exchange.

The afternoon plenaries will focus on how the use of new disruptive technology is changing business models in horticulture. Mr. L. Zhao, Founder of Fruitday, will show how their company is developing “new” added value in China’s online retail markets with fresh fruit.

About the organizer SMART Horticulture Asia is owned by Global Produce Events GmbH, organizer of ASIA FRUIT LOGISTICA, the only annual trade show for the fresh fruit and vegetable business in Asia, and is powered by Frug I Com, organizer of the EU Fresh Info Forum & Round Table which takes place every year in the Netherlands. Frug I Com responds to changes in sector demand to grow the use of electronic information in the fresh fruit and vegetable supply chain. The partners of Frug I Com are Frugi Venta (trade and processing), the Dutch Produce Association (growers), Fresh Produce Center, and GS1 Netherlands (standardization).



Prof. S. Sukkarieh of the Australian Centre for Field Robotics (University of Sydney) will provide an insight into the horticultural farm of the future.

Photo: Frug I Com – Fotostudio Vlekke

Fruchthandel Magazin 2016 FRESH PRODUCE FORUM CHINA ����������������������������������������������______________________________________________________

Looking at the latest market trends in China Fresh Produce Forum China, the new annual conference and exhibition event for China’s fresh fruit and vegetable business, was held for the first time in Chengdu from 31 May -2 June 2016. Organised by Asiafruit Magazine and Asia Fruit Logistica, this annual event drew 204 delegates from 14 different countries to explore the opportunities in the fast-growing Chinese market.

S

outhwest China – centred on Chengdu and Chongqing – is China’s new growth hotspot. Since 2008, mega-city Chongqing’s population has edged up by 1.7m to a staggering 30m. Chengdu’s has swelled by some 25 per cent, from 11m to 14m. The growth in population and income levels – underpinned by China’s Go West policy – has driven demand, according to Li Yamao, southwest China regional manager for Joyvio-Golden Wing Mau, who made the opening presentation at Fresh Produce Forum China.

Li said the time it takes to truck product from east coast entry ports of Guangzhou and Shanghai to the west has almost halved over the past decade. It used to take 50 hours in 2008.

Now it’s around 30 hours – and shipping cycles are getting shorter all the time. But there’s much more development to come. “From Chongqing, we’re trying to expand to many other second, third and fourth-tier cities in the region,” said

The new annual event in China drew 204 delegates from 14 different countries.

Deng Hongjiu of Chongqing-based importerdistributor Hongjiu Fruits. “Chongqing is like a bridgehead.” Chongqing’s river port, which has

customs clearance capability, offers potential to bypass the many layers of distribution via the east coast – and get imported fruit into market

together with 同期举办

Asia’s­fresh­ produce­ trading­hub­ AsiaWorldExpo, Hong Kong 亚洲新鲜 果蔬行业 贸易中心 2016年9月 7– 9 日

7­– 9­Sep­2016

AsiA Fruit LogisticA AFL2016_186x130_Basisanzeige_RZ.indd 1

亞洲國際 博覽館, 中国香港

www.asiafruitlogistica.com 04.11.15 10:41

7

Special Changing Markets much quicker. New rail links along the ‘new silk first – the fruit has to be premium grade. Their route’ connecting both Chongqing and Chengdu other key concerns are food safety and health to Europe will open up the west of China for and nutrition,” said Li. Sichuan Province is a major fruit-growing European suppliers, said Deng. The growth rates will be staggering and could see the west over- region. Citrus, kiwifruit and berries are all grown take coastal areas in the future, he believes. “Up in significant volumes locally, and suppliers are moving to capitauntil now, the import trade has been domilise on consumers’ China’s direct fresh increasing appetite nated by two major trafruit imports have increased four-fold with graded and ding ports – Guangzhou branded offerings. and Shanghai – but this over the past decade But that’s not inhiwill change,” said Deng.

He sees key distribution biting the opportuhubs forming around the country to serve regio- nities for imported fruits – kiwifruit, berries and nal clusters. Guangzhou will focus mainly on the table grapes to name a few.

China’s direct fresh fruit imports have insouthern part of China; Shanghai will primarily serve eastern China with Jiaxing at the core; the creased four-fold over the past decade to reach southwest will be covered by Chongqing/Cheng- 3.8m tonnes last year, revealed Fresh Intelligence du; the central region by Zhengzhou; and the Consulting’s Wayne Prowse. More than 70 per north by Beijing-Shenyang (and far north by cent of the volume is coming from South East Dalian). Shanghai and Guangzhou will become Asian countries (the Philippines, Thailand and more first-tier wholesale markets. “The change is Vietnam) supplying tropical fruits, such as banainevitable,” he said. nas, dragon fruit and durian. These products are especially popular in southwest China, so much so that many local distributors and buyers have Getting the best for the west established their own sourcing and packing opeConsumer behaviour and demands have chan- rations in South East Asia.

Tropical fruit might be a big volume trade, ged in southwest China. “People here used to want cheaper fruit at lower prices,” said Joyvio- but that’s not to say there aren’t opportunities to GWM’s Li. “As we moved into the 1990s and forge a premium position within the commodi2000s, their incomes and quality of life impro- ty-led category. Take Taiwan, whose pineapples ved. The productivity and output of local fruit have become very popular, according to Joyvioincreased. A push to make these fruits bigger and Golden Wing Mau’s Li. prettier led to problems with food safety due to excessive chemical and pesticide usage,” he exp- New import sources lained. Consumers got scared. The situation has improved with local production, but still consu- China’s fruit import market is changing as new mers are sensitive. This has spurred demand for suppliers and products clinch access. Italy is imported fruits. “Consumers now put quality already an established supplier of kiwifruit, but

Paolo Bruni, president of CSO Italy, was at Fresh Produce Forum China to discuss plans to ramp up its presence with Freshness from Europe – a new three-year campaign to promote Italian fruit in a range of export markets. Co-funded by the EU, Italian government and CSO Italy – the campaign has a budget of some 5.3m Euros.

Delegates to Fresh Produce Forum China were prospecting opportunities for products as diverse as Indian grapes, Spanish stonefruit and Costa Rican pineapples.

Berry lovers and online consumers Berries are becoming a big deal in China. “We believe at Driscoll’s that China is the biggest fresh berry market opportunity in the world today,” said the group’s VP for the Asia-Pacific region, Jae Chun. So much so that Driscoll’s has established its own plantings in Yunnan province. It’s no easy feat. There are big challenges throughout the supply chain – whether it be protecting your IP, finding clean land and water, managing the cold chain or winning the trust of Chinese consumers who don't think domesticallygrown fruits are safe. But

Co-founder Loren Zhao of leading Chinese fruit e-tailer Fruitday has built its business on high-profile brands of imported fruits.

8

Ripe-and-ready avocados are becoming increasingly popular in China.

importance of fresh produce to the future of its online retail business. Using his smartphone, he gave a live demonstration of the ease of buying fresh fruits online in China. “We’re able to make deliveries in firsttier cities and most second-tier cities the same day if you order Driscoll’s has a clear mission. “We want to bring before 11am,” said Meng. Fresh produce is a very the freshest possible product to market,” Chun challenging business for e-commerce compaexplained. “For us, it doesn’t matter whether it’s nies, Meng acknowledged, but he said JD.com domestic or imported, if we can get the quality was confident of success in the sector. The group right, the consumer will reward it.” has been investing heavily in the “last-mile deDriscoll’s is not the only company seeking livery”, with half of its 120,000 staff focused on to create a new quality benchmark for domesti- this part of the business, as it sees service and cally-grown fruits. Leading Chinese fruit e-tailer reliability as keys to winning over consumers.

China’s fresh Fruitday has built its food retail market is business on high-proFresh produce is a very not a war between file brands of imported challenging business for e-commerce bricks-and-mortar fruits. Now it is building and e-commerce a brand of domesticallycompanies channels. Fresh Progrown oranges with guaranteed sweetness – duce Forum China’s Mr Orange. The e-tailer has aligned with packers retail panel – featuring executives from Itoof domestically grown citrus who have invested Yokado, Pagoda, Benlai and Jiuye Supply Chain in infra-red grading technology to provide fruit Management – agreed that China’s multiple rethat can deliver its brand promise, and price pre- tail channels can co-exist and complement one miums. “We have a lot of catching up to do with another. Liu Youcai of online retailer Benlai said international companies in terms of standardisa- his sector had much to learn from retailers like tion, capital, technology and so on. But the gap Ito-Yokado and Pagoda, particularly when it cais not as wide as we imagined,” said Fruitday’s me to handling and selling fresh produce. Jiuye’s co-founder Loren Zhao.

Cory Guo said ‘offline retailers’ had an overwhelDriscoll’s Jae Chun also underlined the im- ming advantage in selling fresh produce, adding portance of IP protection and plant breeders’ that that online represented more of marketing rights (PBR) for China’s production to flourish. vehicle for telling a story and building a brand.

“More protection means more innovation. Lack of PBR is a disincentive for any company to Produce spend grows despite innovate [or invest],” he said. “China needs in- downturn vestment in rural areas as 360m of its people are still poor by World Bank standards, and many of Overall spending on fresh produce will continue them are in the areas where we’re working,” he to grow sharply in China, even though the ecosaid. “We want to develop small Chinese growers, nomy has slowed down. That’s the opinion of Liu give them economic opportunities and help Youcai of online retailer Benlai. “Consumption is them to become business owners.” being transformed,” he said. “Chinese consumers are pursuing a higher quality of life and that is reflected in the way they buy – it’s no longer just The changing retail channel mix about feeding themselves; it’s quality driven,” he Clark Meng, global sourcing manager at e- said. Liu also sees a generational shift. “Previouscommerce giant JD.com, explained the critical ly, consumers were very cautious and preferred to

save their money, but younger consumers spend much more freely. This is a mega-trend and it’s hard to change.”

Simon Limmer, Zespri’s chief operating officer, put some numbers on the consumer market expansion, noting that incremental growth in Chinese private consumption over the next five years will equal a market 1.3 times bigger than Germany or the UK to reach US$6.5 trillion by 2020 (from US$4.2 trillion). Consumer research suggests that nothing is likely to show stronger growth than fresh fruit, he said.

China will overtake Japan this year to become the New Zealand kiwifruit marketer’s top market. As the home of the fruit and the world’s largest producer, China is gearing up to capitalise. With many young plantings yet to come online, China’s production could double in the future to reach around two-thirds of global production, according to Zespri’s analysis. Limmer said the local industry is at a critical juncture in its development as it moves from a fragmented smallholding base to a modern, sophisticated and well-organised industry.

Green light for avocados It's taken a while for avocados to gain consumer acceptance in China, but there are signs of a breakthrough. Imports have grown sharply off a low base, rising by more than 160 per cent the last two years to reach 15,000 tonnes in 2015. Mexico remains the key supplier, and ProMexico’s Felipe Garcia was on-hand to fly the flag at Fresh Produce Forum China. But Peru has also just begun shipping to China, and PromPeru was promoting the Andean nation’s offering at the expo. At the Welcome Reception to Fresh Produce Form China, Jim Provost of Lantao explained how the importer’s move to bring ripe-and-ready avocados to Chinese consumers together with major global supplier Mission and Chinese fruit retailer Pagoda was propelling sales.

He also announced the company’s opening of an office in Kunming, adding to its recent expansion to Chengdu. Expect to see more avocados heading out west in future.

Avocados are starting to catch on, but there is potential to introduce a range of new products to Chinese consumers, such is the appetite for novelty. Rockit apples – the miniature apples packed into tubes as a premium snack food – garnered interest on the shelves of retail stores visited at Fresh Produce Produce Forum China.

Ian Simmons of ITS Assoc/Fresh Concepts Asia was at the event to introduce Love Beets, the branded baby beetroot that’s available in a range of value-added formats. With independent research currently being completed to confirm the health benefits of beetroot, Simmons is hopeful there will be a potential nutritional punch to any future marketing campaign.  9

Special Changing Markets GLOBAL RETAIL DEVELOPMENT INDEX ________________________________________________

Asia leads the ratings with four of the top five countries In its annual report titled “Global Retail Expansion at a Crossroads”, management consultants and trade analysts A.T. Kearney rank China at the top of the 2016 Global Retail Development Index. India’s considerable market potential, its fast rate of growth, improved regulatory environment, and the ease of doing business there, have promoted it to second place in the rankings.

T

he 2016 Global Retail Development Index (GRDI) marks the 15th annual edition of the report. Over the past 15 years, developing markets have seen tremendous growth, both in terms of population, which has grown 21 per cent to 6.2 billion, and in terms of retail sales, which have increased 350 per cent. They now account for more than half of total global retail sales. The GRDI ranks the top 30 developing countries each year for retail investment worldwide. It analyses 25 macroeconomic and retail-specific variables to help retailers devise successful global strategies to identify emerging market investment opportunities.

The study is unique in that it not only identifies the markets that are most attractive today, but also those that offer the greatest potential in the future. Hana Ben-Shabat, partner at A.T. Kearney and co-author of the study, comments: “Despite China’s slowing economic growth, the GRDI’s top-ranked country this year remains one of the most attractive global retail markets. The economy is gradually shifting from an investment-driven model to one driven by consumer consumption. The growing middle class coupled with strong demand from inland and lower-tier cities and the loosening of the one-child policy will continue to drive growth over the next 10 years.” Mike Moriarty, A.T. Kearney partner and

another co-author of the study, says: “India’s high ranking is driven by GDP growth, improved ease of doing business, and better clarity regarding FDI regulations. India is now the world’s fastest-growing major economy, overtaking China. Retail demand there is being fueled by urbanization, an expanding middle class, and more females entering the workforce.”

Asia Asia is the regional winner overall in 2016, with four of the top five countries in the Index — China (#1), India (#2), Malaysia (#3), and Indonesia (#5) – all due to a combination of large populations and high levels of growth. The official launch of the ASEAN Economic Community (AEC), which has created a 2.6 trillion USD market with a population of more than 622 million, is an important milestone for trade, although implementation will be a long process. The TransPacific Partnership (TPP), if ratified, could also boost GDP in several Asian countries, including Vietnam (#11) and Malaysia (#3). E-commerce continues to grow at rapid rate in Asia, rising 35.7 per cent in 2015 to reach 878 billion USD. Asia is now not only the largest e-commerce market, but it also holds the majority share of total global online sales (52.5 per cent).

The launch of the ASEAN Economic Community (AEC) is an important milestone for trade.

Central Asia and Eastern Europe Economic growth has flattened out in the region and currencies have declined in value, creating problems for mass-market retailers and causing leading grocery retailers to focus on smaller formats. Turkey (#6) rises into the top 10 of the GRDI this year thanks to solid growth and a young urban population. However rising unemployment, limited disposable income, and recent security challenges are threatening its broader retail development. Despite the plunge in oil prices, Azerbaijan (#10) has remained a luxury hot spot as a result of its fast-growing tourism sector.

In Russia (#22), the economic turmoil continues, but a weak ruble has boosted some sectors, particularly the luxury market.

Middle East and North Africa The MENA retail market has generally fared well in this year’s index, with two of the large Gulf economies ranked among the top 10, and Egypt (#30) opening up as a new opportunity for retail investments. Despite challenges in the United Arab Emirates (#7), where tourism has slowed and the market is reaching maturity, and Saudi Arabia (#8), which is reeling from depressed oil prices, absolute retail sales have nevertheless grown over the past year. With the expected stabilization of Egypt in the medium term, the market there offers access to a large and still relatively fragmented retail market. Many strong local retailers already have moderate expansion plans in the region, but foreign players are becoming a little more reticent about opening new outlets.

Latin America

Due to a combination of large populations and high levels of growth, Asian countries like Indonesia score well in the ratings.

Photos: Carrefour

10

Although Latin America has fewer representatives at the top of the ranking this year, the region remains a vibrant and exciting retail investment opportunity. Mexico and Chile have moved out of the top 30 in the GRDI ranking due to mar-

ket saturation. In contrast, Peru (#9) moves into the top 10 as a result of free trade stimulus and steady growth, with retailers expanding into emerging neighborhoods and secondary cities.

Brazil’s position (#20) continues to fall in the rankings with the recent boom market suffering the continuing impact of eroding political and economic conditions. Retailers in the region are thus adapting by adjusting store formats in large cities, investing in promotions, and seeking out relatively untapped markets with steady GDP growth, such as Paraguay (#25) and the Dominican Republic (#17).

Sub-Saharan Africa This region’s massive potential is reflected in the six Sub-Saharan African countries now ranked

Brazil’s position (#20) continues to fall in the rankings with the recent boom market suffering the continuing impact of eroding political and economic conditions.

in this year’s GRDI. Opportunities for retailers continue to open up as household incomes rise, countries become urbanized, and the rising middle class embraces organized retail, demanding more and better services. However, informal trade still dominates and expansion into the region remains far from easy. Retailers are experiencing different levels of success in different markets. Nigeria (#19) has a population of 180 million people, but with a challenging business environment and a deeply rooted informal trade market, it remains a high-risk, high-reward bet.

South Africa (#27) on the other hand is large and highly urbanized, but already has strong local players and a saturated market. 

FRESH PRODUCE INDIA 2016 _________________________________________________________

Traditional retail is the key to India

fresh produce offer, while higher rents in tierone cities are impeding their expansion.

Understanding traditional street vendors and ‘mom-and-pop’ stores is vital to reaching India’s fast-expanding consumer market, delegates at Fresh Produce India 2016 heard. Organised by Asiafruit Magazine in association with The SCS Group, Fresh Produce India attracted more than 230 delegates from 20 countries to Mumbai’s Trident Nariman Point Hotel on 26-27 April.

India’s emergence as an import market

U

nderstanding the local market and recognising the importance of traditional retailers in modern India was one of the key takeaways from the event, with Parth Karvat, director of importer Yupaa International, offering an insight into better ways to service India’s savvy shoppers. “Fruit stalls are still an important part of fruit sales in India. They’re small spaces, with good displays and they keep the overhead costs low – it’s a very efficient business model,” Karvat explained. “Modern retail has not been so successful in penetrating a lot of consumers in India, with road side stalls still an effective and important way of selling fruit.”

Zespri India’s Ritesh Bhimani and Adani Agrifresh’s Srinivasa Ramanujam reiterated this

The opening session of the event looked at India’s emergence as a market over the past ten years, with Tonie Fuchs of Capespan Group, point, highlighting some of their own examp- Stefano Iorini of Memag Trading, Pankaj les of developing promotions and marketing Khandelwal of INI Farms and Dr Sudhanshu of material specifically for the ‘mom-and-pop’ Apeda joining Fruitnet Media MD Chris White to reflect on devestores and street vendors that still serlopments in imports, India has emerged as exports and consumer vice much of India’s a major apple behaviour in India. daily fruit and veIn the past decade, getable needs. The importer India has emerged as dominance of this a major apple imporso-called ‘traditional retail trade’ is built on generations of trust ter, now ranking as the largest in Asia, and the between the vendor and the consumer, they eighth largest in the world. While the US and noted. While modern supermarket retailers are China have tended to dominate the market slowly growing their market share, they still with supplies of Red Delicious and Fuji apples have a long way to go to develop cold storage respectively, there has also been a diversifiand logistics systems and to build a compelling cation of both supply origins and varieties in 11

Special Changing Markets recent years.

“The growth in availability of products over the past two years has been amazing. Even street vendors in rural villages are now selling four different varieties of apples – the breadth of products available in the last two years alone is amazing,” said Pankaj Khandelwal of INI Farms. India’s growing importance in the global fresh produce business was further highlighted by the strong international presence at the show.

Minister-president of Flanders Geert Bourgeois opened the Cocktail Reception and promoted the high-quality apples, pears and other produce that Belgium has to offer, while Mumbai-based importer IG International launched its own brand of kiwifruit at the event – IGKiwi – in the presence of Jaime Gonzalez, Chile’s counsellor for agricultural affairs in India and Carolina Vasquez, the Chilean trade commissioner.

Insights into retail, technology and consumer trends Concurrent workshop sessions each day offered delegates insights into retail, technology and consumer trends. John Baker, CEO of Produce Marketing Australia, led an interactive retail workshop session on fresh produce merchandising, which involved leading retail executives Saikat Sarkar of Future Consumer Enterprise and Maneesh Dumbre of Hypercity. K Ramakrishnan of consultancy group IMRB/KantarWorldpanel discussed the latest trends in Indian consumer behaviour while Seshu Kumar of the country’s leading online grocery retailer Big Basket charted some of the new disruptive channels for reaching out to consumers.

Fresh Produce India attracted more than 230 delegates from 20 countries to Mumbai’s Trident Nariman Point Hotel on 26-27 April.

The event concluded with a retail tour of south Mumbai’s famous retail market, Crawford Market, as well as organised visits to leading supermarket outlets Hypercity and Star Bazaar. India’s new season Alphonso mangoes took centre stage in promotions at each store.

A showcase for new products A wide range of international exhibitors took the opportunity to showcase their offerings to the

fast-developing Indian market. This year’s event featured the largest Fresh Produce India Expo yet, with exhibitors including AVI Global Plast, Asia Fruit Logistica, BillerudKorsnäs, Fruit South Africa, IDH The Sustainable Trade Initiative, IG International, Maersk Line, Maf Roda Agrobotic, PackoLabel Systems, Plant & Food Research New Zealand/Pipfruit New Zealand, USA Apples, Virginia Dept of Agriculture, VLAM and the Washington Apple Commission.

Since launching in 2007 in Hyderabad, Fresh Produce India has cemented its position as the

Modern supermarket retailers are slowly growing their market share annual meeting point for India’s fast-growing fresh fruit and vegetable business. This year the event moved to a new two-day conventionstyle format with an enlarged expo, plenary conference sessions and an array of workshops giving delegates more time to network, and more choice of subjects on the programme.

Fresh Produce India 2016 was sponsored by some of the leading names in the local and international trade, including VLAM, Capespan, Fruit South Africa, Fruit Logistica, IDH The Sustainable Trade Initiative, the Dutch Embassy, IG International, SuriAgro Fresh, PackoLabel Systems, the US Apple Export Council, FROM and the Washington Apple Commission.

Gabrielle Easter India’s growing importance in the global fresh produce business was further highlighted by the strong international presence at the show.

12

Fruchthandel Magazin 2016 THAILAND ���������������______________________________________________________________

prices and a reduced competitiveness for Thai fruit on international markets.

Although Thailand grows large quantities of fruit for its own domestic market, it is also showing an increasing appetite for imported fruits. According to a recent USDA report, imports of fruit into Thailand have almost doubled during the Thailand is one of the most important producers of tropical fruit in Southeast last five years. The main driving force apparently Asia. Although most of the fruit produced there is consumed on the domestic is growth in the general level of consumption due market, at least 30% is exported. The main export markets include China, Indoto changing consumer habits and a rise in availanesia, Malaysia, Laos, Vietnam, Singapore, Taiwan, Japan and Korea. Canada and the USA are major customers for frozen fruit from Thailand. ble income and spending. From April to June, domestically produced fruit is in season and lower prices inhe six main Thai fruits according to levels of evitably lead to a decline in the production are mangoes, of sales of imported products. mangosteens, guavas, pineapHowever major supermarkets continue to offer a special fresh ples, coconuts and bananas, fruit section all year round esaccounting in total for almost 8 million t annually. The singpecially to satisfy demand from middle to higher income conle most important fruit is the mango with an annual prosumer groups. Domestic fruit is marketed through middlemen duction of more than 3 milliat the auctions and via the large on t. Among the major export fruit markets in Bangkok. Remarkets for fresh mangos are Malaysia, Hong Kong and Sintailers generally buy their fruit from the wholesale markets. gapore, with the Netherlands, The main exporters of fresh the UK, Canada and France all fruit to Thailand are China and importing canned mangoes.

Thailand is one of the most important producers of fruit in Southeast Asia. the USA. Products include appAccording to a report from Thailand’s ministry of commerce in May Challenges for exports and imports les, grapes, cherries, other stone fruit and berries.

2016, there has been a recent 20% fall in fruit From the EU, Thailand imports mostly apples and production in the country caused by drought. Besides the weather, fruit producers in Thailand kiwis (including re-exports). European fruit exHowever, because of increasing demand for are facing further challenges such as the correct ports to Thailand have increased in recent years in Thai fruit in overseas markets, especially in Chi- use of agrochemicals, inadequate or outdated line with the general rising demand for imported na, prices for the main fruit products are said production technologies, inefficiencies in post- products. In terms of exports from Thailand to to have risen by up to 100%. Farm-gate price harvest handling, a lack of modern storage fa- the EU, the main products are coconuts, pineapof durians, for example, jumped from 35 to 70 cilities as well as modern packing and handling ples guavas, mangos, mangosteens and melons.

Baht/kg and the price of rambutan increased equipment. A further problem for fruit exports Coconuts take the largest overall share at 44%, from 34 to 52 Baht/kg compared with the same are transportation costs. Since most are shipped with total coconut imports rising by 86% in 2015 period last year. by air, higher freight costs are reflected in higher compared to the year before. Dr. Vera Belaya

Fruit imports have almost doubled in the last five years

Photo: Dr. Maryna Hahlbrock

T

EU fruit trade with Thailand (in tonnes) Imports

Coconuts, fresh or dried Bananas, fresh or dried

Exports

2014

2015

Change 2015/2014 in %

2014

2015

Change 2015/2014 in %

2,589

4,806

+86%

39

52

+33%

104

114

+10%

-

-

-

Guavas, mangoes and mangosteens, fresh

1,131

1,161

-14%

6

-

-

Pineapples, fresh

1,335

949

-29%

2

14

+600%

209

69

-67%

-

-

-

Citrus fruit, fresh or dried Grapes, fresh or dried

3

100

+3,233%

-

-

-

Melons and papayas, fresh

558

630

+13%

--

-

-

-

-

-

5,509

5,955

+8%

Apples and pears, fresh Kiwis, fresh Durians, fresh Other

-

-

-

574

742

+29%

213

177

-17%

-

-

-

1,349

1,195

-11%

-

-

-

Source: European Commission

13

Special Changing Markets PIPFRUIT NZ �������������______________________________________________________________

Apple industry back on track After years of struggling, the New Zealand apple industry is back on track. New varieties and new markets have brought the sector back on the path to recovery.

This year’s export volumes came to 351,390 t of apples – one of the highest export volumes in recent years. Despite some losses in the Nelson region caused by hail at the end of 2015, New Zealand saw a bumper crop of nearly 561,000 t. Fruchthandel Magazin asked the industry body Pipfruit NZ about the sector’s future strategy.

A

ccording to Alan Pollard, CEO of Pipfruit NZ, the increase in volumes is due to the level of investment in the past years as well as improved orchard management and marketing. Speaking at the beginning of the season, he said he expected an export target of 700 Mio NZ-Dollars, or about 5.5 per cent more than in 2015. And more is yet to come: “We are now well ahead of realising our goal to become a billion dollar industry by 2022,” he said. Gary Jones, business development manager at Pipfruit NZ explained to Fruchthandel Magazin in more detail how this will be achieved.

Fruchthandel Magazine: How are exports shaping up this year? Do you see a lot of differences in the flow of produce to overseas markets?

Gary Jones: Altogether we are looking at about the same export volumes to Europe as in the past years. Asia, Middle East and North America are where we will grow our volumes. Demand is particularly strong across Asia and North America this year but it’s mainly Asia and Middle East that are driving volume growth. New Zealand

will continue to provide top quality off-season fruit to EU and UK but growth will be moderate and only in New Zealand’s exclusive varieties FH-Magazine: As far as we know there has been quite a shift away from older varieties such as Braeburn to newer club varieties. What is the position today? Are there any major changes compared to last season?

Gary Jones: Growth will continue to lie in our exclusive varieties and we are looking at a con-

A bumper crop has been followed by a growth in export volumes this season. Here an orchard of the company Energiefruit.

Photo: Global Fruit Point

14

siderable decline of volumes especially for Braeburn. Here volumes have dropped by about half since 2007 and in 2015 this trend has continued.

Volumes of Cox Orange are also slightly lower than in previous years. At the same time we can see a steep rise in New Zealand-bred varieties such as Jazz™ and Envy™, as well as in the Pacific range, volumes of which are continuing to grow.

Envy™ is one of the fastest growing varieties, but we are also looking at an increase in Gala volumes.

FH-Magazine: Those are varieties that are popular in Asia, and the region has already developed into an important market for the global fresh produce trade – especially for New Zealand because of its proximity. Could this mean that in future there will be lower export volumes from New Zealand available for the European and US markets?

Gary Jones: That is not going to happen. But growth there will not be as strong as it is Asia and demand will be lumpy. This year the US is itself short of stock for example, that’s why the demand from there is unusually high.

FH-Magazine: What is the current situation in Asia – particularly in respect of trade agreements with countries in the region? How have export volumes to these markets developed?

Gary Jones: FTA’s are important, but it is equally important to meet the very challenging phytosanitary requirements set in Asia. New Zealand has the Apple Futures production programme that can produce fruit for Europe which consistently meets the very tough private The level of residue standards of European production retailers and at the same time of older meet the very tough regulatovarieties like Braeburn ry quarantine requirements of Asian countries. continues to FH-Magazine: New Zealand fall. producers are still struggling with the strong NZ-Dollar – especially compared to the Euro. That makes Europe a less desirable market for New Zealand produce. Does this have an impact on volumes produced and exported to European markets? What are your expectations for the future?

Gary Jones: There has been some relief in this area over the past 20 months. We have done quite well with a high exchange rate. We are very focused on the customer and on getting the right fruit to consumers in every market. We have delivered that better than any other supplier. Consumers remember their experience and return for more. Retailers know this. ric

in cooperation with

F RUC H T H A NDEL MAGAZINE

Special Changing Markets SPAIN �������������������______________________________________________________________

New agreement on peach and plum exports to China On 6 July 2016, a decision eagerly awaited by Spanish exporters was made public: China had finally authorised exports from Spain of plums and peaches – including nectarines, paraguayos and platerinas. The news was well received, especially by the companies that had worked hard to meet the demanding standards of the new protocol.

Reactions of national and regional governments were also positive, as were those of the various associations that had also played an important role in the entire process.

T

he green light came just weeks after Chinese inspectors from AQSIQ (General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China) had visited Spanish growing areas. In Murcia and Aragón they conducted on-site checks to see whether the standards of the protocol signed

by Spain and China on 13 April 2016 had been satisfied. “They must have gained a very good impression,” explained Cristina Gutiérrez, trade director at El Ciruelo (Alhama/Murcia), one of the companies registered for the sceheme. “They signed as soon as they got back home having visited various companies. Cultivation, packhouses and the entire cooling process were inspected.

Everything went well, although the news has come a little late for our own company since the growing season is as good as finished. But it does open a new door for us for the coming season.” And orders will not be limited to these products. “The next plan involves protocols for table grapes. We started with citrus fruits, now

The export approval applies to peaches as well as to plums – and includes nectarines, paraguayos and platerinas.

we can export stone fruits, and in future hopefully also table grapes.”

The best means of transport Of the three possible means of transport, the sea route, by which products are en route for between 25 and 30 days, would appear to be

the most effective. She explains: “The ports of departure for Murcia would be Valencia or Algeciras. One of the advantages is that cooling is available throughout the entire journey. At the same time, however, work is also taking place on a railway route between Madrid and China for container goods. The transport in this case would take 15 days. This connection is already being used for olive oil and dried fruits. The fastest method, however, is by plane, but if the fruit needs to be kept cool for 15 days and if you then add the cost of the flight, that is no longer cost effective. But the option is there, and until we have tried it, we will not know for sure. At any rate the doors are now open, and we will gradually make use of them.”

When asked about specific business contacts, she added: “The Chinese are interested in our fruit and we are interested in supplying it to them, even if we have to wait until next year.” At the same time she emphasised the great efforts made by the technicians who had done a magnificent job in successfully meeting the extremely challenging demands of the Chinese.

Trial volumes from Extremadura

Carmen Teodora Morales, general director of the Spanish ministry of agriculture (centre) with the Chinese delegation and representatives of the Murcia state government (Photo: carm)

16

It seems that the first exports to China will thus originate from the Extremadura, the largest plum growing area in Spain. Miguel Ángel Gómez, managing director of the Afruex association, explains: “The shipments that we are able to

Fruchthandel Magazin 2016 We do not know the precise dispatch date of the first sendings, but it could be any time now. The protocol stipulates the cooling measures that we may deploy during transport. This does not pose a problem for us. Once the companies are prepared and there are good business relationships, exports will begin. The intended quantities are not yet certain, but if things go well it could be around 10 containers. Plums can be transported easily and stand up to long distances well.”

Originally 22 companies from the Extremadura registered for the export programme, but many of them have since withdrawn as a result of the situation during the current growing season.

“Quantity and quality are not as good as had been assumed at the start of the season”, Gómez continues. “But this is not only the case here, it is

the same in Murcia and Catalonia. Catalan companies that obtained certification for exporting to China have ultimately decided not to deliver any produce there this year. I Interest in this Asian giant remains of course, but the shortfalls this year are so great that everyone is concentrating on the markets where they are best established, in other words mainly on Europe.”

The Spanish trade association FEPEX, which actively supported the entire approval process, emphasises the strategic importance of this protocol for the Spanish stone fruit industry. It says it develops a potential sales market for the industry that is practically closed to other producing countries. Spain is the first EU member state to be authorised by AQSIQ to export peaches to China. d.s./c.s.

NETHERLANDS/GROENTENFRUIT HUIS _______________________________________________

of Conférence pears. The rough skin initially puts off some consumers in Asian countries. This is where marketing campaigns come in.

“The majority of export companies are convinced that sales in the new target countries will need joint promotion efforts,” she explains. The organisation is thus aiming to make more use of the Partners for International Business (PIB) programme of the foreign ministry. “We are

The first plum exports to China come from Extremadura, the largest of Spain’s plum growing areas.

send off this season are very small, and we regard them as a kind of trial run. What is important is that the Chinese get to know us, and that we are able to export larger volumes there next year.

Joint promotion campaigns crucial to opening new markets Opening up new foreign markets for Dutch apples and pears is an important step in further improving sales for this key commodity group. It is also a key strategy of the Dutch fruit and vegetable umbrella organisation GroentenFruit Huis.

T

he international marketing of Conférence pears in particular is more urgent than ever because of the current surplus in supply.

Production has increased rapidly in the Netherlands over the past few years. China is thus a very attractive market from a Dutch point of view.

At the end of 2014, the Netherlands signed an agreement with the Chinese authorities on the supply of pears. GroentenFruit Huis as a central industry organisation is not just an important point of contact for companies who want to export to new markets, it also brings together expertise on crucial phytosanitary questions, one of the biggest hurdles to be overcome when concluding new trade agreements.

The organisation cooperates closely with the ministry of economics in The Hague and NVWA, the national food authority, in these matters. Their expert for international affairs is Inge Ribbens, who has been familiar with this difficult topic for many years: “We try to ensure that the list of diseases for which the recipient country demands zero tolerance is as short as possible and above all relevant. Phytosanitary requirements that are not absolute necessary constitute a needless extra source of cost for producers and export companies.” Although the requirements protocol has to guarantee the absolute safety of food, the commercial goals of exports should not be put at risk by unnecessary specifications. At the end of the day, price plays a decisive role in competition with local products. “After all, our fruit competes not

only with local products in China but also with those from neighbouring countries,” she says.

Consumers have to be convinced Even when all the phytosanitary and commercial legal questions have been settled, there is still plenty to do. According to Inge Ribbens, new consumer markets first have to get used to what is for them the unusual taste, texture and colour

GroentenFruit Huis brings together phytosanitary expertise currently developing ideas which we can then implement in China with the help of state support. Dutch fruit exporters in countries such as Vietnam, India or Brazil can then profit from this experience.” 

Consumers in new markets first have to get used to unusual products such as Conférence pears.

17

Tomatoes are the most important vegetables exported from Belgium. Specialty products continue to grow in volume.

BELGIUM ����������������______________________________________________________________

A difficult phase for Belgian exports In 2015 Belgium exported 857,128 t of fresh vegetables worth 8.08 Mio Euros and nearly 2.2 Mio t fresh fruit worth roughly 2 Mio EUR to countries worldwide. Compared to 2014 this means a slight drop in volume and value for fruit and a small increase in volume (+23,460 t) and a substantial increase in value (+134,668 EUR) for vegetables. The first four months of 2016 however saw a setback for Belgian producers. Sales volumes and value of many fruits and vegetables plummeted.

T

omatoes remain the top product in the t (23.6 Mio EUR) and pears from 135,236 t (97,6 t of fresh fruit from Belgium in 2015, nearly four times the volume of 2014 (516 t), and for the first Belgian vegetable segment. 236,497 t we- Mio EUR) to 124,185 t (78 Mio EUR).

In term of export markets, Germany remains time small volumes (20 t) were delivered to Saudi re exported at a value of 261 Mio EUR in 2015. This year however the tomato market had the main destination for Belgian fresh fruit and Arabia – an interesting market for top quality a very difficult start with unusually low prices. vegetables. Nevertheless volumes have declined products like strawberries.

Nevertheless it will be a long time until the Export volumes dropped dramatically between recently. Between 2014 and 2015, fruit exports January and April 2016 to 21,667 t at a value to Germany dropped from 688,074 t to 572,515 damaging effect of the Russian ban on Belgian of 35.8 Mio EUR – compared to 37,524 t and a t and vegetable exports from 333.794 t to fruit and vegetable imports can be compensa320,295 t. At the sa- ted for by other export markets. Export volumes value of 56.8 Mio EUR in the same period the me time the French of fruit to Russia dropped dramatically from Other markets developing slowly previous year. market has gained in 114,482 t in 2014 to only 911 t in 2015. VegeThe same fate was importance. In 2014, tables slumped from 17,627 t to 124 t in the shared by some of the other important products Belgian exporters delivered 688.074 t of fruit and same period. No other single market can absorb such as leeks, cucumbers, lettuce and capsicum. 175,562 t of vegetables to France. A year later so much produce. Even though much is being While export volumes of leeks increased from the volumes had increased to 429,436 t of fruit done by the export promotion organisation Fresh 72,528 t (35.34 Mio EUR) in 2014 to 75,069 t and 191,655 t of vegetables.

Trade Belgium and the marketing organization (50.76 Mio EUR) last year, in the first four month Efforts to open new export markets are gai- VLAM, volumes to countries in Asia and the of 2016 they dropped to 31,247 t and 19.5 Mio ning momentum and slowly showing an effect. Middle East remain limited for the time being, EUR compared to 39,195 t (24.3 Mio EUR) in the Fruit exports to China grew slightly from 1,547 t but the long term potential is surely very promisame period of 2015. in 2014 to 1,858 t in 2015. Egypt imported 2,664 sing.  The decline in sales of capsicum was even stronger. Whereas volumes increased between 2014 and 2015 from 32,937 t to 42,077 t, the UKRAINE ����������������______________________________________________________________ first four months of this year saw a decrease to 2,892 t (6.19 Mio EUR) from 7,337 t and more than 14 Mio EUR from January to April 2015.

Lettuce has been gradually losing in terms of The market for fresh fruit in the Ukraine is estimated at between 1.35 and 1.4 volume for the past couple of years now and the million t with apples accounting for 35 per cent of the total. The market volume trend continues. In the first four months of 2016, of apples is almost 45 per cent greater than that of bananas, its main competitor volumes of lettuce reached 8,110 t and a value of in terms of fruit consumption.

11.6 Mio EUR while during the same period in the previous year, 12,191 t had been exported at n the 2015/16 marketing season, the Ukraine a value of 19 Mio EUR. imported the lowest volume of apples in the Export volumes for cucumbers on the other past 10 years. According to customs statistics, hand have been on the increase since 2010. In the imports from July 2015 to June 2016 amounted past six years they nearly doubled from 34,543 t to only 24,600 t. Traditionally the main supplier to 62,985 t in 2015. Nevertheless they also took of apples to the Ukraine is Poland, accounting a plunge in the first four months of 2016 and for 85 per cent of total apple imports in the marreached only 7,450 t, compared to 15,546 t in keting season 2015/16. the period from January to April 2015. In fruit This significant reduction in the volume of the trend is similar. In all the most important imports into the Ukraine is attributable to the fruit groups, the first four months of 2016 saw a devaluation of the Ukrainian currency and the decline in volumes compared to the same period high volumes of domestically grown fruit. In last year. Strawberry exports dropped from 6,752 2015, the Ukrainian apple crop reached 1.17 t (21 Mio EUR) to 3,231 t (12,45 Mio EUR), apple million t, the second largest apple harvest since volumes from 74,580 t (36 Mio EUR) to 42,719 2010. Exports during the season 2015/16 were

Apple market under pressure

I

18

Trade between the Ukraine and the European Union in tonnes Exports to the EU

Imports from the EU

2014

2015

Change in %

Bananas fresh or dried

-

-

-

Exotic fruits (inc. pineapples and avocados), fresh or dried

-

-

-

Citrus, fruit fresh or dried

36

12

-67%

Grapes, fresh or dried

56

18

-68%

8,130

20,328

+150%

108

90

-17%

59

24

-59%

41,070

55,966

+36%

-

18

-

4,718

1,456

-69%

Melons and papayas, fresh Apples, fresh Pears, fresh Stone fruit, fresh

2014

2015

Change in %

84

65

-23%

5,254

3,021

-43%

59,883

49,444

-17%

4,981

1,808

-64%

39

-

-

42,450

17,118

-60%

Strawberries, fresh

-

1

-

427

115

-73%

Raspberries, fresh

-

333

-

34

16

-53%

Other fruit, fresh

316

1,051

+233%

21,675

14,931

-31%

Source: European Commission

nevertheless down to one of the lowest levels in the last decade. The main reason for this has been the Russian import ban on Ukrainian fruit since 1st January 2016. From July 2015 to April 2016, Ukraine exported only 10,200 t of apples.

Russia had previously been the largest import market with an overwhelming share of 98 per cent. Belarus took the remaining 2 per cent.

Since then however the situation has changed dramatically. The share of apple exports to Belarus now account for 78 per cent of the total, and many companies are also trying to export their apples to other markets such as Indonesia, India and Kazakhstan. However, as Russia has also prohibited the transit of Ukrainian goods through Russian territory to Kazakhstan and Kirgizstan, trade with Central Asia is also experiencing considerable logistical problems.

As a result of the difficult picture with exports, Ukrainian growers have been selling their apples on the domestic market where oversupply inevitably causes low prices. Average prices there have fallen by 30 to 50 per cent compared to last year. According to Freshplaza, apple prices are currently varying between UAH 4/kg and UAH 13/kg, depending on the variety, compared with UAH 18/kg a year ago. A further problem is that the current economic situation is causing many consumers to spend less on fruit. The Ukraine’s banana imports from September 2015 to April 2016 came to 121,000 t, a decrease of only 2 per cent when compared with the same period last year. This decrease in imports may have been influenced by the large volumes of domestically produced apples currently available at low pri-

As a result of the difficult picture with exports, Ukrainian growers have been selling their apples on the domestic market.

Photo: Elena Kosyak

ces. Bananas are currently on offer at UAH 26/ kg to UAH 28/kg.

Trade with the European Union As far as fresh produce imports into the Ukraine are concerned, the EU mainly exports apples, citrus fruit and stone fruit. Apples again account for largest share of the total at 39 per cent. The shares of citrus fruit and stone fruit are 34 per cent and 12 per cent respectively. In 2015, EU exports of apples to Ukraine increased by 36 per cent

compared with the year before. Exports of citrus and stone fruit, however, decreased by 17 and 60 per cent respectively.

The biggest share of Ukraine’s own exports to the EU belongs to melons and watermelons at 93 per cent in 2015. EU imports of these fruits from the Ukraine grew by 150 per cent in 2015 compared to the previous year.

It has not been easy for Ukrainian producers to find new trading partners or enter new markets since many of them lack detailed knowledge of modern trading methods. Government support is also lacking. Ukrsadprom (the Ukrainian association of gardening and fruit growing) has already called on the government to support the domestic fruit and berry growing sectors in the face of the serious negative impact of the Russian import ban. In the meantime, the Ukraine’s ministry of agrarian policy and food says it has plans to negotiate with China on the possible export of Ukrainian fruits and berries.

Dr. Vera Belaya

In 2015, the Ukrainian apple crop reached 1.17 million t, the second largest apple harvest since 2010.

Photo: Dr. Henriette Stange

19

Special Changing Markets UKRAINE / FRESH BUSINESS EXPO ____________________________________________________

Top rating for agricultural potential Ukraine is a country larger than France and with a population of 46 million equal to that of Spain. The country has an impressive track record when it comes to the export of agricultural products, possessing as it does nearly 30% of the world’s black soil. Exports grew by 320% from 2005 to 2015 with an increase in value from 4.7 billion to 14.8 billion USD. This is forecasted to increase to 20 billion USD between 2016 and 2020.

Fresh Business Expo is the only exhibition in Ukraine that targets the entire fresh produce chain.

I

n addition to these impressive figures, the free trade agreement between the EU and Ukraine is expected to give a further boost to the entire agricultural sector. At the same time, the country is making considerable progress in implementing advanced systems of food safety control to ensure products are recognized as safe. According to the World Bank, Ukraine’s economy is forecast to grow by some 2% in 2017. As a result, the Dutch ABN Amro bank has awarded Ukraine first place as the most promising agricultural market worldwide. According to the financial institution, Ukraine’s foreign trade is increasingly oriented to Western markets, and its agricultural sector is attractive to Western investors. At the same time, Ukrainian farmers will now be selling their products on Western markets, following the embargo on Ukrainian exports to the Russian market. According to ABN AMRO, Ukraine is thus one of the most important agro- industrial regions in the world.

Short distance to the EU market Ukraine is a European country within close reach of the EU market. This means fresh produce can be exported to the European Union quickly and efficiently. Experts suggest that within the next 20

few years Ukraine could even take over first place from Poland as the number one apple exporter in Europe.

Ukrainian fruit and vegetable production is also expected to increase tremendously in coming years due to the impact of the EU as a new

export market and also because of increasing demand from the domestic market. In the Ukraine, supermarkets and hypermarkets are already replacing the traditional open markets. These supermarkets operate to European standards and demand products with high quality. Convenience products are also finding their way more and more onto the supermarket shelves. These trends are forcing growers to invest in grading and sorting machines, cold storage and quality control solutions. This of course offers considerable potential to Western suppliers within the entire range of equipment and greenhouse technology for the fresh produce industry.

Fresh Business Expo is the only exhibition in Ukraine that targets the entire fresh produce chain. The exhibition has been organized since 2011 and will take place in 2016 in Kiev from 29 November – 1 December. One of the key success factors of the exhibition is the conference “Fruits & Vegetables of Ukraine”, which is organized by Fruit Inform within the framework of the exhibition. The conference and exhibition together attract leading growers, traders, key supermarket buyers, importers, exporters, and processors as well as input and equipment suppliers. Kuno Jacobs, the exhibition’s international organiser says: “Even though times were difficult last year, we managed to organise a very successful 2015 edition with an exhibitor satisfaction level of 84%.

Basically all companies that participated with us last year are re-booking for the 2016 edition. On top of that we are seeing a lot of interest among new companies because of the changing market situation here. These are the main factors behind our expected growth in 2016. Now is the time to show presence on this large potential market and benefit from the expected growth in the coming years.” More information on the exhibition can be found on www.freshbusiness-expo.com. 

UNIVEG BULGARIA EOOD �____________________________________________________________

Investing in the cold chain UNIVEG Bulgaria has a workforce of 200 employees at its ultramodern cold store situated just a few kilometres to the east of the Bulgarian capital. The 8,000 m2 facility primarily serves retailers on a daily basis around the clock. This UNIVEG subsidiary was established at the end of 2006 and in the first few years of its existence made use of rented cold storage. Fruchthandel Magazine spoke to Pascal van de Luijster, the subsidiary’s managing director.

T

he newly built coldstore complex, located near Musachevo, went into operation in 2011. Further expansion of the site is possible if future demand requires as further land is available at the site. The main product handled is fruit and vegetables, but other foodstuffs requiring controlled temperature storage such as milk products, meat and fish are also stored.

The fresh produce is both imported and locally

produced. Companies from neighbouring Greece and Turkey are important suppliers, and Macedonia plays a significant seasonal role. Incoming shipments generally arrive from 6 am onwards, with deliveries to retail customers being made in the evening. Apart from Sofia itself, the whole of Bulgaria is supplied through sub-contractors, including in the summer season the Bulgarian Black Sea coast. All deliveries are processed cen-

Fruchthandel Magazin 2016 UNIVEG Bulgaria has a workforce of 200 employees at its ultramodern cold store situated just a few kilometres to the east of the Bulgarian capital.

trally through the depot. Using modern refrigerated lorries, food can be delivered in the same truck at different temperatures to customers all over the country.

In the case of deliveries within the UNIVEG group, fruit and vegetables from the Netherlands are first sent to a temporary storage facility in Italy and then onwards to Bulgaria. In some cases, packing is also carried out at the depot.

Food service supplies to restaurants and hotels, also play an important role for UNIVEG Bulgaria, and the volume of fresh convenience products is seeing continual growth.

It is rare to handle the ripening of bananas in Bulgaria. They therefore usually arrive ready ripened and ready for consumption. Their role over the whole year in terms of quantity is not

5

th

significant for UNIVEG but there is always a substantial increase in volume in December as Bulgarians traditionally buy and eat bananas over the Christmas and New Year holidays. “As far as berries are concerned, we have local production as well as imports,” says Pascal van de Luijster. “The Bulgarian strawberry harvest was not particularly good this year because of the heavy rainfall. That impacted on us as well. For this reason, we saw a greater volume of imports from Greece and Turkey.”

A steady increase in demand “As far as the general trend in fruit and vegetable consumption in Bulgaria is concerned, we are seeing a general increase,” says Pascal van de Lu-

ijster. “Supporting the consumption of healthy fruit and vegetables is a well-known tenet of our company philosophy. But despite growth on the local market, there are still substantial differences to Western Europe.” Imported green products are as a rule pre-packed and only have to be delivered to the retail outlets. But consumers in Bulgaria are accustomed to feeling their fruit and vegetables, not only at farmers’ markets but in supermarkets as well, checking quality and then only selecting the best. “This isn’t usual in Western Europe but it is definitely a local characteristic in Bulgaria”. Purchasing power here is not strong and that impacts on the quality of fruit and vegetables as well. “That may not be so bad but is also not top”. Demand for fruit and vegetables rises in particular in the summer. “In contrast to Western Europe, people here also eat more fruit and vegetables at work or during their breaks,” says van de Luijster.

UNIVEG reports a steady increase in demand over recent years. Exotic fruit and vegetables, for

INTERNATIONAL EXHIBITION FOR THE FRESH PRODUCE INDUSTRY IN UKRAINE AND CIS COUNTRIES

29 NOVEMBER 1 DECEMBER Kiev, Ukraine

CONTACT DETAILS: Nova Exhibitions B.V. | The Netherlands tel: +31 85 401 73 97 │ E-mail: info@nova-exhibitions.com

www.freshbusiness-expo.com 21

Special Changing Markets example from Vietnam or Thailand, are also becoming more and more popular. “I wouldn’t say that the market is completely ready for exotics, but the trend is there,” he says. He had the same experience in Russia, where he worked for several years before coming to Bulgaria. People in Eastern Europe today travel more, to exotic countries as well, and they want to be able to buy those products at home too. Unfortunately there is little information available in Bulgaria about such exotic products. More information about their health benefits and how to use them would certainly further stimulate consumption.

The need for investment on the cool chain Managing Director Pascal van de Luijster checking the quality of the produce.

The number of food retail organisations is relatively small in Bulgaria. Important players such as Penny or Delhaize have already pulled out.

Carrefour will undoubtedly also disappear very soon from the retail map. “I don’t expect any major new international chains to arrive. We, as UNIVEG Bulgaria, therefore see opportunities in the future in repackaging and sorting,” says van de Luijster. The expertise of the UNIVEG Group can play an important role here, he says. This is very important for Bulgaria because climatic conditions are very good. There are longstanding traditions in cultivating fruit and vegetables here, but farmers rarely distribute their products widely as is customary in Western Europe. Fresh lettuce, for example, should of course be placed under refrigeration immediately after picking in

order to safeguard its quality. “This is still rarely the case here because most available refrigeration systems in Bulgaria are outdated. It is, of course, all a question of investment. If more is done here, quality could improve very quickly.

There are already some first examples of ultramodern refrigeration systems being built, such as in Sandanski, in the south of Bulgaria, and on the border with Greece, which run according to Western standards.” Investments in refrigeration systems are thus beginning, but for many small producers, the problem is the lack of capital and insufficient know-how about storage and distribution. “It is such a shame when we get lettuce harvested straight from the field which was not properly refrigerated. We can, of course, process

it here and continue its distribution, but it is logical that the quality has already suffered,” says van de Luijster.

Regardless of this the market in Bulgaria will continue to grow. Foreign investment will certainly increase but the market is still small, with some 7 million inhabitants, and perhaps 2 million Bulgarians working and living abroad.

Salaries are not particularly high. With local production, good prices however can certainly be offered long-term when measured against foreign competition. “There are really very good products here, such as pink tomatoes. They can undoubtedly be exported to Western Europe even more successfully in the future,” says Pascal van de Luijster.

Ralf Petrov

BULGARIA ���������������______________________________________________________________

Slow but continuous growth in the banana market For many years the banana market in Bulgaria was dominated by the multinational groups Chiquita, Dole, Del Monte and Bonita. Imports arrived by direct shipment on cargo vessels and amounted to an estimated 70 to 80 truckloads per month. Since 2012, however, the Bulgarian market has changed completely as a result of the WTO Doha Agreement.

U

nder the agreement, rules on quotas were replaced by liberalisation. Whereas Bulgarian traders had been previously forced to accept the disadvantages of the monopoly position of the global players, imports today depend above all on private contacts and sufficient financial strength. Bulgarian traders today look primarily for bananas from ACP countries such as the Dominican Republic or Martinique, because of their special status and freedom from additional import duties. This same applies to Ghana, Ivory Coast and Cameroon. The importer who is able to get hold of ACP shipments has a natural advantage on the extremely price-sensitive Bul22

garian market. Key importers are Bonfruit and Intercitrus. Recognised trademarks are Dole and Bonita. Chiquita bananas are also available but are rarely seen. They are almost always imported from Greece and their price is appreciably higher.

Ripening infrastructure According to trade sources, there are currently about 20 banana ripening chambers in Bulgaria, many originally erected under licence from Chiquita. While consumers in Western Europe like to buy slightly green grade 3 bananas and let them ripen at home, this is unconceivable in

Bulgaria. Bulgarian consumers insist on ripe, yellow bananas with a green tip in grades 4 and 5.

In this respect, the Bulgarian market is unique, for bananas in this ripened, yellow condition represent a far greater risk for traders. In Bulgaria, the colourful brand-name sticker on a banana seems not to be so important: what matters is only quality, size and price.

One particularly interesting trend in Bulgaria is the increasing demand for bananas from fitness centres. It is not unusual these days for fitness chains to order larger quantities of bananas than the usual wholesalers.

The Bulgarian import market In the past there was always strong interest in the banana trade from the most diverse Bulgarian companies. Today there are no more than three specialised companies operating sustainably.

Before Bulgaria joined the EU, up to 250,000 boxes were marketed each month. This level of volume is no longer achievable today because of higher levels of import duty and value added tax.

While the delivery price previously lay between

Fruchthandel Magazin 2016 about EUR 0.40 and 0.45 per kilogram and the sale price between EUR 0.55 and 0.65, sale prices today are between around EUR 1.10 and 1.40.

The logical consequence is a significant decline in sales. According to experts, marketed volumes currently range from between 70,000 and 80,000 boxes per month.

According to Alexander Yotsev of the Bulgarian association of food retailers, bananas prior to Doha officially came from more than 15 exporting countries to Bulgaria, for the simple reason that the statistics were based on the invoicing country. “In 2015 approximately 33,000 t were imported from Ecuador and some 24,000 t from Columbia,” he explains. There is however evidence of a slight but continuous growth trend, he said. Imports in the last three years have increased by approximately 20,000 t. Total sales

value in 2014 was estimated at approximately 45 million USD. By way of comparison, Turkey consumes 200,000 boxes a week and has six large companies involved in the import business. Bananas are thus also imported to Bulgaria via countries such as Turkey, Albania, Slovenia or Greece, and the Romanian port of Constanta is used for simultaneous deliveries to both Romania and Bulgaria.

Bananas today are transported to Bulgaria exclusively by lorry. The Bulgarian market is small and it is not usually worth paying the extra charges for ships to pass through the Bosporus to a Bulgarian port on the Black Sea. Freight is often forwarded to Moldova, Ukraine and Russia. Gone are the times, however, when companies from Serbia, Macedonia or even Romania purchased bananas from Bulgaria.

Ralf Petrov

In 2015 approximately 33,000 t were imported from Ecuador.

BULGARIA �������������������������������������������������������������______________________________________________________________

Production of berries on course for growth Bulgaria enjoys very favourable climatic conditions for the production of fresh berries.

The soil has been subject to barely any chemical contamination, as there has been almost no heavy industry in the country since 1989.

M

ost of the country is mountainous and forested. As producers receive almost no financial support from the state, the upside is that only the most essential plant pesticides are used. Low levels of investment in modern irrigation methods however mean that yields are generally below the EU average.

Neverthless characteristics such as taste should never be underestimated. The sun shines in Bulgaria an average of 2,500-2,700 hours per year, and solar radiation is more than 1,500 kW/h per square metre. The content of sugar and vitamins in the berries is therefore relatively high.

According to official statistics, yields for key products in Bulgaria in 2015 were as follows: • strawberries – 4,203 t • raspberries – 4,569 t • rose hips – 1,500 t • blackberries – approx. 800 t • blueberries – black approx. 200 t, red approx.

50 t • wild strawberries – approx.50 t • sloe berries – approx. 400 t These figures include only the larger producers who are registered with the Bulgarian mi-

nistry of agriculture. Smaller growers tend not to register, and according to experts, total yields in Bulgaria are actually some 25 to 30 per cent higher. Unfortunately there is also no accurate information with respect to organic production.

In 2015, 7 per cent of productive land under fruit and vegetable cultivation in Bulgaria was intended for organic production. Growth in the area under organic production was 32 per cent higher than in 2014. A total of 3,893 farmers said they were cultivating organic products, with international companies such as Biocert, SGS or Lacon participating in certification.

Specialists in the cold chain The company Bulfrucht from Kostenets in Bulgaria specialises in the cooling and refrigeration of berries. It has been successfully performing on the market for 20 years and is family-owned. Its main activity is the refrigeration of raspberries, strawberries and wild berries in cold storage facilities of 6,000 cubic metres. Raspberries account for the majority of sales at around 80 per cent.

They are drawn primarily from the area surrounding the nearby winter health spa of Borovets, where some 50 smaller farmers are under contract. The gardens are located no further than 5 to 10 km from the cold storage facilities. Organically produced raspberries come from the region The company Bulfrucht from Kostenets is specialized in the cooling and refrigeration of berries.

23

Special Changing Markets around Svoge, to the north of the capital Sofia.

Depending on the harvest, a volume of between 400 and 600 t is handled at Bulfruct every year.

The company is certified in accordance with ISO 22000. Long-term contracts have been signed with the farmers supplying the fruit, and Bulfruct organises training courses every April on all questions affecting food safety and pesticides. The company’s agronomists check the fertilisers used and in doing so comply with the requirements of the Bulgarian agency for food safety as well as the recommendations of leading international manufacturers. The entire chain is monitored from cultivation through harvesting and refrigeration to delivery to the end customer.

Before the fruit is refrigerated, individual samples are analysed in laboratories with EU certification.

Bulfruct has the only refrigeration system specially designed for the handling of raspberries by the Swedish company Octo Frost. It takes just 8 minutes to chill the berries. The company is one of the few to offer and export fruit in small

packaging: packets and plastic punnets. Chilled raspberries from Kostenets have already been supplied in Germany to Edeka, Spar, Kaufland and Metro. Organic raspberries in 300-g packs were also recently supplied to Edeka. The ma-

EU funding is supporting growth naging director of Bulfruct, Krasimir Kichukov, is also chairman of the association of Bulgarian raspberry producers which brings together six other companies, a total of five farmers and two processing facilities. The association’s management is currently on a two-week study trip to the USA, the third largest producer of raspberries in the world, to inspect gardens and cold storage facilities there. Bulgaria is already supplying organic raspberries to the United States. Demand is growing there, and purchase prices are higher and more attractive when compared with the EU, though additional certification is necessary for

SLOVENIA ���������������______________________________________________________________

Port of Koper – the short route to customers in Europe The Port of Koper’s close proximity to key cities in Central and South-Eastern European markets, with direct container connections from a number of Mediterranean and Far East countries, provides the shortest route for perishable goods for many customers, even as far afield as the UK and Scandinavia.

T

he Slovenian multipurpose port of Koper with its 12 specialized terminals has a strategic geographic position in the North Adriatic region and thus offers important opportunities for servicing Central European hinterland markets. For many it represents the shortest

link to Europe from the Middle and Far East via the Suez canal and the Eastern Mediterranean.

With a shorter total transport distance compared to other Northern European ports, transit time can be reduced by around 5 days. This time advantage enables the optimization of the entire

The most recent season saw more than 1,300 40ft containers of Egyptian grapes arriving at Koper.

24

the US market. EUR 2.00 was the price for a kilo of organic raspberries from Bulgaria in 2015.

The price for conventional raspberries ranged between EUR 2.50 and EUR 3.30. It is still too early to talk about prices this year. Production in Serbia has decreased significantly due to poor climatic conditions, although Bulgaria’s neighbour to the west is still the leader in this field with an annual production of 100,000 to 120,000 t.

In the Balkan region, Bosnia-Herzegovina has also been developing its raspberry production over the past years, currently producing 10,000 to 15,000 t per year. “Having decreased significantly after the political changes in 1989, production has been growing again in Bulgaria,” says Krasimir Kichukov. “Between 12,000 and 14,000 t or raspberries are currently being harvested each year.” This trend is also being supported by EU funding: EUR 900 to EUR 1,200 in subsidies are currently paid per hectare for the cultivation of raspberries and strawberries.

Ralf Petrov

supply chain with substantial cost and time savings for the customer. It also makes deliveries of time sensitive cargoes more efficient due to the improved direct container connections and direct block-train container services.

This key advantage has already been acknowledged by the latest Drewry study (2016) which analysed the transport of a 40ft container from Shanghai to Munich in southern Germany through various North European and Adriatic ports. The Port of Koper came out as the best option for shippers with time-sensitive cargo.

The total throughput of the Port of Koper in 2015 was 20.7 million t, including 790,000 TEUs and 607,000 car units, making Koper the largest container terminal in the Adriatic since 2010.

The majority of the port’s throughput is destined for the hinterland countries of Austria, Hungary, Slovakia, the Czech Republic, Poland, Germany and Italy as well as the former Yugoslav markets. The port is well connected with many daily container trains to main business centres in Central Europe and it also has direct access to the European motorway network. Koper is thus an excellent solution for highly perishable goods from the Eastern Mediterranean, the Far East and even from the Southern Hemisphere.

Onward deliveries to final destinations in the EU take up to one day by truck, 2 days to the UK and Scandinavia, 3 days to the Baltic States and 4 to 5 days to Moscow. Maritime connections include frequent intra-Mediterranean services, but Koper port has especially good container connections with the Far East and South-East Asia offering weekly arrivals and competitive transit times. The 2M Alliance calls weekly at Koper as the first port of call in the Adriatic, and the Ocean3 Alliance stops at Koper as the first and last

Fruchthandel Magazin 2016 port of call on its Adriatic route. Container connections between Indian ports and Koper (CMACGM, Hapag Lloyd, MSC, Maersk, ZIM) have also been recently improved with shorter transit times of between 18-24 days.

Guaranteed cold chain deliveries The reefer terminal at Koper port with some 50 years’ experience is the biggest and most modern terminal in the Adriatic for handling various types of goods with guaranteed cold chain requirements – including bananas, other fruit and vegetables, chilled and frozen foods and pharmaceuticals.

For many years now, Koper has been handling all year round arrivals of Israeli fresh produce including fresh cut flowers for Dutch auctions.

Imports of Egyptian fresh produce via Koper have also seen a recent boost between November and July due to improved direct container connections. The most recent season saw more than 1,300 40ft containers of Egyptian grapes arriving at Koper. Other shipments included arrivals of Argentinian lemons, Moroccan potatoes and Chinese ginger and pomelos. Exports too have been booming with over 1,000 40ft containers of Polish, Austrian and Slovenian apples as well as dairy products and other foodstuffs.

The majority of the port’s throughput is destined for Austria, Hungary, Slovakia, the Czech Republic, Poland, Germany and Italy.

The Port of Koper is an official EU border inspection post with the option of fiscal clearance and fiscal warehousing. In cooperation with the rest of the port community, it provides continuous handling operations 24 hours a day, 7 days a week, with full customs services (simpli-

fied customs procedures, pre-clearance, and inspections) as well as smooth onward deliveries of cleared goods 7 days a week including weekends.

Koper Port has already obtained certification by many standard authorities, including ISO 22000/ HACCP and Eco certification. 

25

Special Changing Markets POLAND �����������������______________________________________________________________

Growth for Polish exports in new markets EU countries and Poland’s neighbours, including Russia, Ukraine and Belarus, continue to hold great importance for Polish exports but other non-European markets are gradually being added to the list. Over recent years, products from the Polish food sector have increasingly been sold to countries further afield in North Africa, the Middle East, South-East and Eastern Asia, Central and South America, and the USA.

F

or some time now, China has occupied a special position in relation to Polish exports.

Figures from GUS, Poland’s main statistical office, for January 2016 show that China is now Poland’s second most important import market after Germany with a share of 12.7%. The value of exported goods currently amounts to EUR 1.65 billion, 1.6% higher than in the previous year. Polish exports to China are not large but this may change over the next few years. According to Lidia Dziewierska, president of Loconi Intermodal, trade with the People’s Republic of China could soon double or triple due to the current low absolute value of trade. The Chinese market is changing from being a low-cost manufacturer to a major consumer of goods and services. Dziewierska believes that this trend can help Polish exports grow. It is her opinion that there is great demand there for Polish foodstuffs which the Chinese link to important consumer values such as health, ecology and good flavour. Polish apple growers expect China to take a large part of their harvest in future, particularly after the Russian embargo. The first containers of Polish applies could arrive in China within a few months. Polish farmers hope to export at least 100,000 t of app-

les in this way each year accounting for 3 - 4% of total production.

The Newseria.pl online portal recently reported on the Chinese Province of Hunan, where no fewer than 70 million people live. This region of South-East China is currently seeking to cooperate with Poland. Representatives of Loconi recently signed a cooperation agreement on the development of rail transport between the Hunan and Poland. Trains transporting containers, already operation between China and Europe, are to operate in Hunan as well. From there they will arrive in Poland for further distribution within Europe. According to Newseria.pl, the Xiangyu Express is currently the only regular transport connection and is regarded as an obvious alternative to transport by sea. Rail transport takes 18 days over a distance of 12,000 kilometres. The costs are several times higher than costs by sea but shipments take only half the time. Loconi Intermodal has thus become the strategic partner of Hunan Province for intermodal transport, not only to Poland but also to the rest of Europe.

It already has three terminals in Poland: in Radomsko, Poznan and the largest, newly opened in Warsaw. Further transport hubs are planned

Polish apples are already very popular in the Middle East.

Photo: Zwiazek Sadownikow

in the regions of Lubuskie, Lodzkie and in Malopolska.

Vietnam and UAE also on the agenda Poland and Vietnam are separated by no less than 8,600 km. Polish foodstuffs, especially apples, have to survive this distance in order to reach Vietnamese consumers in marketable condition.

Miroslaw Maliszewski, managing director of the Association of Growers of the Republic of Poland, estimates an export potential to Vietnam of between 75,000 t and 100,000 t. Export momentum, he continues, is considerable. Only 252 t of apples were exported to Vietnam in three months last year and more than 450 t already this year. The apples are transported both by land and sea, and the total transport takes about 50 days.

For this reason, the fruit has to be well protected to retains its quality when it reaches its destination. Maliszewski emphasises that apple producers are looking to Asia with great expectations, especially in view of the increasing standard of living and higher consumption of imported fruit.

In addition, of course, many Asian countries are experiencing high levels of population growth and movement from rural areas into the cities.

United Arab Emirates Another example of a new market for Polish food exports is the United Arab Emirates (UAE). The Polish deputy prime minister, Janusz Piechociński, visited Dubai recently to discuss the development of economic relations with UAE representatives.

At a press conference, he said that existing trade between the UAE and Poland is already growing annually at a rate of between 40 and 50%. And this includes the agricultural sector. The export of food especially is thus gaining momentum.

Particularly popular here are Polish apples and confectionery. The UAE are already Poland’s key trading partners in the Gulf. Polish exports to the UAE in 2014 amounted to USD 1.13 billion.

Dr. Henriette Ullmann Trade between the United Arab Emirates and Poland is already growing annually at a rate of between 40% and 50%. Photo: zdjecia.biz.pl

26

Fruchthandel Magazin 2016 HUNGARY ����������������������������������������������������������___________________

Imports of tropical fruits are increasing Hungary has imported significantly more tropical fruit in recent years. Total banana imports in 2015 for example were 54,264 t at a value of EUR 42.2 million and representing a 20% increase on 2014. In the first quarter of 2016, imports reached 19,502 t with a value of EUR 16.2 million.

T

he country has also seen clear growth in imports of citrus fruits. Last year 15,723 t of lemons with a value of EUR 16.6 million were imported – a massive increase of 27% in terms of volume and 49% in value compared to the previous year, as Éva Varga from the Research Institute for Agricultural Economics (AKI) confirmed. Lemons are now the second most important tropical fruit on the Hungarian market. Imports

mangos, papayas, star fruit and other special fruits, they supply the top restaurants and hotels, not only in the capital city, but also throughout the country”, says Kékedi.

The changing face of retail The concentration of food retail has also affected Hungary greatly in recent years. “Ten years ago

In 2015, Spar was ranked in fourth place for food retail in Hungary.

of sweet oranges increased over the same period by 7% to EUR 14.0 million – despite the fact that quantities fell by 3% over this period to 25,246 t.

Around half of Hungarian banana imports and a third of other tropical fruits traded in the country are sold at the Budapest wholesale market, which was founded in the south-eastern part of the Hungarian capital 25 years ago and has now grown in size to an area of 33 ha. “Between 400,000 t and 450,000 t of fruit and vegetables are sold here each year, of which 80,000 t to 90,000 t are tropical fruits”, explains Tibor Kékedi, director of the market, who has himself accompanied and helped to shape this rapid development right from the start. 50 chambers are now available for ripening bananas, corresponding to a capacity of 50 lorry loads. Among the 200 wholesalers who are based at the market, five companies specialise in exotic fruits. “With

some 70% of our sales were to specialist food shops and only 30% to the large retail chains”, András Varjú, director of Ta-Moro GmbH, recalls.

“Today we only market around 10% of our merchandise to smaller retailers, while the rest goes to Tesco, Spar, Lidl, Auchan, Penny Market, Aldi and Hungarian grocery chains such as Coop, CBA and Reál.” The supermarkets also partially undertake the procurement of tropical fruits themselves. “Only to a limited extent, though,” says András Varjú, “because the logistics are complicated and supply is not that flexible. If there is a quality problem, for example, the chains simply return the goods to us. That is not so easy when your partner is overseas. And if I receive an order by 10 o’clock in the morning, the goods are with the customer that same afternoon. Orders placed by 5 o’clock in the afternoon are there at 5 the following morning.” In recent years, a

number of Hungarian dealers have started to reexport bananas – especially to Eastern European countries such as Romania and other Balkan states. In the first quarters in each of the past two years, some 2,000 t were exported – primarily in the cheaper price segment, so that sales value was less than EUR 2 million. “We mostly import bananas from wholesalers in Germany, the Netherlands and Belgium, and citrus fruits mainly from Holland, Spain, Italy and Greece. We have long-term contracts with our partners there,” explained András Varjú. Ta-Moro was founded in 1997, and Varjú still recalls the early days when enterprising wholesalers initially procured their products from the wholesale markets in Vienna, Munich or Italy at the time the Iron Curtain fell. Today the company generates annual sales of EUR 6.5 million.

According to a GfK survey, minimarkets with a 20% share are still the most important sources of fresh fruit and vegetables for Hungarian consumers, followed by supermarkets, discounters and the 2,000 specialist greengrocers throughout the country. In 2015, Spar was ranked in fourth place for food retail in Hungary with sales of EUR 1.57 billion. In addition to 32 Interspar markets, the company operates 349 supermarkets, as well as 41 other branches around the Donau and Theiss. Spar procures its tropical fruits from a number of sources, as Márk Maczelka, head of communication for Spar Hungary explains: “We predominantly have partners in the countries where the merchandise is produced, especially in Spain, Italy and Greece, which is where we import citrus fruits from. We generally buy bananas from the largest European importers.”

However Hungarian retailers have found things difficult since the financial crisis. “Today the low price segment dominates, and the mid-price segment hardly exists,” says András Varjú. One consequence of the change is that the average sales space in the larger minimarkets has decreased over the past ten years from 433 m² to 370 m².

Ernö Bajai

Márk Maczelka, head of communication Spar Hungary

27

Special Changing Markets BREXIT ����������������������������������������������������������������______________________________________________________________

“British consumers will not take the hit – additional costs will be absorbed by suppliers” The outcome of the recent referendum in the UK has sent shock waves through the fruit trade in Europe and overseas alike. Many stakeholders in the sector ask themselves what the future will bring.

E

urofruit and Fresh Produce Journal, the English partner magazines of Fruchthandel Magazin, are both published in London. We spoke to London-based managing director Chris White to hear about the British withdrawal from the EU, and what impact it might have on Aldi and Lidl in particular.

Fruchthandel Magazine: The UK voted to leave the European Union on 23 June. What do think about Brexit?

Chris White: Personally speaking, this wasn’t the result I wanted, in fact I campaigned hard here in London for the Remain campaign. I’m very proud that my city voted strongly in favour of the European Union. Europe is close to our hearts in a world city like London, which is made up of so many different people from Europe and from all over the world. Our staff here in London is from almost a dozen different countries in Europe and outside. So Europe is very much part of our life, I’m joint managing director of our company in Germany, and I head up Fruitnet Media’s international business from here in London. We all feel at home in Europe and, like many others here in the UK, I consider myself to be a Briton and a European.

It goes without saying that these will be very interesting times for the fresh fruit and vegetable business in Europe. From the business point of view the UK is a major importer of fresh fruits and vegetables, especially from Spain, France and the Netherlands. What’s going to happen to these trade flows? What will happen to prices?

What does this mean for the UK? And of course what does this mean for the EU?

Chris White, Managing Director Market Intelligence (London)

We’re very well-placed here at Fruitnet Media: our UK magazine Fresh Produce Journal is at the centre of things here in Britain, we’re the very best source for fresh produce news and comment in Germany through Fruchthandel, and we’re reporting on things from broader European perspective in Eurofruit Magazine. And then there is all the online news and comment were posting as a group at Fruitnet.com and Fruchthandel.de.

It’s not often as journalists that we get to be in the middle of such a huge story like this.

FH-Magazine: Let us turn to some of those questions you just raised. What’s is specifically going to happen in the UK? And what impact will this have on Aldi and Lidl, the German discounters which are now well established in the UK market?

C. White: First, it’s important to stress that the UK still remains part of the EU today, and it will remain a full member for at least two years once the UK’s formal withdrawal process from the EU begins, the socalled Article 50. Indeed there are those of us in the UK that hope Article 50 will never be enacted. The referendum vote was an advisory recommendation, and it is subject to a separate vote in British Parliament, and it might be defeated. We shall see.

In the meantime life goes on. In the immediate short term, we’ve seen that British pound sterling has weakened considerably against both the Photo: TESCO Bank

28

Euro and the US dollar in the period immediately following the referendum. This is bound to have an impact on prices and margins and profitability. It may also mean that the beaches in Spain are a little emptier this year, and that you Germans can get on the sun loungers first. Our UK magazine Fresh Produce Journal polled its Twitter followers about Brexit at @fpjlive in June, and they said that exchange rates were the biggest headache following Brexit.

FH-Magazine: So what will be the impact on the fresh produce business?

C. White: These changes mean that UK imports will now cost considerably more. I expect UK food retailers will be trying as hard as possible to maintain their price position as well as their margins. So the additional cost is going to have to be absorbed somewhere else, either by the grower or the supply-chain partner or by the consumer.

But I don’t think it is going to be the consumer who takes the hit. Aldi and Lidl are growing their market share all the time in the UK. I don’t expect the big UK-based supermarket organisations will want to see consumer prices rise. They simply cannot afford to lose more customers. Si let’s see if Aldi and Lidl launch new price promotions in the next few weeks to get further market share.

After all they are Euro-based businesses buying large volumes in Euros for their stores across Europe, and that includes those in the UK. It seems to me that Aldi and Lidl are now in a strong position compared with some of their rivals.

FH-Magazine: And what impact will the exchange rate changes have on producers in the UK? C. White: Aldi and Lidl have been big buyers of locally-grown British fruits and vegetables, and I don’t expect that to change much. They may even start buying more. Like every other supermarket they also want to be seen to be supporting UK farmers. And don’t forget that Lidl was even the official supplier of fresh fruit and vegetables to the England football team.

It didn’t help much, though! At the same time there has been a lot of talk in the UK about how UK growers need to export more in an effort to escape the price war on the local market. The weakness of sterling could thus help UK exports.

Europe’s supermarket buyers can buy with confidence from the UK because they know how demanding UK-based supermarkets have been over many years. Whether European shoppers will want to buy British produce is another matter. I hope they will. 

27 | 28 | 29 March 2017

The annual meeting point for leading players in the global berry industry

berrycongress.com For information on sponsorships, exhibiting and to join the mailing list email info@berrycongress.com

Organised by

@berrycongress

Special Changing Markets USDA GAIN REPORT/CHINA ������_____________________________________________________

Challenging times for offline retailers According to USDA’s Annual Retail Report, China’s economic growth rate has continued to drop for the fifth consecutive year. However, it is still a food market with huge potential that international exporters should not ignore. Food consumption accounts for 31 per cent of the annual urban household expenditure in China. Despite the economic slow-down, consumption of imported food and beverage is expected to remain resilient.

C

hina’s annual retail trade sales were worth USD 1.76 trillion in 2014 with total retail sales of consumer goods valued at USD 431.5 billion, up 12 per cent from 2013. If calculated by sector, China’s total integrated retail sales reached USD 413.8 billion in 2014. While the offline retail sector is undergoing a critical transition phase, online retail business is growing dramatically and accounted for over 11.4 per cent of total integrated retail sales in the first half of 2015. With a very complicated economic climate and a diversified and segmented retail market, earning profit in China has become much more difficult for retailers. As a result, offline retailers seek ways to differentiate themselves. With a huge population of 1.367 billion, consumers have demonstrated very different purchasing habits.

Specially tailored marketing plans should therefore be implemented to target different consumer groups and specific distribution channels.

In addition to the four mega cities (Shanghai, Beijing, Shenzhen and Guangzhou), the strongest consumption markets are in the eastern and southern regions of China based around

Zhejiang, Guangdong, Fujian and Jiangsu. In general, both offline and online retailers are undergoing a challenging transition phase, tending to combine traditional retail operations with new digital technology. Department stores have gradually been replaced by one-stop shopping malls. Offline food retailers include a wide range of hypermarkets, supermarkets, specialty stores, discount stores, community stores and conveniences stores. Meanwhile, Internet plus, O2O (online to offline & offline to online), We-chat and mobile marketing are the hot topics and new test channels in the market.

New trends and challenges in retailing Hypermarkets and supermarkets seek ways to differentiate themselves from their competitors by launching multiple marketing activities such as in-store promotions and on-site demonstrations, at the same time leveraging operational cost and sales/profit targets. Higher real estate rents and lack of labour in first tier cities have

Traceability back to the original food production area is no longer a problem.

30

forced many retailers to adjust their strategic expansion plans, closing less profitable stores in downtown areas and penetrating into third and fourth tier emerging cities. The convenience retail sector also continues to grow. Most convenience and community stores are located close to residential enclaves and commercial districts. Public transportation hubs such as shopping center subway and train stations or airports are also popular locations. Nearly every housing development and business district in major cities has at

Specialized fruit shops are competing fiercely with online fresh fruit stores.

Fruchthandel Magazin 2016 In addition to the four mega cities Shanghai, Beijing, Shenzhen and Guangzhou, the strongest consumption markets are in the eastern and southern regions of China.

Photo: Metro Group

distribution systems. Direct farm programmes and global sourcing have helped retailers to cut costs and improve traceability by purchasing directly in the production areas. Cold storage facilities in first tier cities has also been considerably improved, though there is still much room for improvement in second and third tier cities where the cold chain is often interrupted. Some leading retail organisations are also getting involved in multiple retail formats. In addition to their traditional supermarkets and hypermarkets, retailers such as China Resource Vanguard and Carrefour have started to operate small-size convenience and community stores. Mergers and acquisitions hit a record high in 2014-2015, making the big players even stronger in terms of both supply chain and distribution channel development. least one convenience store outlet in the vicinity.

Convenience store sales areas vary in size from 50 to 150 m2. These stores target in particular the young urban consumers, students, white collar workers and tourists, aged from 16 to 40, who lead a busy lifestyle or have the greatest need for convenience.

New business models continue to emerge in China. With the encouragement of central government for “Internet plus”, many retailers are beginning to combine their traditional operations with the new technology. At the same time, major e-commerce platforms have started to cooperate with traditional offline retailers.

New models include O2O (online to offline), B2B (Business to Business), B2C (Business to Consumer) as well as B2B2C (Business to Business to Consumer). Mobile marketing is also gaining ground. By July 2015, China had over 4 million websites and 668 million internet-users. In addition, there are 650 million mobile device owners, 250 million using 4G network mobiles. These consumers are showing very different purchasing habits and are the obvious target audience of the “click and collect” digital retail business. China is setting a five-year target for the express delivery industry in the period 2016-2020, implying a compound annual rate growth of more than 20 per cent in online sales by 2020.

Cross-border duty free warehousing and global direct sourcing are new concepts that both wholesalers and retailers are paying close attention to. The aim is to establish an integrated supply chain, sourcing imported products directly from overseas, since traceability back to the original food production area is no longer a problem. Leading retailers are also continuing to develop their own integrated supply chain and

cheaper prices. Specialized online shopping platforms such as Fruitday.com and Yiguo.com are also gaining ground in the online fresh fruit and frozen food business. Consumers pay close attention to price, quality and delivery service.

Fancy grocery store chains are also new highlights, targeting particular groups of consumers with higher disposable incomes in the first tier cities.

The online retail business is growing dramatically and accounted for over 11.4 per cent of total integrated retail sales in the first half of 2015. In the year 2014-2015, e-commerce business continued to boom in the four first tier cities of Beijing, Shanghai, Shenzhen and Guangzhou.

Consumers in the north especially seem to prefer to make their purchases online. Retail sales in Beijing increased 12 fold over the past five years to reach USD 23 billion in 2014. Nearly 80 per cent of growth in consumption was the result of an increase in e-commerce sales in Beijing in 2014. Mobile shopping, cross-border, and fresh home delivery are the hot topics for e-commerce

Food consumption accounts for 31 per cent of the annual urban household expenditure in China.

Photo: Carrefour

Private labels are another important new tool to differentiate retailers from their competitors.

Specialized fruit retail channels Specialized fruit shops are today competing fiercely with online fresh fruit stores. Specialized fruit shops such as the large Pagoda chain are offering a wide range of high-end products with premium and fresh quality, while online fresh fruit stores such as Benlaishenghuo.com focus more on a more limited range of varieties and

in 2014. Major digital shopping tools include: TMall.com, JD.com, Amazon.com, Shunfeng Best.com. And there are also many regional online platforms, providing home delivery services within a limited logistical distribution network.

Fruitday.com, Yiguo.com and Benlai.com are the three major shopping platforms for purchasing perishable fresh and frozen products online. All these shopping applications can be easily found on the internet and downloaded by 4G mobile users. 

31

Special Changing Markets EUROPEAN UNION ������______________________________________________________________

Economic Partnership Agreement with Southern African countries This development-oriented agreement is the first of its kind with an African region pursuing regional economic integration. The agreement was signed in June in Kasane, Botswana by Commissioner for Trade Cecilia Malmström on behalf of the EU.

C

ommissioner Malmström said: “Trade is a tool to spur economic growth and sustainable development. It’s also an important factor for integrating regions and forming stronger bonds between countries. With the Economic Partnership Agreement that we are signing, we want to base our trade relations with our partners in the Southern African region on commonly agreed, stable rules. Trade has helped lift millions of people from poverty throughout the years. Thanks to agreements like this one, we are preparing the ground for that process to continue.” Commissioner for International Cooperation and Development, Neven Mimica, added: “Fully utilizing the economic potential of the private sector and further strengthening trade is critical for the new global development agenda of the Sustainable Development Goals. Today's agreement can help us to tap this potential.”

The Economic Partnership Agreement (EPA) with Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland – the so-called “SADC EPA group” – is a development-oriented free trade agreement. In addition to this agreement, other regional agreements could also soon be signed with both the West African and the East African Community. The EPA takes into account the different levels of development of each partner and guarantees Botswana, Lesotho, Mozambique, Namibia, and Swaziland duty-free, quota-free access to the European market. South Africa will also benefit from enhanced market access, going beyond the existing bilateral arrangement. Furthermore, the agreement also increases the flexibility of Southern African producers to create combined shipments of products from different member countries, without the risk of losing their free access to the EU market. It also provides for a number of protective measures, for instance for nascent, fragile industries or for reasons of food security. The Southern African markets will open gradually and partially to EU exports in an asymmetric way. In the process of diversifying their economies and broadening production, imports of certain goods are important for Southern African nations – certain industrial products as well as seeds and machinery, for instance. The import duties on many of these so-called intermediary goods will be significantly reduced under the agreement, making the products more easily accessible to Southern African 32

entrepreneurs. For the South African market specifically, particular advantages will be gained

by EU producers of traditional quality products with a worldwide reputation – for example wines and food products – that will now get the exclusive right to use their traditional names, or 'geographical indications', in South Africa. Correspondingly, several South African geographical indications will, from now on, be protected on the EU market. By signing the agreement, all participants commit to acting towards sustainable development, including the upholding of social and environmental standards. The EPA also establishes a consultation procedure for environmental or labour issues and defines a

Under the agreement, Southern African markets will open gradually to EU exports.

Photo: Brodie

comprehensive list of areas in which the partners will cooperate to foster sustainable development.

In addition, a detailed chapter on development cooperation identifies trade-related areas that could benefit from EU financial support. 

Anzeigenleitung Hans-Joachim Fuhrmann Tel. +49-(0)211-9 91 04-20 fu@fruchthandel.de Internationale Fachzeitschrift für das gesamte Marketing im Grünen Sortiment FRUITNET MEDIA INTERNATIONAL GmbH info@fruchthandel.de, www.fruchthandel.de Lindemannstraße 12, 40237 Düsseldorf, ­Germany Postfach 10 55 51, 40046 Düsseldorf, Germany Tel. +49-(0)211-9 91 04-0, Fax +49-(0)211-66 31 62 Herausgeber H. Günter Schweinsberg Tel. +49-(0)211-9 91 04-0 gs@fruchthandel.de Geschäftsführung Robert Broadfoot Tel. +49-(0)211-9 91 04-13 rb@fruchthandel.de Ulrike Niggemann Tel. +49-(0)211-9 91 04-25 un@fruchthandel.de Chris White Tel. +44-20-7501 3710 chris@fruitnet.com Chefredaktion Gabriele Bastian Tel. +49-(0)211-9 91 04-21 ba@fruchthandel.de Redaktion Tel. +49-(0)211-9 91 04-35, Fax +49-(0)211-66 31 62 redaktion@fruchthandel.de Konstanze Richter Tel. +49-(0)211-9 91 04-17 ri@fruchthandel.de Michael Schotten Tel. +49-(0)211-9 91 04-16 ms@fruchthandel.de Online-Redaktion Michael Schotten Tel. +49-(0)211-9 91 04-16 ms@fruchthandel.de Geschäftsbereichsleiter Events + Awards Kaasten Reh Tel. +49-(0)211-9 91 04-10 kr@fruchthandel.de

Mediaberatung Tel. +49-(0)211-9 91 04-40, Fax +49-(0)211-66 31 62 anzeigen@fruchthandel.de Birgit Hannemann Tel. +49-(0)211-9 91 04-18 ha@fruchthandel.de Helmut Peskes Tel. +49-(0)211-9 91 04-19 hp@fruchthandel.de Sabine Reh Tel. +49-(0)211-9 91 04-26 sr@fruchthandel.de Projektmanagement Tünde Horvath Tel. +49-(0)211-9 91 04-11 th@fruchthandel.de Abonnements/Vertrieb Ingrid Bergmeister Tel. +49-(0)211-9 91 04-12 ib@fruchthandel.de Rechnungswesen Alfred Hein Tel. +49-(0)211-9 91 04-14 ah@fruchthandel.de Erscheint wöchentlich Bezugspreis Inland Jahresabonnement € 245,00 Bezugspreis Europa Jahresabonnement € 292,00 Bezugspreis Weltweit Jahresabonnement € 381,00 Preise inkl. Versandkosten, zzgl. MwSt Anzeigen laut Preisliste Nr. 47 vom 1. Januar 2016 © Fruitnet Media International GmbH, 2016 Druck D+L Reichenberg GmbH, Bocholt ISSN 0429-7830

FRESHNESS IN FOCUS DEUTSCHER OBST & GEMÜSE KONGRESS 2016 15–16.9.2016 DÜSSELDORF

NEOUS A T L U IM S H IT W W NO GLISH N E IN N IO T A L S N A TR

Germany‘s top information and networking event for the entire fresh produce supply chain

Highlights •

Meet more than 500 top decision-makers from the German retail, distribution and production sectors with great opportunities for networking

•

Discuss the most important issues affecting the international fresh produce supply chain today

•

Organised by experts for experts, professional and independent

Further Information?

•

dogkmailinglist@fruchthandel.de

• www.dogkongress.de

Organisers

with the support of

FLANDRIA: THE FRESH FAMILY. “When it comes

to food, only the best is good enough.

I owe that to my own family and of course to my customers.”

Kim and David Hermans, Rijkevorsel • 2 500 t Flandria tomatoes p.a.

• Certified premium quality • Sustainable production • Traceability back to the glasshouse

Campaign financed with assistance from the European Community LAVA cvba • Leuvensesteenweg 130 A B-3191 HEVER (Boortmeerbeek) • T +32 15 50 42 55 F +32 15 50 42 60 • lava@lava.be

www.flandria.be