HANDBOOK
«HOW TO SELL SUCESSFULLY INTO ORGANIC FOOD/FEED AND BEVERAGE MARKETS IN GERMANY AND AUSTRIA»
TABLE OF CONTENT 1. Who buys “organic” and why 5 1.1. Motivation to buy organic 5 1.2. Additional motive and preferences 7 1.2.1. Prefered products 7 1.2.2. Labels 7 2. Import of “organic products” from non-EU countries into EU - Guidelines for Importers
8
3.
9
Where buy consumers “organic” – target markets
3.1. Market size 9 3.2. Market segments 9 3.3. Target Groups 11 4.
Promising target groups for your offer
11
4.1. Specialised Retail 11 4.1.1. Who buys there 11 4.1.2. Market Players – Market Shares – Potential 11 4.2. Specialised Retail – healthy & organic food retail chains 13 4.2.1. Who buys there 13 4.2.2. Market Players – market Shares - Potential 13 4.3. Conventional retail chains 13 4.3.1. Who buys there 13 4.3.2. Market Players – market Shares - Potential 13 4.3.3. Organic private labels (retail chains) 14 4.3.4. Advantages working with retail chains 15
3 TABLE OF CONTENT 4.3.5. Disadvantages working with retail chains 16 4.3.6. UNKLAR Gliederung !! 17 5.
Alternative Distribution Channels
17
5.1. Strategic alternatives 17 5.2. Importers & Wholesalers of organic raw materials/semi products 17 5.3. Importers & Wholesalers of organic processed products 17 5.4. Industrial buyers of organic raw materials/semi-products 18 5.5. Your target groups 18 6.
Get in touch – what you need
19
6.1. Strong Contact Letter 19 6.2. Product Specification 22 6.3. Logistic Data Sheet 22 6.4. Certificates 23 7.
Contracts – “a tricky thing”
23
8.
Certificates
24
8.1. EU/National “Organic Labels” 24 8.2. Private “Organic Labels” 25 8.3. Others 25 9.
Packaging
25
9.1. Legal aspects of packaging 26 9.2. Trends in packaging materials 26
4
WHO BUYS «ORGANIC» AND WHY
UKRAINIAN ORGANIC EXPORT DAYS 2021
1.
5
WHO BUYS “ORGANIC” AND WHY
Understand your buyer – that is the way to succeed. We look now into German and Austrian buyers in order to understand their motivation. 1.1.
Motivation to buy “organic
Mindful and conscious consumers in developed societies demand an increasing amount of “feel good” factors when they consume. With buying “organic” German/Austrian consumers trigger not only one “feel good” factors but many of them as the following table shows: Motivation to buy “organic” – Germany 2020: 96 % care for 94 % care for 93 % care for 92 % care for 90 % care for 90 % care for 89 % care for 84 % care for 81 % care for 73 % care for 69 % care for 64 % care for 60 % care for 41 % care for
animal welfare maximum natural products regional origin/support of regional companies healthy eating and drinking/improvement of personal well-being less food-additives avoiding residues of pesticides social standards/fair income at producer level maintaining biodiversity safety to get GMO-free food taste availability of the products in the usual places of shopping safeguard ancient animal and plant breeds (biodiversity) nutrition for kids and during pregnancy advice through trained staff
*source: https://de.statista.com/statistik/daten/studie/2419/umfrage/bioprodukte-gruende-fuer-den-kauf/
Many of these motives are idealistic, status oriented, versatile and by far not only based on “healthy” or “free from pesticides” categories thinking. Nowadays “organic mindsets” combines with ideas like sustainability, fairness, feelgood-lifestyle and regionality. Some of these motives do not work in favour of Ukrainian suppliers – but we have some arguments in order to address these issues pro-actively:
“regional origin” - 93 % care for it You sell from Ukraine – that is not “regional”. Buyers define “regional” as “just around the corner”. Others as the “state” they live in. In Germany there are 15 states. Large ones like Bavaria with 13 Mio inhabitants or small ones like Saarland with 1 Mio. In Austria there are 9 states, also with strong identification of their citizens with the state. Strange but fact. Citizens of Vorarlberg (400.000 people) or Burgenland (300.000) identify with their country and behave accordingly. In exceptional cases buyers define “regional” even across national borders. E.g. Lake Constance region is bordered by 3 countries. All what comes from “around” is considered “regional”.
«HOW TO SELL SUCCESSFULLY INTO ORGANIC FOOD MARKETS IN GERMANY & AUSTRIA» – MAG. MARTIN PEIRL
6
The average German/Austrian consumer considers Ukraine “very far away” / “near Russia” / “far outside the European Union” / “difficult to get to” / …… But you may anticipate the “regional”-argument in your marketing communication and actively address it – just a few examples:
•
only 600 km from Vienna / 950 km from Munich means economic and
ecological reasonable transportation.
•
only 4 days between field and shelf because …..
•
fertile lands and favourable climatic conditions make up for the transportation
•
competitors also do have comparable distances to markets
•
“regional” is a relative issue. An orange from Italy consumed by a German
buyer is regional in relation to an orange from the U.S.A or Brazil.
•
We produce and sell in the “Danube Region” (which starts near Stuttgart and
ends at the Black Sea)
With such arguments you put prejudices into perspective and come up with facts in your favour. But take this “regional origin” thing serious! See the 93 %
DEFINE YOUR PRODUCT “LOCAL” - EXPLAIN - IN FAVOUR OF YOUR PRODUCT – ADDRESSING BUYER`S BENEFITS “social standards/fair income at producer sphere of influence” 89 % care for it Most people understand that in Switzerland average workers earn more than those in e. g. Pakistan. That`s not the point. The point is fairness and appropriate social standards. Affluent and modern consumers do not feel well when they buy products related to the slightest question marks in this respect. A powerful tool to inform sensitive consumers in this respect is a section on your website illuminating and explain some relevant facts (e.g. “ .. with 650 full time jobs we provide an important economic and social contribution in the region ….” or “we hire every year at least 30 apprentices and take care for their professional development …..” or … 1200 farmers benefit from long-term contracts with us…”) Another advice for future website modifications: A website showing real people with names, functions, photos, maybe even contact data provides the impression “human” / “fair” / “based on people`s efforts and work” – and it suggests stability and a human touch.
PRESENT YOUR COMPANY AS AN ORGANISATION CONSISTING OF REAL PEOPLE AND COMMUNICATE POSITIVE FACTS
UKRAINIAN ORGANIC EXPORT DAYS 2021
7
“availability at usual places of shopping” - 69 % care for it Buyers buy what comes into their attention when they do their usual, everyday shopping. With no or limited availability on the shelves of 30 – 50 retailers who cover 80 % of total market - you are “not existing for the buyer”. That is the strongest argument to go for a listing with a big retailer. You benefit from market presence & perception of your products by consumers & potential to sell large quantities over years. But accept. The nearer you go to final buyer the more demanding will become packaging, marketing, advertising, logistics, sales, promotion, …….. All this demands money, time, dedication, know-how ….. but in the long-run it pays back.
GET A VISION TO GET AS NEAR TO THE BUYER AS POSSIBLE LATER – AND SELL HOW IT IS FEASIBLE TODAY 1.2.
Additional motives and preferences
Some more spotlights on “the German / Austria consumer of organic food products” and their motives, preferences and motivating factors 1.2.1. Preferred products 18 % of all Germans buy ONLY organic fruit and vegetables, 12 % do so in Austria Organic milk, yoghurt, potatoes and eggs have already a market share of more than 20 % in retail chains. Vegetables have 18 % and fresh fruit 12 %. Range of offered “organic” products is constantly growing and spreading into new categories:
see
organic beer, organic convenience food, organic teas, …………
1.2.2. Labels German/Austrian buyers are keen for “guaranties” expressed through paper, certificates and quality labels.
«HOW TO SELL SUCCESSFULLY INTO ORGANIC FOOD MARKETS IN GERMANY & AUSTRIA» – MAG. MARTIN PEIRL
8
89.905 products bear the „Bio-Siegel”. After a long time with dozens of labels only confusing consumers now the official “Bio-Siegel” is a strong and recognised mark and guidance for consumers. Also imported products may bear this label. All relevant information you find in English language under the following link: https://www.oekolandbau.de/en/bio-siegel/information-for-companies/label-use/labelling-rules/ In recent years “German Bio Siegel” was replaced or added with the EU label.
These 2 labels are the “official” ones – all others are private labels of certain companies, cooperatives, etc.
2. IMPORTS OF ORGANIC PRODUCTS FROM THIRD COUNTRIES INTO THE EUROPEAN UNION The legal framework important for exporters in non-EU countries may be summarized in the following guidline: Guidelines for Imports of Organic Products from Third Countries into the European Union - Legal bases: Regulation (EC) No. 834/2007 as amended Regulation (EC) No. 1235/2008 as amended https://www.oekolandbau.de/fileadmin/redaktion/Bildarchiv/Bio-Siegel/user_upload/ Dokumente/Broschueren/LeitlinienImporteureEN.pdf An informative and even more comprehensive brochure showing the procedure of import and certification you find und the link below. The document is called. “Import of Organic Products from Third Countries - Guidelines and decision support tools to import from countries outside the European Union” https://www.oekolandbau.de/fileadmin/redaktion/Bildarchiv/Bio-Siegel/user_upload/ Dokumente/Broschueren/flyer_2016_importeausdrittlaender_din_a5_en_druck.pdf
9
UKRAINIAN ORGANIC EXPORT DAYS 2021
3.
WHERE CONSUMERS BUY “ORGANIC” – TARGET MARKETS
3.1.
Market size organic food
GERMANY 2020 AUSTRIA 2020
- TURNOVER € 14.999.000.000 - TURNOVER € 2.400.000.000
+ 22 % IN COMPARISION TO 2019 ! + 20 % IN COMPARISION TO 2019 !
Despite COVID situation total markets grows fast & substantially ! But not in all segments (see below) at the same speed and extent Now let us carefully look into the different market segments and investigate the attractiveness of the segments. 3.2. Market segments “organic food” Interesting to see the market segments “organic food” – market shares – market growth.
Where consumers buy organic food – “the direct market”
RETAIL CONVENTIONAL RETAIL SPECIALIZED IN ORGANIC/HEALTY/VEGAN PRODUCTS CATERING/GASTRONOMY/FOOD SERVICE MARKETS, FARM SHOPS* (*NOT OPEN FOR OUR CONSIDERATION – ONLY LOCAL PRODUCTS)
further companies serving the “organic food market” – “the indirect market”
IMPORTERS & WHOLESALERS OF ORGANIC RAW MATERIALS AND SEMI-PRODUCTS IMPORTERS & WHOLESALERS OF ORGANIC PROCESSED PRODUCTS INDUSTRIAL BUYERS OF ORGANIC RAW MATERIALS AND SEMI-PRODUCTS
Let us have a look into development in organic food markets in the different market segments in the past 3 years. (expected growth rates for 2021 will substantially exceed the figures from 2020)
Organic food sales Germany in “retail specialised” against “retail conventional” and “others” market shares – growth 2018 – 2020:
«HOW TO SELL SUCCESSFULLY INTO ORGANIC FOOD MARKETS IN GERMANY & AUSTRIA» – MAG. MARTIN PEIRL
10
figures from 2020 https: //www.boelw.de/f ileadmin/user_upload/Dokumente/Zahlen_und_Fakten/ Brosch%C3%BCre_2021/B%C3%96LW_Branchenreport_2021_web.pdf
Interpretation – What do these figures tell us:
60 % of turnover comes from “General Retail” = 85 % of the market ! 25 % of turnover comes from “Specialized Retail”
LEADING SALES CHANNELS FOR ORGANIC PRODUCTS IN GERMANY “Others” 15%
“Spcialized Retail” 25%
“General Conventional” 60%
What else?
SIGNIFICANT AND ABOVE AVERAGE GROWTH AND BIG “VOLUME” COME FROM “GENERAL RETAIL” “SPECIALIZED RETAIL” GROWS – BUT BELOW AVERAGE (IF AT ALL) “OTHERS” LIKE DIRECT FARM SALES, MARKETS, DIRECT ON-LINE SALES ETC. ARE BOOMING - BUT WE MAY NOT SERVE THIS MARKET FROM UKRAINE
UKRAINIAN ORGANIC EXPORT DAYS 2021
11
That means
“ORGANIC” GOES MAINSTREAM/MASS-MARKET/MASS PRODUCED DEMANDING QUANTITIES/STANDARDISATION/STABLE QUALITY
3.3. Target groups
Our market takes place in: 1. 2.
“GENERAL RETAIL” AND “SPECIALISED RETAIL”
3.
“INDUSTRIAL BUYERS” SERVING PRODUCERS OF ORGANIC PRODUCTS (AND INDIRECTLY RETAIL & GASTRONOMY/CATERING)
“IMPORTERS/WHOLESALERS” SERVING “RETAIL”
and these 3 groups form our target groups (to select from for the most effective market approach)
4.
PROMISING TARGET GROUPS FOR YOUR OFFER
One of the most powerful rules in marketing and sales is: the better you define your target group and adapt your offer to it the better you sell. The rule is old – but true. Let us have a close look into your possible target groups. Who buys there and who are the key players, their potential and advantages and disadvantages of working with them. 4.1.
Specialised Retail chains – pure organic food chains
4.1.1. who buys there These shops offer only organic/healthy/vegan products to an audience strongly dedicated to these kind of product and the values behind these products. They represent 25 % of the total market. This segment grows but relative market shares to other target groups decreases (see above statistic). The buyers are most critical, read all what is written on the packages (and what`s published in the web, in journals, etc. ) and rate very strict. When they are satisfied they tell. In case not they tell also. They like to speak about eating habits, about health, about sustainability, about ecology and many related issues. 4.1.2. Market Players – Market Shares – Potential
«HOW TO SELL SUCCESSFULLY INTO ORGANIC FOOD MARKETS IN GERMANY & AUSTRIA» – MAG. MARTIN PEIRL
GERMANY
AUSTRIA
“DENN`S BIO” “SUPER NATUR MARKT” “BIO COMPANY” “BASIC” “SUPER BIO MARKT” “VOLLCORNER BIO MARKT”
“DENN`S” “REFORM MARTIN”
12
Market shares, number of outlets – and what we may learn from it:
“Denn`s bio” (dennree GmbH) + “Super Natur Markt” + „Bio Company“ cover large part of total market in Germany. They are clear market leaders. But note: In Germany are 81 cities exceeding 100.000 inhabitants. Denn`s as market leader runs now approx. 230 stores. Means there are a handful in the real big cities and maybe one in the rest of them. That is not “just around the corner”. Meaning their customers have to go for them. Sometimes by car - and far. And remember chapter “1.1. Motivation to buy organic” – The availability at usual places of shopping is an outstanding strong motivator to buy “organic”. That means these highly specialised stores are not everywhere and many consumers are far away. This - and maybe the relative dogmatic attitude of their customers - could highly likely be the reason why growth rates of these “specialised retail chains” are well below those of “conventional retail chains with their organic brands and parts of product range” where the masses come and buy in their “every day shopping routine”.
UKRAINIAN ORGANIC EXPORT DAYS 2021
13
4.2. Retail specialized - healthy & organic food retail chains 4.2.1. Who buys there In these shops product range is not so strictly selected and simply “healthy” products also find their way into the shelves. In addition to food and beverages you find in these shops also food supplements, cosmetic products, food for special diets, .. 4.2.2. Marktet Players - Potential
The market players are:
TEGUT EBL-NATURKOST NATUR GUT VITALIA REFORMHÄUSER VITA NOVA
As the profiles of these chains differ a bit. The potential depends on an exact fit between your product offer and the profile/philosophy of the chain. Therefore try to find out what the company stands for, what is on their self and how does your product fit there. 4.3. Conventional retail chains – organic range/organic private label This combination was the driving force of growth during the past years. Organic arrived at the places of every-day shopping. 4.3.1. Who buys there The large supermarket chains are everywhere and buyers come in masses for their dayto-day shopping routines. The organic range in these shops has been constantly growing and now these shops sell 60 % of the the total of organic food products sold in Germany/Austria. And this segment grows over 20 % at the moment – every year !! And 2021 even stronger! The average “organic buyer” in these shops is less critical, less dedicated to ecologic to ecologic and lifestyle matters and a bit more price sensitive than the buyers in the “specialised retail chains”. They tend to buy less because of dogmatic and ideology reasons and are very often not exclusive buyers of organic food. This leaves room for spontaneous decisions and “try-outs”. 4.3.2. Market players – Market Shares – Potential We see a high concentration on the market. A few divide the market among themselves. In both countries 4 chains dominate to market. All of these retail chains carry a steadily growing range of organic products, also in new categories. And all run own “organic private labels” beside the “branded organic products” on
«HOW TO SELL SUCCESSFULLY INTO ORGANIC FOOD MARKETS IN GERMANY & AUSTRIA» – MAG. MARTIN PEIRL
14
their shelves. The “organic sections” as they were usual some years ago completely disappeared and the organic products can be found within their product category in the shop. GERMANY
AUSTRIA
REWE SPAR HOFER (ALDI SUBSIDIARY)
REWE EDEKA ALDI NORD ALDI SÜD LIDL KAUFLAND NETTO REAL NORMA GLOBUS HIT FAMILA METRO
LIDL M-PREIS UNIMARKT/TRANSGOURMET (TOP TEAM)
METRO
*fat print = approx. 70 – 80 % of market
4.3.3. Organic private labels of retail All retailers, specialised or conventional run their own “organic private labels” beside the “branded organic products” on their shelves. These labels form a large market potential for you. Some examples: Retail organic private labels Germany
Retail organic private labels Austria
Economic importance – potential for you: In order to highlight significance of such labels an example: SPAR with it´s organic product label
achieved in 2020 a turnover of € 471.000.000,-- (471 Mio €) in Austria ! and ranks now 1st in front of
UKRAINIAN ORGANIC EXPORT DAYS 2021
15
“Ja-Natürlich” the organic product label of REWE Group in Austria. The growth rate for the SPAR “Natur pur” logo is remarkable. After Mr. Gerhard Drexel, CEO SPAR: “growth rates are over 20 %. More than 1.000 organic products are sold under this brand – among approx. 4.000 in total.” Mr. Drexel further outlines: “The secret of success is a clear focus on “regional origin”. Austrian suppliers enjoy preference in case of equal quality. 10.000 Austrian organic farmers benefit from this.”* *source interview in “Key Account” trade journal 2020/6
That seems at first sight not favourable for the Ukrainian exporter. But note: You may supply when you have
BETTER QUALITY (MAYBE A BETTER PRICE ALSO COUNTS) A UNIQUE PRODUCT A PRODUCT NOT ABLE TO SOURCE IN AUSTRIA (AT THIS TIME, AT THIS QUANTITIES) …….
The mentioned figures above are for Austria. Take these – multiply by 10 – and you do have the equivalent figures for Germany! That means under the private labels of REWE, EDEKA, etc. …. waits a potential of many billions of € for your as a potential supplier.
Within these private labels is considerable room to sell your products. 4.3.4. Advantages working with retail chains
+++
Defined time and quantity
Contracts refer to a certain quantity, often a large ones & over a defined period of time. This is a good ground for planning.
+++
Minimal risk of non-payment As a matter of fact retail chains are huge companies and very seldom fail. And even when they fail they got bought by competitors, usually overtaking liabilities.
+++
Large scale deliveries Logistic systems of large retailers are designed for large deliveries. But not every product category may count on full truck-loads. With more specialized retailers with limited number of outlets be prepared to quote and to deliver pallets. When you do have e.g. an organic snack with 1.000 sales units on the palette and customer is organic retail chain with e.g. 50 outlets they will not take more than a few pallets from your product. Or they will ask you to go for an importer and come back with an indirect offer.
«HOW TO SELL SUCCESSFULLY INTO ORGANIC FOOD MARKETS IN GERMANY & AUSTRIA» – MAG. MARTIN PEIRL
+++
16
real presence on the market – visibility
Being on the shelf of a (large) retailer means you exist for the the majority of buyers. Unfortunately retail is highly concentrated. And when you fail being listed with the 10 or 15 possible target companies you are forced to go for a niche market . But in the niche your visibility is extremely limited. The majority of buyers do not see you there. 4.3.5. Disadvantages working with retail chains Strict/demanding and risky contracts in terms of:
--- Product liability (conformity to regulations) and compliance with regulations,
standards, laws, etc.
Contracts demands your guarantee that products fully comply with regulations, standards, laws, EU guidelines, …………………You will read many clauses about this – with lots of liabilities and risks at your side. Careful consideration, professional advice and a good product liability insurance is necessary.
--- Costs
Many contracts stipulate costs to be paid by the supplier as e.g. product inspection costs, manipulation fees, fees failing a (short) delivery interval at customers warehouse, fees for any kind of shortcoming.
--- Contract obligations
Many obligations / few rights for you as the weaker partner – that have many of these contracts in common.
--- Listing fees
Such fees are usual and carry different names. They are from the legal point of view not problematic and not forbidden. But do not forget them in your calculation. In case you are confronted with such a demand after you quoted, insist to amend your quote accordingly.
--- demanding administration
Retailers sometimes demand to quote, confirm orders, and administrate the whole business process in a special supplier section in their IT system. Means you need to train a person to do so and take care for a back-up. Changing rules, regulations, laws or simply constant new demands of the buyers are frequent, always urgent and always unpaid. Even a lot of work is to do. Look what is printed on an average packaging. Recycling labels, organic labels, importers, … every necessary change you will administrate – and bear the costs.
--- formal, sometimes inflexible communication
Large retailers handle thousands of suppliers. This requires of course formalistic procedures. This is often perceived negatively at supplier side. But it is in the nature of the deal and the related communication needs.
UKRAINIAN ORGANIC EXPORT DAYS 2021
17
--- High concentration on the market:
In Germany EDEKA + REWE + LIDL/Kaufhof + ALDI represent 75 % of market. Situation in Austria similar. You as supplier have a very simple problem. When you fail to sell to the very few possible buyers you are through. In Austria you have “less than 10 shots” – In Germany maybe 20. In case you fail only a niche strategy is open to you. Or a long time to come where you try it again, and again, and again,…
Conclusion All these arguments lead us to alternative strategic options – and alternative distribution channels. At least “just for the case …”. But often as a real and more appropriate approach to go for the market.
5.
ALTERNATIVE DISTRIBUTION CHANNELS
5.1.
Strategic alternatives and what they may have to offer
Having considered all the “pros” and “cons” of working with retail chains you may come to the conclusion to head for alternative distributions channels. Or maybe you failed with retail and seek now new chances. That also could be a reason to aim for alternative distribution channels as 5.2. Importers & Wholesalers organic raw materials/semi-products Working with them could provide some advantages for you:
+++
Importers/Wholesalers know better requirements, customers and do have often direct access to retailers.
+++
Importers/wholesalers are experienced in risk prevention
+++
Importers/wholesalers serve additional markets not easy accessible in direct business as Catering/gastronomy, markets, … which are not covered by retail at all.
5.3. Importers & Wholesalers of organic processed products
+++ same advantages apply as in 5.2.
«HOW TO SELL SUCCESSFULLY INTO ORGANIC FOOD MARKETS IN GERMANY & AUSTRIA» – MAG. MARTIN PEIRL
18
5.4. Industrial buyers of organic raw materials/semi-products This target group really could be a feasible strategic alternative because of many reasons:
+++
Industrial buyer represent a large and growing market for organic suppliers of bulk and semi products
+++ the number of Industrial buyers
is considerably higher than than the number of retail chains. That means for you as producer more chances to try – more to succeed – “standing on more than one leg”
+++
many industrial producer entered recently or plan to enter the “organic” market and introduce organic product lines. Means your target market is constantly growing.
+++
transferring tasks, risks and costs to the buyer (packing, sorting, checking, certifying,….)
From all these considerations we deduct YOUR TARGET GROUPS – see below: 5.5. Your target groups That means your target groups to select from are:
4. 5.
“GENERAL RETAIL” AND “SPECIALISED RETAIL”
6.
“INDUSTRIAL BUYERS” SERVING PRODUCERS OF ORGANIC PRODUCTS (AND INDIRECTLY RETAIL & GASTRONOMY/CATERING)
“IMPORTERS/WHOLESALERS” SERVING “RETAIL”
Enclosed you find a DATABASE with example addresses and сontact persons of large numbers of companies in these sectors. The persons are mentioned with their function and many of them with their personal contact data. All these person were invited to take part in the b2b matchmaking event. But even when they did not register and take part it does not necessarily mean that they are not interested. Continue to get in touch with them. Offer your products. And sooner or later you will succeed.
UKRAINIAN ORGANIC EXPORT DAYS 2021
6.
19
GOT IN TOUCH – WHAT YOU NEED
Get in touch – offer your product well focused to the appropriate target group. Still done with direct communication. Irrespective of the media you use. The basics are still the same. 6.1.
Strong Contact Letter
Strong USP (Unique Selling Proposition) – why should your product be considered. Tell the reader clearly the following:
Tell the reader clearly the following:
EXPLICIT – TELL EXACTLY WHY Say for example: “You carry product X with a fruit content of 30 % for 1,99 on your shelves – we offer our alternative Y containing 14 % more fruit and with an assumed margin of Z % you may offer your buyers an alternative at 1,79” or “Our research shows that your range does not cover a product in the € 2,-- to 3,50 range. Ours would perfectly fit in this gap with further advantes to you as ……”
Use figures/percentages/facts instead of assertions!
«HOW TO SELL SUCCESSFULLY INTO ORGANIC FOOD MARKETS IN GERMANY & AUSTRIA» – MAG. MARTIN PEIRL
20
FOCUS BETTER ON ONE – YOUR STRONGEST – PRODUCT (THE IDEA OF THE “PRODUCT TRAIN”) You strongest product/service is your “product locomotive” – talk first and only about the “locomotive”. About the “waggons” (what else you have) you may talk later. When dialogue with buyer is already on.
Focus / focus / focus on your strongest point!
USE REFERENCES “We have been selling with METRO France for 2 ½ years now and intend to reach out for Germany.” or “We increased our production capacity by X % - what brought unit costs down by at least 15 % from which you benefit immediately …….” or “in Sweden, Denmark and the Netherlands we achieved so far a position among the top 3 in the market with being listed with A, B, C and D. or “In case you list us you may strengthen your shelf offer with a top 3 product,…..”
When excellent companies buy your product – tell about!
ADDRESS PRO-ACTIVELY POSSIBLE OBJECTIONS “Yes – our product is Non-EU – but from field to shelf it is only approx. 900 km. What we harvest on Tuesday you have on the shelf next Monday,……” or “in case you may not accept quotes DAP we are in a position to quote and deliver through …….”
Anticipate and address objections
UKRAINIAN ORGANIC EXPORT DAYS 2021
21
COMMUNICATE AS PERSON TO ANOTHER PERSON “me, the product manager Mr. X and our logistics department lead by Mrs. Y will take care of every delivery to you. ….. you may call us at any moment, all of us speak English, Mrs. Y even German at advanced level ……”
Be personal!
ALWAYS CLOSE THE LETTER WITH A CLEAR INVITATION TO ACT NOW “..send requirements today to …. simply call and we immediately let you have a sample by express mail …… confirm your visit at our stand at ANUGA on ….. “ Tell
explicitly what to do NOW!
FOLLOW UP YOUR LETTER BY TELEPHONE – NOT PUSHING BUT SIMPLY ASKING “did you receive my proposal ….. could this be interesting to you …. …. how may we proceed ….
Follow up in person!
SIGN THE LETTER/E-MAIL WITH A SIGNATURE A reader of a business message wants to understand who is writing (company and person). All this information is called signature and at the bottom of the letter/e-mail. It should contain company name, website, address, contact data, your full name and your function (you may not believe how many mails I receive without this !) Tell who you are!
USE DATABASES AND REPEAT YOUR CONTACT ATTEMPTS – Repeat not too often but regularly (6 – 10 times per year is OK for most businesspeople). Statistics show that the majority of reactions come between the 3rd and 6th contact attempt.
Be systematical and automatised
«HOW TO SELL SUCCESSFULLY INTO ORGANIC FOOD MARKETS IN GERMANY & AUSTRIA» – MAG. MARTIN PEIRL
22
KEEP IN MIND – WE ARE TALKING OF INITIAL CONTACT LETTER • • • •
What may not be said in 5 – 8 compact sentences better do not say at all Focus on your strongest point Do not leave to reader to select “what he could be interested in” Research exactly your target group – the better you know to whom you write the better and the more appropriate your message will be.
TELL WHAT YOU HAVE TO SAY IN GERMAN LANGUAGE – CLEAR – AND NICELY DESIGNED:
6.2. Product Specification Clear description of your product. When it is designed well it is not mistake. But content is the key. On one sight – all information necessary.
Remember: as we focus on one/few products – not many documents have to be sent.
6.3. Logistic data sheet How many units in carton, how many cartons in a layer, how many layers on the palette,…. Exact dimensions, weights, …..
UKRAINIAN ORGANIC EXPORT DAYS 2021
23
this information serves calculation purposes 6.4. Certificates Many certificates exist – even more are demanded. You think yours are relevant. But when you do not ask the other side you may be wrong. Note the differences of certificate. Some refer to your production processes, others to the compliance of your packaging. And others to special aspects of your product/service/processes. Consider their relevance – list them - explain why you add them to your letter:
7.
CONTRACTS – A TRICKY THING
Contracts with retailers/importers/wholesalers always cover critical issues for you as Product liability (conformity to regulations) and compliance with regulations, standards, laws, etc. Costs Contract obligations Cost compensations Listing fees (open, hidden) Required quality labels Not easy administration Always when large and powerful market participant concludes contracts with smaller and not so powerful market participants the content of the contracted tends to be a bit “unbalanced”. Apart from this you highly likely see “the contract” only after presentation of your product/ samples/quotation in the final stage of your negotiation. Whenever you detect clauses causing additional costs or additional risks do not hesitate to demand an appropriate adaption of your prices and amend your quote accordingly. For those interested I may provide on demand a sample contract with a large retail chain. You will be astonished what you read. But keep in mind – these all is not “Word of God” – but (hopefully ) negotiable.
«HOW TO SELL SUCCESSFULLY INTO ORGANIC FOOD MARKETS IN GERMANY & AUSTRIA» – MAG. MARTIN PEIRL
8.
24
CERTIFICATES / LABELS
Source: https://www.ecowoman.de/ernaehrung/essen/bio-siegel-uebersicht-diesen-bio-siegeln-kannstdu-trauen-biokreis-bioland-5708
All these labels – with exception of the EU organic label - describe certain criteria laid down individually. They are issued by companies, cooperatives, or similar. 8.1.
EU and national “organic labels” with EU government background
EU & German national :
Austrian national :
When your product should bear a label declaring it as «ecological» or «organic» within the EU, you have to comply with the applicable provisions of EU Organic Regulation 834/2007 and be certified accordingly. In order to check on all levels of trade and processing every country in the EU has certified organisations and companies entitled to check the compliance of products and procedures with laws and regulations concerning organic products and raw materials. The organic logo may only be worn by products for which an approved inspection body has certified that they have been organically produced. This means that they have to meet strict conditions for manufacture, processing, transport and storage. The logo is only permitted on products that consist of at least 95% organic ingredients and which also meet strict requirements for the remaining 5%. In addition to the EU organic logo, there must be a code number of the inspection body and the place where the agricultural raw materials of the product were produced. As Ukrainian supplier you contact your national control organisation. Further information you find on https://www.oekolandbau.de/fileadmin/redaktion/Bildarchiv/Bio-Siegel/
UKRAINIAN ORGANIC EXPORT DAYS 2021
25
user_upload/Dokumente/Broschueren/LeitlinienImporteureEN.pdf to obtain the label and how controls take place. The mentioned additional controls is applicable for suppliers from Ukraine. Details you find in the following EU guideline: EUROPEAN COMMISSION DIRECTORATE-GENERAL FOR AGRICULTURE AND RURAL DEVELOPMENT 16.12.2020 Guidelines on additional official controls on products originating from Ukraine, Kazakhstan, Moldova, Turkey and Russian Federation https://ec.europa.eu/info/sites/default/files/food-farming-fisheries/farming/documents/ guidelines-addoffctrl-ukraine-kazakhstan-moldova-turkey-russia_en.pdf 8.2. Organic or similar labels with private background Talking to potential buyers you may be confronted with demand for further labels in addition to the EU or national ones. All these labels are issued by private organisations like companies, purchasing- or marketing cooperatives or similar. They all set up their own rules. Whenever you want to deal with a company insisting e.g. on a “DEMETER” logo you have to become a member there and fulfil the criteria stipulated. The costs may range from a few hundred Euros to 5-digit sum in Euro depending on your turnover and other criteria. Website provide good information – often only in German language. 8.3. Other certificates and labels From certificates covering your production process or your packaging materials or your membership in a recycling system (obligatory in many countries) a long list is possible.
9.
PACKAGING
The nearer you target your product to the consumer the more important becomes packaging in terms of additional functions apart from simple logistic demands. When you decide about packaging consider the following:
Packaging has to correspond with the “narrative of the product” Think from position of your final customer Then think of the category of your product and the related logistic, cost and marketing requirements to your packaging
«HOW TO SELL SUCCESSFULLY INTO ORGANIC FOOD MARKETS IN GERMANY & AUSTRIA» – MAG. MARTIN PEIRL
9.1.
26
Legal aspects of packaging
Legal aspects of packaging of organic products in the EU: Organic products are usually marketed in packaged form. However, the EU legislation on organic farming does not contain any specific requirements for the packaging of organic food. Only in Article 31 of Regulation 889/2008 is it indicated that packaging must be closed in such a way that the contents cannot be removed without tampering or destroying the packaging (or a seal or a lead seal). Such packaging makes further measures to secure containers and means of transport superfluous. Important: any packaging has to correspond with REGULATION (EC) No 1935/2004 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 October 2004 on materials and articles intended to come into contact with food and repealing Directives 80/590/ EEC and 89/109/EEC https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:338:0004:0017:en:PDF A guidline for appropriate packaging of organic foods you find (in german) on https://www.boelw.de/f ileadmin/user_upload/Dokumente/Verpackungsleitfaden/ B%C3%96LW_verpackungsleitfaden.pdf 9.2. Trends in packaging materials Best focus on trends in future trends in packaging is the leading trade fair INTERPACK / Düsseldorf 4. – 10.5. 2023 In 2017 the summary of this trends was: https://www.interpack.com/cgi-bin/md_interpack/lib/all/lob/return_download.cgi/ PackagingTrends17_EN_rgb_f in150317.pdf?ticket=g_u_e_s_t&bid=5354&no_mime_ type=0 Next INTERPACK only will be 2023. But there is an alternative in 2021 - FACHPACK 2021 in Nürnberg: https://www.fachpack.de/en/become-visitor
key topic: eco-friendly packaging
Trends in packaging:
avoid
(no packaging at the point of sales at all)
not only on markets and in farmshops but in the meantime in supermarkets common practice: https://www.rewe.de/nachhaltigkeit/unsere-ziele/projekte/unverpackt/ (scroll down and see fotos)
replace / reduce / recycle
recycling/compostability alone was yesterday
UKRAINIAN ORGANIC EXPORT DAYS 2021
27
replace/reduce + recycling the the rest is driven by conscious, affluent & modern consumers and large retailers. This REWE video shows well the actual trends with fruit/vegetables https: //www.rewe-group.com/de/nachhaltigkeit/engagements-und-projekte/ verpackungen/ For all catogories applies - replace
plastic :
by organic material, e.g. cellulose film, bio-plastic, … by smaller units in size, e.g. stickers instead of bags, …. by paper, carton or other environmental friendly materials even low-end discounters as PENNY (REWE Group) already achieved this goal. https://www.penny.at/unser-penny/nachhaltigkeit/alle-initiativen/raus-aus-plastik
Example of “up-to-date” packaging meeting a large number of demands as mono-material packaging - from “natural material” facilitates recycling offers visibility of the product AND protection may carry “relevant narrative” of the product compatible with digital marketing and logistic demands (QR codes for further info, …) highly flexible in terms of size, design, content https://www.frutmac.com/de/news/zippsolution
TRENDS = AVOID / REPLACE / REDUCE / RECYCLE & MONO MATERIAL, NATURAL MATERIAL, VISIBILITY OF PRODUCT, TELLING “A BEAUTIFUL STORY”, COMPATIBLE WITH DIGITAL, FLEXIBLE Comprehensive information and guidelines for ecologic packaging suitable for organic products you may find (only in German language) at https://www.boelw.de/news/ nachhaltige-verpackung-von-bio-lebensmitteln/
Organizers:
Under the patronage of:
Supported by:
Strategic partners:
This publication has been produced with the support of: Switzerland within the framework of the Swiss-Ukrainian Program «Higher Value-Added Trade from the Organic and Dairy Sector in Ukraine» implemented by the Research Institute of Organic Agriculture (FiBL, Switzerland) in partnership with SAFOSO AG (Switzerland) and The U.S. Agency for International Development (USAID) through thе USAID Competitive Economy Program in Ukraine (CEP) and thе USAID’s Agriculture Growing Rural Opportunities Activity (AGRO) implemented by Chemonics International.
Mag. Marin Peirl Managing Partner Avantgarde GmbH Avantgarde GmbH Wehlistrasse 35-43/1/19 A-1200 Wien www.avantgarde.or.at martin.peirl@avantgarde.or.at + 43 664 547 05 61
