Eu Market Survey Pre Frui

EU MARKET SURVEY 2005

Preserved fruit and vegetables

EU MARKET SURVEY 2005

PRESERVED FRUIT & VEGETABLES Compiled for CBI by: Ceres Company in collaboration with Ir. A.F. Eshuis

August 2005

DISCLAIMER CBI MARKET INFORMATION TOOLS Although the content of its market information tools has been compiled with the greatest care, the Centre for the Promotion of Imports from developing countries (CBI) is not able to guarantee that the information provided is accurate and/or exhaustive, and cannot be held liable for claims pertaining to use of the information. In the case of the market publications, neither CBI nor the authors of the publications accept responsibility for the use which might be made of the information. Furthermore, the information shall not be construed as legal advice. Original documents should, therefore, always be consulted where appropriate. The information does not release the reader from the responsibility of complying with any relevant legislation, regulations, jurisdiction or changes/updates of same. In the case of the Internet tools, CBI aims at minimising disruption caused by technical errors. However, CBI cannot guarantee that its service will not be interrupted or otherwise affected by technical problems. CBI accepts no responsibility with regard to problems incurred as a result of using this site or any linked external sites. The information provided is aimed at assisting the CBI target group, i.e. exporters and business support organisations (BSOs) in developing countries. It may, therefore, not be used for re-sale, the provision of consultancy services, redistribution or the building of databases, on a commercial basis. For utilization of the CBI market information tools by the CBI target group on a non-commercial basis, the condition applies that CBI is referred to as the source of the information. All other use is prohibited, unless explicitly approved in writing by CBI. Photo courtesy: Joost van Velsen for Ceres Company

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TABLE OF CONTENTS

REPORT SUMMARY

4

INTRODUCTION

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PART A: 1

2 3

4 5

6 7

8

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PRODUCT CHARACTERISTICS 1.1 Product groups 1.2 Customs/Statistical product classification INTRODUCTION TO THE EU MARKET INDUSTRIAL DEMAND 3.1 Overview of EU food market 3.2 Market segmentation 3.3 Patterns and trends in industrial demand PRODUCTION IMPORTS 5.1 Total EU imports 5.2 Imports by product groups 5.3 The role of developing countries EXPORTS TRADE STRUCTURE 7.1 EU trade channels 7.2 Distribution channels for developing country exporters PRICES 8.1 Price developments 8.2 Sources of price information EU MARKET ACCESS REQUIREMENTS 9.1 Non-tariff trade barriers 9.2 Tariffs and quotas

PART B: 10

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EU MARKET INFORMATION AND EU MARKET ACCESS REQUIREMENTS 10 10 12 13 16 16 21 22 27 32 32 43 55 58 63 63 67 68 68 68 69 69 81

EXPORT MARKETING GUIDELINES: ANALYSIS AND STRATEGY

EXTERNAL ANALYSIS: MARKET AUDIT 10.1 Market developments and opportunities 10.2 Competitive analysis 10.3 Sales channel assessment 10.4 Logistics 10.5 Value chain / price structure 10.6 Product profiles INTERNAL ANALYSIS: COMPANY AUDIT 11.1 Product standards, quality, USP and production capacity 11.2 Logistics 11.3 Marketing and sales 11.4 Financing 11.5 Capabilities

87 88 88 89 90 91 93 97 97 98 98 99 100

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12 DECISION MAKING 12.1 SWOT and situation analysis 12.2 Strategic options & objectives 13 EXPORT MARKETING 13.1 Matching products and the product range 13.2 Building up a relationship with a suitable trade partner 13.3 Drawing up an offer 13.4 Handling the contract 13.5 Sales promotion

101 101 101 103 103 103 106 107 108

APPENDICES 1 DETAILED HS CODES 2 DETAILED IMPORT/EXPORT STATISTICS 3 USEFUL ADDRESSES 3.1 Standards organizations 3.2 Sources of price information 3.3 Trade associations 3.4 Trade fair organizers 3.5 Trade press 3.6 Other useful addresses 4 LIST OF DEVELOPING COUNTRIES 5 USEFUL INTERNET SITES

100 100 114 121 122 122 122 124 125 126 128 129

Update of EU Market Survey Preserved Fruit and Vegetables (July 2004)

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REPORT SUMMARY This survey profiles the EU market for selected preserved fruit and vegetables, both as an ingredient for industrial use and as consumer products. The emphasis of the survey lies on preserved fruit and vegetables for industrial use, as this segment offers the best market opportunities for suppliers in developing countries. The following EU markets are highlighted: Germany, France, United Kingdom, Belgium, The Netherlands, Italy and Spain. Further, the new EU countries Poland, Czech Republic and Hungary are highlighted. These countries are major importers of preserved fruit and vegetables. The product groups discussed in this survey are used as industrial or consumer products, or both. An indication of the main application is given for each group: Fruit juices/concentrates Canned vegetables Canned fruit Frozen vegetables Frozen fruit Dried fruit Dried vegetables Provisionally preserved fruit and vegetables

Industrial Consumer Consumer Industrial Industrial Consumer and industrial Industrial Industrial

Market demand It is difficult to give figures on the industrial demand for preserved fruit and vegetables. The larger part of preserved fruit and vegetables is imported as ingredients for the food processing industry. After import, these ingredients are processed to become consumer products (fruit juice) or used as an ingredient to prepare consumer products (dried vegetables). The main industrial end-users are the beverage industry (fruit juice/concentrate), jam industry (frozen fruit), ready-meals industry (dried/frozen vegetables), soup industry (dried vegetables), breakfast cereal and bakery industry and packers (dried fruit). Trends which have an impact on the demand for food products and, consequently, on the demand for preserved fruit and vegetables include: increasing preference for safe and healthy food, increased fruit and vegetable consumption (they contain vitamins and natural antioxidants), increasing interest in organic products, more convenience meals (ready meals), interest in exotic and ethnic food and ‘grazing’ (i.e. eating more snacks in between the usual meals). Another trend is that the relationship between ingredients suppliers and industrial users has changed: the industrial user buys not only additives and ingredients from the supplier, but also his expertise and experience. Another change is that ingredients stocks held by manufacturers are increasingly minimised and, as a consequence, just-in-time delivery has become an important aspect in the European food market.

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Production EU countries are large suppliers of fruit and vegetables, which grow in temperate zones. One part is supplied as fresh products directly to consumers, while the other part is supplied as ingredient to the food processing industry. Italy (orange and apple juice concentrate), Spain (orange juice concentrate) and Germany (apple juice concentrate) are the only countries in the EU that supply considerable amounts of fruit juice concentrate. Italian and Spanish orange juice concentrate is shipped solely to the soft drink industry, as these products are not suitable (different production process) to reconstitute into fruit juice. EU production of frozen vegetables is estimated at 2 million tonnes, of which around one quarter is supplied by Belgium. The only two countries in the EU supplying notable volumes of dried fruit are Greece (currants) and France (prunes). Dried vegetables are mainly produced outside the EU. Poland and Hungary are becoming major suppliers to the EU market; especially for apple juice (Poland and Hungary), frozen sweet corn, frozen fruit and vegetables (Poland). In 2003, Poland was the eight largest supplier and Hungary the fifteenth supplier of selected preserved fruit and vegetables to the EU market. Imports In 2003, 17 million tonnes of selected preserved fruit and vegetables were imported into the EU-25, representing a value of € 13.9 billion of which 25 percent came from developing countries. Germany is the major import market for preserved fruit and vegetables, accounting for 23 percent of total imports by EU member countries (in terms of value) in 2003, followed by France (14%), the United Kingdom (14%) and The Netherlands (11%). The new EU countries imported € 607 million of selected preserved fruit and vegetables during 2003 representing 713 thousand tonnes. 32 percent in value was imported from developing countries and 33 percent in volume. Poland was the largest importer of the new EU countries, in terms of value (31%), followed by Czech Republic (20%) and Hungary (13%). It is important to mention that preserved fruit and vegetables are often imported as a raw material from countries outside the EU, processed and packed in EU countries and reexported to other EU countries. Therefore extreme care should be given in interpretation of the figures used in this survey. Fruit juices and concentrates were the leading imported product category, accounting for 32 percent of imports (in value) by EU-25 member countries. Other important categories were, in descending order, canned vegetables (26%), frozen vegetables (12%) and canned fruit (10%). Less important categories were frozen fruit (8%), dried fruit (6%), dried vegetables (3%) and provisionally preserved fruit & vegetables (2%). Between 2001 and 2003, the values of all imported products increased by 9 percent and the import volume increased by 14 percent. This implies that in most product groups, due to large supplies, import prices were under pressure. The share of developing countries in imports by EU-25 member countries of selected preserved fruit and vegetables amounted to 25 percent in 2003. Leading developing country suppliers are Brazil (fruit juice/concentrate), Turkey (canned vegetables, dried fruit and vegetables), China (frozen vegetables, dried vegetables, canned vegetables, provisionally preserved fruit & vegetables) and Thailand (fruit juice/concentrate and canned fruit).

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Exports In 2003, the EU exported 13 million tonnes of selected preserved fruit and vegetables, representing a value of € 11.9 billion. The leading exported product group were canned vegetables, accounting for 36 percent, of total exports in terms of value in 2003, followed by fruit juice/concentrate (29%), frozen vegetables (14%), canned fruit (9%) and frozen fruit (6%). Intra-EU exports accounted for 80 percent of total exports of selected preserved fruit and vegetables. Leading export destinations were Germany (22% in value), France (14% in value) and the United Kingdom (12% in value). A large part of intra-EU exports consists of re-exports to other EU destinations. Export destinations outside the EU were USA (4% in value), Russia (2% in value) and Switzerland (1% in value). Opportunities for exporters Market opportunities in the EU for developing country exporters lie in the production of tropical and subtropical products (exotics), which are hardly or not at all grown in the EU, and in the production of organically grown products. Moreover, a general trend in the food ingredients sector is that importers and food processors in the EU require increasing documentation in order to guarantee food safety. This means that a product should be accompanied by complete product specifications according to EU and customer requirements, a tracking and tracing administration, instructions on how to store and to process, information on quality assurance (e.g. HACCP) or even ISO certification. An exporter capable of meeting these requirements will have an improved competitive position in the EU market for preserved fruit and vegetables. Another positive argument in the export business is that the raw materials, used by processors and/or exporters of preserved fruit and vegetables, are produced according to the standards on Good Agricultural Practice. For information on current CBI Programmes and training & seminars, and for downloading market information and CBI News Bulletins, please refer to http://www.cbi.nl

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INTRODUCTION This CBI survey consists of two parts: EU Market Information and EU Market Access Requirements (Part A), and Export Marketing Guidelines (Part B). Market Survey Part A EU Market Information and Market Access Requirements EU Market Information (Chapters 1-8)

EU Market Access Requirements (Chapter 9)

Product characteristics Introduction to the EU market Consumption and production Imports and exports Trade structure Prices

- Non-tariff trade barriers: Product legislation Market requirements: Occupational health and safety Environmentally sound production Packaging, marking and labelling - Tariffs and quotas

Part B Export Marketing Guidelines: Analysis and Strategy External Analysis (market audit) (Chapter 10)

Internal Analysis (company audit) (Chapter 11)

Opportunities & Threats

Strengths & Weaknesses Decision Making (Chapter 12)

SWOT and situation analysis: Target markets and segments Positioning and improving competitiveness Suitable trade channels and business partners Critical conditions and success factors (others than those mentioned) Strategic options & objectives Export Marketing (Chapter 13) Matching products and product range Building up a trade relationship Drawing up an offer Handling the contract Sales promotion

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Chapters 1 to 8 of Part A profile the market for selected preserved fruit and vegetables. The emphasis of the survey lies on those products, which are of importance to developing country suppliers. The major national markets within the EU for those products are highlighted. Furthermore, statistical market information on industrial demand, production and trade, and information on trade structure and opportunities for exporters is provided. Chapter 9 subsequently describes the requirements, which have to be fulfilled in order to gain market access for the product sector concerned. It is furthermore of vital importance that exporters comply with the requirements of the EU market in terms of product quality, packaging, labelling and social, health & safety and environmental standards. After having read Part A, it is important for an exporter to analyse target markets, sales channels and potential customers in order to formulate export marketing and product strategies. Part B therefore aims to assist (potential) exporters in developing countries in their export-decision making process. After having assessed the external (Chapter 10) and internal environment (Chapter 11), the (potential) exporter should be able to determine whether there are interesting export markets for his company. In fact, by matching external opportunities and internal capabilities, the exporter should be able to identify suitable target countries, market segments and target product(s) within these countries, as well as possible trade channels to export the selected products (Chapter 12). Chapter 13 subsequently describes marketing tools, which can be of assistance in successfully achieving the identified export objectives. The survey is interesting for both starting exporters as well as exporters already engaged in exporting (to the EU market). Part B is especially interesting for more experienced exporters starting to export to the EU and exporters looking for new EU markets, sales channels or customers. Starting exporters are advised to read this publication together with the CBI’s Export Planner, a guide that shows systematically how to set up export activities and the interactive tool on the CBI website ‘Export marketing plan’.

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PART A EU MARKET INFORMATION AND EU MARKET ACCESS REQUIREMENTS

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1

PRODUCT CHARACTERISTICS

1.1 Product groups This market survey deals with selected preserved fruit and vegetables for both industrial use and for the consumer and food service market. Preserved fruit and vegetables consist of a range of product groups, which can be subdivided in an extensive range of individual products. In this survey, a selection has been made of product groups and individual products that are important for EU markets and that offer opportunities for exporters in developing countries, further to be referred to as ‘selected preserved fruit and vegetables’. The best opportunities for exporters in developing countries lie in supplying preserved fruit and vegetable products in the form of ingredients to the food processing industry in EU countries, or in acting as subcontractors by supplying consumer and food service products, like canned fruit and vegetables, to food processing companies or multiple retail chains under their label. The Eurostat statistics used in this survey do not make a distinction according to application. This means that the figures include preserved fruit and vegetables as ingredients for the food processing industry as well as for consumer and food service packing. The market survey distinguishes the following product groups: Fruit juices and concentrates In the country of origin, water is evaporated from fruit juice, in order to maintain quality, to prolong shelf life, and diminish the transport and storage costs. The residue is fruit juice concentrate. In the country of destination, the juice is restored to its original properties by adding water up to the original juice strength. According to EU Directive 2001/112/EC, fruit juice consists of juice without the addition of water. The fruit juice industry in particular uses (frozen) fruit juice concentrate. The directive also states that fruit nectar consists partly of fruit juice and partly of added water and sugar. The minimum share of fruit juice in the nectar depends on the kind of fruit and varies between 25 percent and 50 percent. The directive has been incorporated in the legislation of all European countries. The best-known and most-consumed fruit juice is orange juice. Apple, pineapple and grapefruit are other fruit species, which form the basis for popular fruit juices. Besides the beverage industry (juices and soft drinks), the dairy industry also accounts for considerable volumes of fruit juices and concentrates. According to European fruit juice legislation, drinks made from fruit juice can be divided into three segments: • Pure juice: 100 percent fruit with the same strength and consistency as fresh squeezed juice and no preservatives added • Nectars: Base of concentrated juice or a pasteurised purée of fruit pulp to with sugar and water are added. Citrus fruit nectars usually have more than 50 percent fruit juice content

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•

Juice drinks: Fruit juice ranging from 6 to approx 50 percent with sugar and water added and often with added flavour and/or artificial sweeteners. Fruit juice drinks with low or no sugar content, sweetened with artificial sweeteners, form a growing sector in this market (lower costs, lower calorie content)

Although the majority of imports by EU member countries consist of fruit juice concentrates, trade figures cannot be split up between fruit juice and fruit juice concentrate. Therefore, in the remaining part of the survey, this product group will be referred to as fruit juice/concentrate. Canned fruit and vegetables To ensure sufficient storage life for fruit and vegetable preserves, micro-organisms (yeast, moulds and bacteria) have to be inactivated. In fruit products, due to their natural acidity, only yeast and moulds will develop. Simple pasteurisation (heating to approx. 90º C) is sufficient for preservation of fruit products. In vegetables, where there is a lack of natural acidity, bacteria (including dangerous pathogenic bacteria) can also develop. To inactivate bacteria, sterilisation (heating to at least 121º C) is required. Please note that in trade statistics for canned vegetables (vegetables preserves sterilised in a closed recipient) vegetables preserved in glass jars are also usually included. Vegetable products can also be preserved as 'pickles', through acidification, creating nonfavourable conditions for the growth of bacteria by means of the addition of vinegar or acetic acid. The most popular pickles are based on gherkins, cocktail onions, carrots, sweet peppers and celery. Canned vegetables mainly consist of tomatoes and of different kinds of beans, peas, carrots, etc. The main canned fruit varieties are pineapples, peaches, apricots and fruit mixes. Other interesting canned fruit species are lychees, mandarins and other citrus fruits Dried fruit and vegetables Fruit and vegetables, consisting of more than 80 percent of water, are dried in order to stop the multiplication of micro-organisms. These organisms obtain the water and nutrients they need for growth from the fruit or vegetable in which they grow. By drying or dehydrating fruit or vegetables, the water is removed from the food and from the bacterial cell, thus ending the multiplication. The dried fruit and vegetables described in this survey are whole, cut, sliced, broken or powdered, but not further prepared. Dried fruit can be divided into vine fruit and tree fruit. The best-known vine fruit species are raisins, sultanas and currants, whereas apples, apricots, bananas, dates, figs, papayas, peaches, pears and prunes are the most important tree fruits. Dried fruit is mainly used as a snack or a constituent for breakfast cereals, muesli, bakery products, dairy products and desserts. Although some vegetables are sun-dried or field-dried, most vegetables are dehydrated industrially. The main dehydrated vegetables are onions, tomatoes, garlic, carrots and olives. The Netherlands Horticulture Commodity Board’s definition of dried vegetables is used in this survey, resulting in the exclusion of dried leguminous vegetables (for example, dried peas and beans). The sauce, soup and ready meal industries are the main users of dried vegetables.

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Frozen fruit and vegetables Freezing and deep-freezing is based on the same idea: turning water into ice so that bacteria cannot live and reproduce on the raw food product. The two processes are different. Freezing achieves low temperatures slowly, resulting in relatively large ice crystals, which damage the food cells. When defrosted, a part of the proteins, sugars and vitamins is removed by leaching. In the case of deep-freezing, low temperatures are quickly achieved, resulting in smaller ice crystals and consequently causing less damage to the food cells. Fruit and vegetables can be blanched before freezing (to inactivate enzymes that might remain active even at very low temperatures, and affect the structure and colour of the product). The freezing of fruit and vegetables is increasing in popularity. Generally, the quality of the frozen product is nearly the same as the original fruit. Of course higher transport and storage costs have to be taken into account. Frozen vegetables are mainly processed for ready meals, vegetable preserves and salads. Frozen fruit is processed into jam, bakery products and dairy products. Provisionally preserved fruit and vegetables In the case of fruit, this method of preservation (packing in wooden casks or plastic drums, in a sulphite solution as a preserving agent) is outdated and has for a large part been replaced by freezing. Fruit preserved in this manner generally contains substantial amounts of sulphite. As EU regulations are strict with respect to sulphite content, imports by EU member countries of provisionally preserved fruit are small. Provisional preservation of fruit still takes place in some East European countries (mainly Bulgaria). The quality of this type of fruit is low, but so is the price. Provisionally preserved fruit is mainly used as an ingredient in the jam industry. Vegetables such as gherkins and mushrooms can be temporarily preserved in the country of origin, but in this state they are unsuitable for immediate consumption. Temporarily preserved vegetables are packed in drums (200 litres). The products are then washed, cleaned and repacked in smaller volumes in the country of destination. 1.2 Customs/statistical product specification On January 1, 1988 a unified coding system was introduced to harmonise the trading classification systems used worldwide and to allow for improved international comparability of foreign trade statistics. This system, the Harmonised System (HS), is based on a ten-digit product classification. The World Customs Organisation (WCO) is introducing alterations to the HS and these were included in the combined nomenclature (CN) as of January 1, 2002. Section II, Chapters 7 and 8 and Section IV, Chapter 20 of the Harmonised System, cover preserved fruit and vegetables products discussed in this survey. Not all product groups covered by these chapters deal with preserved fruit and vegetables. Product groups covering fresh fruit and vegetables are not included in this survey. Appendix 1 provides a detailed list of HS codes (and corresponding product names) of the product groups covered by this survey. HS codes/product groups printed in bold are specifically discussed in this survey.

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2

INTRODUCTION TO THE EU MARKET

The European Union (EU) is the current name for the former European Community. Since 1 January 1995, the EU has consisted of 15 member states. Ten new countries joined the European Union in May 2004. They are Poland, Hungary, Czech Republic, Slovakia, Lithuania, Latvia, Estonia, Slovenia, Malta and Cyprus. Negotiations are in progress with a number of other candidate member states. In this survey, the EU will be referred to as the EU-25, unless otherwise stated. Table 2.1: Population and GDP of selected and new EU countries, 2003

Countries

Population million

Age 15 – 64 %

GDP (€) estimation 2003

Selected EU Countries Germany France UK Belgium The Netherlands Italy Spain

82.4 60.4 60.3 12.0 16.3 58.1 40.3

67.0 65.1 66.3 66.0 67.8 66.9 68.0

24,407 24,318 24,495 25,000 25,291 23,699 19,455

New EU countries Poland Estonia Czech Republic Hungary Slovakia Lithuania Latvia Slovenia Cyprus Malta

38.6 1.3 10.2 10.0 5.4 3.6 2.3 2.0 0.8 0.4

70.0 67.5 70.9 69.0 70.8 68.4 69.2 70.6 67.4 68.5

9,727 10,877 13,884 12,292 11,761 9,904 8,931 16,183 14,149 6,263

Currencies Exchange (2003) Source: The World Factbook 2003

€, UK ₤, DKr, SKr € 1 = US$ 1.13

Within Western Europe – covering 15 EU member countries, Iceland, Liechtenstein, Norway and Switzerland – more than 20 million enterprises are active. Small and medium-sized enterprises (SMEs) accounted for the lion’s share. In 2000, the average turnover per enterprise of SMEs and large enterprises amounted to € 600,000 and € 255 million respectively.

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EU Harmonisation The most important aspect of the process of unification (of former EC countries), which affects trade, is the harmonisation of rules in the EU countries. As the unification allows free movement of capital, goods, services and people, the internal borders have been removed. Goods produced or imported into one member state can generally be moved around between the other member states without restrictions. A precondition for this free movement is uniformity in the rules and regulations concerning locally produced or imported products. Although the European Union is already a fact, not all the regulations have yet been harmonised. Work is in process in the fields of environmental pollution, health, safety, quality and education. For more information about harmonisation of the regulations visit AccessGuide, CBI’s database on European non-tariff trade barriers at http://www.cbi.nl/accessguide Monetary unit: Euro On 1 January 1999, the euro (€) became the legal currency within twelve EU member states: Austria, Belgium, Finland, France, Germany, Greece, Italy, Ireland, Luxembourg, The Netherlands, Spain and Portugal. In 2002 circulation of euro coins and banknotes replaced national currency in these countries. Denmark, United Kingdom and Sweden have decided not to participate in the Euro. The most recent Eurostat trade statistics quoted in this survey are from the year 2003. In this market survey, the € is the basic currency unit used to indicate value. Trade figures quoted in this survey must be interpreted and used with extreme caution. The collection of data regarding trade flows has become more difficult since the establishment of the single market on 1 January 1993. Until that date, trade was registered by means of compulsory customs procedures at border crossings, but since the removal of the intra-EU borders, this is no longer the case. Statistical bodies like Eurostat cannot depend on the automatic generation of trade figures. In the case of intra-EU trade, statistical reporting is only compulsory for exporting and importing firms whose trade exceeds a certain annual value. The threshold varies considerably from country to country, but it is typically about € 100,000. As a consequence, although figures for trade between the EU and the rest of the world are accurately represented, trade within the EU is generally underestimated. Furthermore, the information used in this market survey is obtained from a variety of different sources. Therefore, extreme care must be taken in the qualitative use and interpretation of quantitative data, both in the summary and throughout the text, as also in comparison between different EU countries with regard to market approach, distribution structure, etc. For more information on the EU market, please refer to the CBI’s manual ‘Exporting to the European Union’.

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Table 2.2 Exchange rates of EU currencies in US$, 2002-2005 Country EU Denmark Sweden UK Poland Estonia Czech Republic Hungary Slovakia Lithuania Latvia Slovenia Cyprus Malta

Currency

2002

2003

2004

April 2005

€ Dkr Skr GB₤ PLN EEK CZK HUF SKK LTL LVL SIT CYP MTL

0.946 0.13 0.10 1.50 0.245 0.06 0.031 0.004 0.022 0.732 1.639 0.004 1.639 2.326

1.125 0.15 0.12 1.63 0.257 0.072 0.036 0.004 0.027 0.328 1.754 0.005 1.923 2.632

1.24 0.167 0.136 1.833 0.275 0.079 0.039 0.005 0.031 0.360 1.887 0.005 2.128 2.941

1.32 0.178 0.145 1.907 0.329 0.084 0.044 0.005 0.035 0.382 1.896 0.006 2.263 3.058

Source: OECD Selected Countries This survey covers Germany, France, the United Kingdom, Italy, Belgium, Spain and The Netherlands. These countries are the largest importers of selected preserved fruit and vegetables. The first four countries are also the largest consumer markets in the EU, while Belgium and The Netherlands are important processing and transit trade countries for preserved fruit and vegetables. Besides the seven selected countries, attention is paid to the new EU countries Poland, Czech Republic and Hungary. These countries have a sizeable food processing industry and are thus important for exporters in developing countries.

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3

INDUSTRIAL DEMAND

Most of the product groups mentioned in this survey are used as ingredients for food processing. This segment is the most important for exporters in developing countries, as preserved fruit and vegetables for the consumer market require extensive investments in marketing and distribution. Data on industrial demand for preserved fruit and vegetables, however, are rather scarce. As information on consumer products is more readily available, it is the information given in this chapter. Trends in consumer products influence demand in the ingredients sector. 3.1 Overview of the EU food market Canned fruit and vegetables, fruit juice and frozen vegetables in consumer packing are sold as branded products. Next to producers’ brands like Del Monte and Dole (canned fruit), Bonduelle (canned vegetables), Tropicana and Minute Maid (juices), Iglo and Birds Eye Wall’s (frozen vegetables), multiple retail chains like Carrefour, Ahold, Tesco, Sainsbury and Rewe sell these products under their own (private) label. Private label products are usually less expensive than producer’s brands and have established strong market positions, especially in the United Kingdom and France. Dried and frozen fruit, dried vegetables, fruit juice concentrates and provisionally preserved fruit and vegetables are mainly used as ingredients for the food processing industry. The total EU food and drink market is estimated at € 666 billion in 2003, forecast to grow to € 690 billion in 2006. The growth in value is estimated to be only 4 percent, indicating that the food market in the EU-15 countries is stabilizing. There are, however, differences because the food market in Germany is estimated to decline by 4% during this period, while the food markets in France and Italy are estimated to grow by 3% and 7% respectively. The remaining markets show a stabilizing trend. It is further estimated that the food markets in the ten new EU countries will grow, due to increasing spending power. For example, markets like Czech Republic and Slovakia are estimated to grow by 20% and 10% respectively per annum. Table 3.1

Consumer expenditure on food and non-alcoholic beverages in the EU, € million, 2003 and estimated % change 2003/2006

Country Germany France Italy United Kingdom Spain The Netherlands Greece Belgium Austria Sweden Portugal Denmark Finland Ireland

Value 139,550 124,760 110,300 96,920 64,840 24,270 17,950 17,420 15,940 14,640 14,470 10,800 8,460 5,600

% change - 4.0 3.1 7.4 2.7 6.3 0.2 11.5 12.2 6.4 7.2 - 2.9 11.0 8.4 11.7

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Poland Hungary Czech Republic

26,100 12,280 7,330

2.3 4.3 20.2

Source: Euromonitor, 2003 In the following table, the main food sectors relevant to preserved fruit and vegetables are outlined as follows: Table 3.2 Food sector

Food sectors relevant to preserved fruit & vegetables in the EU-15 countries, € billion, thousand tonnes, 2003 and estimate 2006 Value in 2003

Volume in 2003

Estimated value in 2006

% change

Estimated volume in 2006

% change

Frozen food - frozen vegetables

20.0 2.0

4,571 566

21.1 2.1

+ 5.5 + 5.0

4,864 597

+ 6.4 + 5.5

Canned food - canned vegetables - canned fruit

14.8 3.0

6,002 1,770

15.3 3.1

+ 3.4 + 3.3

6,149 1,821

+ 2.4 + 2.9

1.2

534

1.2

0

530

- 0.1

3,839

8.2

+ 3.8

3,954

+ 3.0

Dried food 7.9 Source: Euromonitor 2003

Fruit juice/concentrate After a strong growth during the last decade, overall consumption in the EU-15 tends to stabilize as the following table shows: Table 3.3

Per capita consumption of fruit juices and fruit nectars in the EU-15, 2001-2003, litres

Country Germany Austria Finland Denmark The Netherlands Sweden Spain France United Kingdom Belgium/Luxembourg Ireland Greece Italy Portugal Source: AIJN

2001 40.5 35.6 35.0 22.7 25.5 23.0 21.0 21.8 20.5 19.9 15.6 16.3 11.7 10.8

2002 40.2 32.0 32.0 25.3 24.4 23.7 22.0 21.7 21.0 19.7 17.1 16.1 11.9 11.1

2003 42.0 31.0 31.7 25.1 24.8 23.8 24.4 22.5 22.8 20.2 16.5 15.0 12.9 11.1

Price fluctuations, competition from other non-alcoholic drinks and warm/cold weather affect the juice and nectar consumption. Nevertheless, the fruit juice and nectar consumption is characterised by a high per capita consumption in northern European

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countries (in particular Germany) and a low, but rising, consumption growth in southern European countries. The production of fruit juices is concentrated mainly in Germany, which is not surprising since Germany has the highest per capita consumption of fruit juice and nectar in Europe, accounting for 37 percent of the overall volume. France and the United Kingdom are the only other two countries where fruit juices have a share of over 10 percent of total EU fruit juice sales, followed by Spain in fourth place. Several fruit juice producers are also located in the United Kingdom and these supply substantial amounts of fruit juices. Canned fruit and vegetables The total canned food market in the EU-15 countries was estimated at € 14,8 billion and 6 million tonnes in 2003. The canned vegetable market was estimated at € 2,9 billion and the canned fruit market was € 1,1 billion, accounting for 20 percent and 7 percent respectively of the total canned food market in value in 2003. Canned vegetables There are large differences in consumption and market prospects between the EU countries as the following table shows: Table 3.4

Descending size of per capita consumption of canned vegetables in major EU countries , kilograms, 2002 and estimated consumption 2007

Country France Belgium Germany Sweden The Netherlands Spain United Kingdom Czech Republic Hungary Poland Source: Euromonitor, 2003

2002 10.9 6.0 5.8 5.5 5.4 3.3 3.2 6.1 4.9 1.2

2007 11.4 6.5 5.9 5.8 5.5 4.2 2.8 7.4 5.8 1.4

Per capita consumption is the lowest in Ireland with only 0.6 kilograms. The remaining countries have per capita consumptions ranging between 0.7 – 2.2 kilograms. Although the image of canned food is sometimes considered old-fashioned, canned vegetables are more popular among younger consumers. Nevertheless, the packaging in glass jars instead of metal cans is still gaining popularity in the EU, partly because fruit and vegetables in glass are totally visible and stand for a quality product. The canned vegetable sector is very fragmented. Nevertheless, canned green beans, peas with carrots and peas are very popular in almost every single EU member country. HAK and Bonduelle are the leading A brands in The Netherlands, Belgium and in Germany. Bonduelle is a French brand, and is, as such, mainly imported from France. Canned fruit As is the case with canned vegetables, consumption and market prospects for canned fruit show large differences between the EU countries

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Table 3.5

Descending size of per capita consumption of canned fruit in major EU countries, kilograms, 2002 and estimated consumption 2007

Country Denmark Sweden Belgium The Netherlands Germany United Kingdom Finland Slovakia Czech Republic Poland Source: Euromonitor, 2003

2002 4.3 3.3 2.9 2.4 2.0 1.9 1.5

2007 4.2 3.1 3.0 2.5 1.9 1.9 1.7

0.7 0.5 0.4

0.8 0.6 0.4

The EU market for canned fruit is largely dominated by private label brands, followed by producers’ brands, which are led by Del Monte and Dole. Considering the imports of canned fruit, canned pineapples, peaches and mixtures are popular varieties of canned fruit in the EU. The volume in the EU-15 is estimated at 530,000 tonnes. The canned fruit market in the EU-15 is stable to declining, both in value and volume. Table 3.6 Country

Market developments canned fruit in major EU markets, 2004 Market value in € million 707 317

Germany United Kingdom France 233 Italy 113 Spain 90 Source: Leatherhead

Private label share

Developments

50% 70%

Consumption under pressure Declining market

60% 50% 20%

Mature market Mature market Stabilizing market

Dried fruit and vegetables The dried food consumer market in the EU-15 countries has a value of € 7.9 billion and a volume of 3.8 million tonnes in 2003. Unfortunately, there are no data about the consumer markets for dried fruit and vegetables as these products are mainly used as ingredients for food processing. Dried fruit Dried fruit is used in consumer or food service packing, mainly consumed as a snack and as an ingredient for breakfast cereals, healthy ready-to-eat snacks and desserts. Bakeries and breakfast cereal mixes are one of the largest end users of dried fruit. The market for bakery products in the EU-15 had a value of € 70.3 billion and a volume of 26.8 million tonnes in 2003. Considering the imports of dried fruit, sultanas are the most popular (mainly for industrial use) dried fruit in the EU, accounting for more than a quarter of the total imports by EU member countries of dried fruit. Sultanas, other raisins, dates, prunes, apricots and figs are the major imported dried fruit species.

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Table 3.7

Descending size of per capita consumption of dried food in major EU countries, kilograms, 2002 and estimated consumption 2007

Country Italy Portugal Hungary Czech Republic Sweden Slovakia Denmark Source: Euromonitor, 2003

2002 24.7 14.6 13.6 13.6 11.4 11.1 10.8

2007 24.8 15.3 14.4 16.3 12.6 11.7 11.7

The lowest consumption is measured in United Kingdom with 4.5 kilograms per capita. Dried vegetables Dried vegetables are mainly used as ingredients by the dried soup industry. It uses most types of dried vegetables, especially potatoes, onions, tomatoes, leek, carrots and peas. A few large multinational companies dominate the soup industry in the EU. These are Unilever (Knorr, Unox), and Nestlé (Maggi). In most markets, the ratio is moving towards higher relative usage by the industrial sector, reflecting the growing popularity of ready-to-eat healthy snacks, muesli, and processed foods using more healthy ingredients like dried fruit. Frozen fruit and vegetables The consumer market for frozen food in the EU-15 countries had a value of € 20 billion and a volume of 4.6 million tons in 2003. Frozen vegetables The consumer market for frozen processed vegetables had a value of € 1.9 billion and a volume of 566 thousand tonnes in 2003, accounting for 9.5 percent and 12 percent respectively of the total consumer market for frozen food. Table 3.8

Descending size of per capita consumption of frozen processed vegetables in major EU countries, kilograms, 2002 and estimated consumption 2007

Country Denmark Austria Finland United Kingdom Sweden Germany Belgium Source: Euromonitor, 2003

2002 15.2 3.6 3.0 2.9 2.6 1.5 1.5

2007 15.5 3.7 3.4 2.7 2.9 1.9 1.7

However, since the main buyer of frozen vegetables is the industry for ready meals and the overall consumption of ready meals has increased, the market for frozen vegetables is expected to grow. Frozen vegetables in consumer packing also grew at the expense of vegetables in canned and glass packing. Market leaders in ready meals in the EU are Nestlé and Unilever. Private labels take an important share of the market for frozen food. The market for frozen ready meals is boosted largely through the increasing sales of ethnic ready meals and through a strong growth in frozen pizzas.

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However, frozen vegetables are the most frequently used type of frozen product. The market is stable in the leading countries (the United Kingdom and Germany), but in Spain, the frozen food market is among the more dynamic sectors. Frozen fruit Frozen fruit is mainly used by the jam industry for further processing into jam. In 2003, the consumption of jam and preserves in the EU amounted to 505 thousand tonnes, which represented an average per capita consumption of 1.3 kg per year (Euromonitor, 2003). 3.2 Market segmentation The market for preserved fruit and vegetables can be divided into three segments 3.2.1 Ingredients segment The food processing industry is the largest segment for preserved fruit and vegetables. As the trade in these products takes place on a business-to-business basis, there is very little information available on market sizes and trends. In this sector, preserved fruit and vegetables (primarily frozen and dried fruits and vegetables and concentrated juice) are used as ingredients in a wide range of food products. Food processors use these ingredients to produce end products in consumer packing for the retail sector and in catering packing for the food service sector. The major food processors, using preserved fruit and vegetables, operate in the following sectors: • beverage industry. The beverage industry is the largest end-user of fruit juice concentrate. Fruit juice concentrate is reprocessed, by blenders and mixers, into fruit juice or nectar. The most important fruit juices in the EU are orange juice and apple juice, followed by pineapple juice and grapefruit juice. • ready-meals industry. The ready-meals industry is a significant end-user of frozen vegetables, preserved mushrooms and dried vegetables (mainly for pizzas and pasta dishes). • soup industry. The soup industry is the largest end-user of dried vegetables. Preserved mushrooms are also used by this industry. The main products are packet soups (dried) including soup bases, instant soups (dried), canned soups and, to some extent, frozen soups. • breakfast cereal industry. The breakfast cereal industry uses substantial amounts of dried fruit in its production of cereals, muesli and cereals bars. • jam industry. The jam industry uses considerable amounts of frozen fruit to produce jam products and marmalade. This industry hardly uses fresh fruit anymore. • other food sectors, like pet food (dried vegetables), confectionery, baby and infant food. 3.2.2 Consumer segment Preserved fruit and vegetables like canned fruit and vegetables, frozen vegetables, fruit juice and jam are processed and packed in consumer units and sold through retail outlets to consumers. The consumer sector of preserved fruit and vegetables consists mainly of branded products and private labels. Supermarkets in the EU dominate retail sales at the expense of specialised shops, such as greengrocers, bakeries, butcheries and deli shops. The share of private label is increasing, mainly at the expense of B and C brands. 3.2.3 Food service sector The food service sector has been growing during recent years. Out-of-home consumption increased as consumers saw their incomes rising, especially two-person households where both partners are working. Fast food outlets showed an increasing expansion in most EU countries. The food service sector also includes company canteens and institutional outlets like hospitals, prisons, convalescent homes, schools and universities. Meals-on-wheels is a growing segment in food service, catering for an increasing greying population in EU–15 countries.

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The market for preserved fruit and vegetables for industrial use can also be segmented according to whether the products are grown by organic farming or by conventional farming. This is particularly important since the demand for organic food is growing in several EU member countries and can offer interesting market opportunities for developing countries’ exporters. Organic products still account for a small share of the total food consumption in most of the EU markets, although the differences are quite large. In Denmark and Austria, organic products account for about 10 percent of the total food market, while in countries like Spain and France the share is between 0.5 and 1 percent. Although growth of organic foods reached double digit figures in 2000 and 2001, since 2002 the markets have tended to grow much more slowly (3-4 percent). In some sectors like organic coffee, there is an oversupply, causing prices to drop. Because of its nature, organic production is highly suitable for small and medium-sized farmers working in areas, which may not be suitable for large-scale food production. Dried fruits like apricots, bananas and pineapple are important organic products within the segment preserved fruit and vegetables for industrial use. For more information on organic products, please check CBI’s Market Survey ‘Organic Food Products’. 3.3 Patterns and trends in consumer demand The population in the EU is still growing and will continue to grow until about 20 years from now. It is estimated that, thereafter, the EU will start to show a declining population size. However, already now the composition of the population is changing. It shows a rapidly growing number of elderly people combined with a decreasing number of young people. We also see a family ‘dilution’; family households are getting smaller because people are having fewer children. Moreover, the number of single households in Western Europe is substantial and still increasing, making these people a highly significant consumer group for food suppliers. Prosperity in the EU has increased over recent years, and eating behaviour is related to income and life style. Despite this increase in prosperity, the food market in the EU is highly competitive, since consumers are not going to eat more, but will only, at the very most, switch to other products. The main trends for packaged food in the seven identified countries are the following: 3.3.1 Germany One of the key trends in Germany is towards ready, easy to prepare meals. As the demography of Germany changes increasingly towards single households, the market for single-portion products is increasing. Snacks are a growing segment in Germany, as consumers use this increasingly as a replacement for breakfast and lunch. Due to the recession in Germany and low consumer confidence, discounter retailers are growing to the detriment of more traditional and expensive outlets. 3.3.2 France The French packaged food market grew by only 2% in 2004, mainly due to disappointing results of bakery products and confectionery. Dried ready meals are also expected to decline, being challenged by the success of other types of ready meal. Due to changing eating habits, the French increasingly prefer a cereals breakfast rather than a continental type breakfast. This leads towards an increase in sales for breakfast cereals and sweet biscuits. Concerns about health, in particular obesity, increase the popularity of healthy products like reduced fat products, probiotic yoghurts and alternatives for sugar.

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3.3.3 United Kingdom Convenience appears to be at the forefront of everybody’s mind, as the United Kingdom continues to go down the road of the 24-hours society. Consumers have less time to spend in the kitchen. Sales of convenience foods, especially chilled ready meals and prepared salads, have continued to grow. Pressure of time has also impacted on snack and confectionery sales, which have continued to grow. Public health has become a major issue, especially obesity. Low calorie products boomed in the wake of a predominant diet culture. 3.3.4 Spain Snack bars, meal replacement products, chilled processed food, ready meals and confectionery saw strong growth in 2004. However, overall growth in packaged food was held back by poorer performances by bakery products and baby food. Awareness of obesity leads to a growth for low calorie and fat-free products. As in many EU countries, the reduction of spare time leads to changing shopping habits. Most shopping is now done at weekends. It is expected that less developed sectors, like snack bars and ready meals, will be the most dynamic product groups for the coming years. 3.3.5 Italy Although convenience is becoming more important to Italian consumers, due to lack of time or energy to dedicate to food preparation, ready meals are still perceived as a makeshift solution. An exception to this, however, is chilled ready meals. This product group is seen as being more authentic than frozen or dried products. Another key factor in the increase in sales of these products is a growing demand for fresh preservative-free products. Sales of frozen pizza are expected to continue to fall, due to the doubts about the quality of the products available. The Italian packaged food market is extremely fragmented. Private label products were the best performers in 2003. 3.3.6 The Netherlands The packaged food market registered a growth of 4 percent during 2004. Consumers became more price sensitive, looking for cheaper distribution channels. The trends and developments that impacted demand for packaged food during this period were: - increased price-consciousness - shift towards out-of-home channels with adopted packaging formats - search for variation - development of well-being concepts in most sectors. The Dutch packaged food market is expected to continue registering healthy growth. The number of products and varieties will continue to grow, focussed on values looked for by consumers such as quality, health and taste variation. Sectors such as frozen foods and ready meals are expected to show the highest growth. 3.3.7 Belgium Belgian consumers traded up to products with more added value during the period under review. This lead to impressive growth in value terms of chilled processed food. Within the famous success triangle of health benefits, taste and convenience, the firstmentioned is emerging as the most influential. Nonetheless, the ongoing success of pizzas and ready meals reflects the continuing importance of convenience and taste. Belgian consumers appreciate frozen food, in line with their increasingly hectic lifestyles. Private labels continue to gain ground over mid-priced brands and even some prestigious A brands.

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Recent research into consumer behaviour shows that today’s consumer has the following preferences concerning food and nutrition: Safe food Food products should be safe and eating them should not result in any danger or risk to health. A CIAA European Food Safety Survey conducted in 2002 showed that consumers find food safety the 4th largest health concern. For example, producers are encouraged to adopt an approved HACCP (Hazard Analysis and Critical Control Points) system, to show their commitment to the quality and safety requirements of the EU food industry. Please also refer to Chapter 9 of this survey for more information on HACCP. Health food Health food refers to food products, which are low in fat and have limited sugar and salt content; this includes functional foods, which have specific health promoting properties and food products with added vitamins and minerals or bacteria, which support the intestinal function. Organic food Since European consumers have recently experienced several food scares, many people are concerned about the safety of food and the effects of intensive farming on the countryside as well as on the environment in general. These factors, combined with the increasing awareness of the importance of diet and nutrition, have intensified interest in organic foods, which are grown according to principles laid down in Regulation (EC) 2092/91, in short: without artificial fertilizers and pesticide. For more information on organic food, please refer to the separate CBI EU Market Survey “Organic Food Products.” Fruit and vegetables There is a growing interest in the consumption of fruit and vegetables in the EU food market. This is caused by the fact that fruit and vegetables contain vitamins and natural antioxidants, which are supposed to have properties, which help to prevent heart diseases and cancer. According to health authorities and scientists the consumption of fruit and vegetables is still too low in most EU countries. Environment-consciousness Food production, especially primary growing, should be environment-friendly (organic, see above). Waste, including packaging waste, should be avoided or at least reduced. In the scope of the increasing environment-consciousness in the EU, a group of leading European food retailers launched the EurepGap Protocol in 1999. The objective of EurepGap (EuroRetailer Produce Working Group for Good Agricultural Practice) is to raise standards for the production of fresh fruit and vegetables by promoting food safety, sustainable use of natural resources and more environment-friendly production. For more information on the Eurep Group and EurepGap Protocol, please refer to http://www.eurep.org Convenience European people (including women) are working more and more in jobs outside their home and have busy social lives. Moreover, the number of single households increases. As a result, less time is left for the preparation of a full meal. Therefore, West European consumers have a growing need for convenience meals, spurring the demand for peeled potatoes, canned soup, preserved vegetables, prefried fries, fish sticks, pizza, frozen pastry, ready meals (frozen, chilled or shelf-stable). The catering sector now also uses semi-processed fruit and vegetables.

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Market developments are closely linked to innovation and many new products have entered the market in recent years. Sales of meals packed in bags, the contents of which can be split up into individual portions, have increased considerably as a result of Individually Quick Frozen technology (IQF). This technology prevents the product from freezing into one large block, so it is easier to separate. Advertising for frozen food is increasing in most of the selected European markets. 'Grazing' The modern consumer does not confine himself to the traditional three meals a day (breakfast, lunch and dinner), but is eating smaller bites at more frequent intervals: readyto-eat products or products requiring very little ultimate preparation: take-out foods, hamburgers, mini-pizzas, instant soups, filled croissants, candy bars, muesli bars, cheese sticks and fruit yoghurts. Tracking and tracing As a result of several food scares (BSE, dioxine) consumers increasingly pose questions on the production process and demand open, honest, and informative labelling. This has resulted in a discussion in the fruit and vegetable processing industry about “tracking and tracing”, which is now required by the EU General Food Law (Directive (EC) 178/2002). For more information on this Directive, please see chapter 9.1 of this survey. With the help of good chain management and control within the chain, end-product processors are able to supervise all kinds of aspects of fresh fruit and vegetables and products derived from them, such as plant material, growth, harvest, storage, distribution and processing. The fruit and vegetable processing industry is increasingly paying attention to chain management and labelling systems, through which products can be traced back to the producer. Tracking and tracing is becoming even more important in production (i.e. growing and processing) of organic products, where fully documented tractability is required from the raw material to the final product, to ensure the organic character of the product. Internationalisation As the world is increasingly turning into a global village, culinary traditions from other continents tend to be more widely accepted by European consumers, increasing the demand for ethnic and exotic ingredients. This development is also stimulated by the steady population growth of ethnic minority groups, which have significantly increased their purchasing power over recent years. Many products containing exotic fruits (like fruit juice drinks, jams, ice cream) are manufactured by European food industries from ingredients that are imported as semi-manufactured products (fruit juice concentrate). The food processing industry responds to the demands of consumers for safe, healthy and tasteful food by tightening their requirements and by placing increasing responsibility for the quality of the food in the hands of their suppliers (importers/exporters). Unilever announced recently that it is going to require that suppliers of agricultural raw materials grow their products according to the principles of sustainable agriculture. Moreover, for exporters of preserved fruit and vegetables, one trend in the food industry is very important. Over the years, the relationship between the ingredients supplier and the food manufacturer has been changing. In the past, the food manufacturer simply ordered ingredients and additives from his suppliers, carrying out his own programmes of evaluation and formulation to manufacture his end products. This scene has changed in so far that the

25

food manufacturer is increasingly calling on and depending on the ingredients suppliers to carry out this development on his behalf. The food manufacturer not only buys additives and ingredients, but also expertise and experience. The influence of those ingredients suppliers who can offer experience will increase. For starting exporters, it is recommendable to contact traders and the food ingredients industry in Europe (already maintaining their relation to the food industry) rather than going directly to the food manufacturers. A further change has been the minimisation of ingredient stocks held by manufacturers, thus requiring short-term call-off from their suppliers. Just-in-time delivery is becoming increasingly important in the European food market. Opportunities for exporters from developing countries Due to the characteristics of the preserved fruit and vegetable sector, the opportunities for exporters in developing countries lie in the following positions in the supply chain: • • •

Suppliers of preserved fruit and vegetables ingredients to the food processing industry in the EU countries Suppliers of preserved fruit and vegetables in bulk to packers in the EU, who pack in consumer and food service units Subcontractors for the food processing industry and retail organisations. These subcontractors process fruit and vegetables and pack them in consumer and food service units according to strict specifications and under their customers’ labels in the EU. For example, beans and peas are harvested in African countries, sorted and washed immediately after harvest, processed and packed in consumer packing under the label of a UK retailer, then shipped to the distribution centre of the retailer in the United Kingdom and from there directly to the retail outlets.

Based on the trends as mentioned under 3.3, increasing demand for convenience products spurs demand for ingredients used in ready-to-eat meals. Internationalisation of taste increases demand for exotic ingredients. Coupled to the need for safe and traceable food ingredients, this provides exporters in developing countries with opportunities to catch on to these trends.

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4

PRODUCTION

Preserved fruit and vegetables are part of the EU food and drink industry. In 2003 the total production value of the food and drink industry was over € 600 billion. 26,000 companies are active in this sector employing 2.6 million employees. The top EU food processors, ranked on turnover in 2003 and relevant to the preserved fruit and vegetable sector, were: Company

Country

Turnover in € billion 87.9 CHF

Nestlé

Switzerland (no EU)

Unilever

The Netherlands/ UK

42.7

Danone

France

13.5

Cadbury Schweppes Ferrero

United Kingdom Italy

Barilla

Italy

Numico

The Netherlands

9.1 4.1 Unknown

1.6

Product groups

Websites

Cereals, dairy, beverages, confectionery Dairy, beverages, dressings, frozen food, cooking products Dairy, beverages, biscuits, cereals Beverages, confectionery Confectionery, spreads Fruit and vegetables, Italian products Dietetic food, baby and infant food

http://www.nestle.com

http://www.unilever.com

http://www.danonegroup.com

http://www.cadburyschweppes.com http://www.ferrero.com http://www.barilla.com

http://www.numico.com

France, Germany and the United Kingdom were the largest food processors in the EU, accounting for 60 percent of total food and drinks production. Apart from the above-mentioned multinational companies with strong pan-European brands, most of the foods processing companies in the EU are small to medium sized (SMEs). The processed fruit and vegetable sector in the EU had a production turnover of € 36.8 billion in 2003. This was an increase of 1.2 percent compared to 2002 and accounted for 5.8 percent of total production value of the food and drinks industry. This share is relatively low, because of the fact that the preserved fruit and vegetable sector is a mature industry with a low added value. The sector employs 168,000 people, representing 6 percent of total employees in the food and drinks industry (Source: CIAA).

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Due to the high wage levels in the EU, coupled to a high degree of concentration in the retail sector and fierce competition, processing facilities are highly automated and efficient. Economies-of-scale, resulting in lower production costs and an efficient logistical system are necessary to be able to operate profitably. The major developments in the processed fruit and vegetable industry in the EU can be described as follows: - a maturing industry - private label is still gaining momentum - consolidation at the processing side - specialisation: concentration on limited set of activities and outsourcing - alliances: partnerships in the value chain and co-packing for private label suppliers Fruit juice/concentrate In the EU, only Spain and Italy produce notable amounts of orange juice concentrate. Compared to Brazil and the USA, which together account for 90 percent of global production, the production in Europe is small. Moreover, the fruit juice concentrate from Spain and Italy has a different kind of quality, which makes it more suitable for the soft beverages industry and less for the processing of fruit juice and nectar. Germany and Italy are the major EU producers of apple juice concentrate, producing some 70 thousand and 50 thousand tonnes respectively. The production of apple juice concentrate depends to a large extent on the apple harvest, which fluctuates considerably. Table 4.1

Production of unconcentrated orange juice (excl.frozen) in selected EU countries, 2002 – 2003, 1000 tonnes

Country Germany United Kingdom France Spain Poland Belgium Source: Eurostat 2003

2002 962,212 563,050 418,321 302,922 153,442 79,609

2003 Not available 554,210 396,466 371,273 Not available 96,043

Canned vegetables France is by far the largest producer of canned vegetables, accounting for more than 50 percent of total EU production. The Netherlands, Italy and Spain are other important producers of canned vegetables. The French company Bonduelle is a leading EU supplier of canned vegetables and has established a strong branded position on major EU markets. Please note that the figure 4.2 not only refers to canned vegetables, but also to other forms of preservation, like frozen vegetables. Figure 4.1

Production of preserved vegetables (excluding preserved mushrooms and tomatoes) in selected EU countries, 2001-2003, million litres

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1200 2001 1000

2002 2003

800 600 400 200

Ki ng do m

iu m

U ni te d

Be lg

n ai Sp

It al y

nd s et he rla

Th e

N

Fr an ce

0

Source:OEITFL/VIGEF Figure 4.2

Production of canned and bottled vegetables (excluding baked beans) in major EU countries, 2001-2003, million litres

1400 2001

1200

2002

1000

2003

800 600 400 200

G

er m

an y

d Po la n

Ki ng do m

U ni te d

It al y

iu m Be lg

n ai Sp

s nd et he rla

Th e

N

Fr an ce

0

Source:OEITFL/VIGEF Frozen vegetables Frozen vegetables have become a fierce competitor of canned vegetables. Production of finished products in the EU has been growing steadily from 2001 – 2003, but declined in 2003 according to following figures provide by OEITFL: Figure 4.3

Production of frozen vegetables (excluding mixtures and corn) in selected EU countries, 2001-2003, 1000 tonnes

29

900 800

2001

700

2002

600

2003

500 400 300 200 100

nd s

Th e

N

et he rla

an y er m G

It al y

Ki ng do m

n ai Sp

U ni te d

Fr an ce

Be lg

iu m

0

Source:OEITFL/VIGEF Production technology and quality are constantly improving within the frozen food industry. Research by Unilever has shown that nowadays frozen vegetables are qualitatively comparable to fresh vegetables. The improvements and research development and strong marketing efforts contribute to a positive consumer attitude towards frozen food consumption. Canned fruit Southern European countries are the leading producers of canned fruit in the EU. In descending order, Greece, Spain, France and Italy were the leading producers in 2003. Please note figure 4.4 details the production of preserved fruit. Canned fruit is a segment of preserved fruit production. Figure 4.4

Production of preserved fruit in selected EU countries, 2001-2003, million litres

300 2001 250

2002 2003

200 150 100 50

Ki ng do m

iu m

U ni te d

Be lg

s nd

Th e

N

et he rla

an y er m G

It al y

Fr an ce

Sp

ai

n

0

Source: OEITFL/VIGEF

30

Dried fruit There are only a few countries in the EU supplying significant amounts of dried fruit. Greece is a major producer of currants and raisins. France is the second largest producer of dried prunes in the world, after the United States. French prune production is estimated at about 41,000 tonnes. Spain is the only date producing EU member country, with an annual production fluctuating around 7,000 tonnes (FAO 2003). Dried vegetables It is not possible to give an overall view of EU production of dried vegetables, as only a few countries publish production figures on this product group. This is because the quantities are fairly small compared to those of other processed vegetables. However, a large share of dried vegetables originates outside the EU, accounting for about half of the imports by EU member countries (in terms of volume) of dried vegetables in 2003. Production of dried vegetables and mixtures of dried vegetables, other than potatoes, onions and mushrooms, in selected EU countries in 2002, 1000 tonnes: Spain Germany France Hungary

53,781 12,782 9,585 2,818

New EU countries Hungary and Poland are the most important of the new EU countries in the trade of preserved fruit and vegetables. Therefore these countries are highlighted. Hungary The processing industry is a major outlet for fruit and vegetables grown in Hungary. The juice industry produces more than 500 million litres/annum and, with 40 companies, has a relatively high degree of concentration. Domestic raw material, particularly apples, peaches, grapes, apricots and tomatoes, are used to a large extent. The deep-freezing industry exports the majority of the products to EU markets. Total production is about 200,000 tonnes of finished products, including 25 percent sweet corn. The canning industry suffered heavily from the collapse of the Soviet Union; production decreased from 1 million tonnes to 600,000 tonnes. Although the share of Western Europe has increased, exports to the eastern direction are still more important. It should be noted that about two thirds of the companies are in foreign hands, which also means that much investment took place after privatisation and efficiency was improved. Poland Poland is a large producer of apples and soft fruit for processing into preserved fruit. The processing plants are often outdated and there is insufficient cold storage capacity. Moreover, supply is still fragmented and quality is fluctuating. However, it is expected that substantial investments will be made in the processing industry, leading to improved quality and infrastructure. In view of this, the prospects for the fruit processing industry are positive. Opportunities for exporters in developing countries Products which grow in tropical or subtropical countries and cannot be grown in the EU offer good opportunities for exporters in developing countries, e.g. lychees, mangos, mangosteen, pineapples and star fruit. Further, counter seasonal products are of interest to EU trade partners, as year round supply is increasingly demanded, e.g. apples, oranges, pears and melons.

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5

IMPORTS

As was already mentioned in Section 1.2, Chapters 7, 8 and 20 of the Harmonised System, cover preserved fruit and vegetables product groups discussed in this survey. The following HS codes are covered in the Eurostat tables and figures of this chapter and in appendix 2: Product group Fruit juice/concentrate Canned vegetables Canned fruit Frozen vegetables Dried fruit Frozen fruit Dried vegetables Provisionally preserved fruit and vegetables

HS code 2009 2001, 2002 and 2005 2008 0710 0803, 0804, 0806 and 0813 0811 0712 0812 and 0711

The tables and figures give the total value and volume of the product groups as mentioned above. Selected products within the product groups are highlighted in this chapter under 5.2 The seven EU countries dealt with in this chapter and the three new EU countries are leading importing countries for preserved fruit and vegetables. As already mentioned in the summary, the opportunities to export consumer products to the EU are limited for exporters in developing countries, as this requires substantial investments in marketing and distribution and detailed knowledge of EU food legislation (labelling requirements). Preserved fruit and vegetables as ingredients for the processing industry in the EU offer better opportunities for exporters in non-EU countries. Where applicable, Poland, Czech Republic and Hungary, being the new EU countries most important trading partners for preserved fruit and vegetables, will be mentioned separately. 5.1

Total imports of selected preserved fruit and vegetables

In 2003, imports by EU member countries of selected preserved fruit and vegetables amounted to € 14 billion or 17 million tonnes, representing an increase by 2.2 percent in value and 10 percent in volume, compared to the preceding year. Developing countries supplied 25 percent of the total import value in 2003. This was 2 percent less compared to 2002 in value; volume increased by almost 11 percent in 2003 compared to 2002 (see appendix 2). Germany was the leading EU importer, accounting for 23 percent of total imports by EU member countries (in terms of value) in 2003, followed by France (14%) and the United Kingdom (14%) and The Netherlands (11%). Together, these countries imported 62 percent of the total imported value in 2003. The Netherlands was by far the major supplier of preserved fruit and vegetables to the EU, accounting for 12 percent of the total supplied value in 2003, followed by Germany and Belgium (9%) and Italy (8%). Of the total imported value by EU member countries, 37 percent was supplied extra-EU.

32

Figure 5.1

Leading suppliers of selected preserved fruit and vegetables to the EU, 2001-2003, € 1,000

2000 1800

2001

1600

2002

1400

2003

1200 1000 800 600 400 200

Ch in a

Tu rk ey

d Po la n

il Br az

Fr an ce

n ai Sp

It al y

iu m Be lg

an y er m G

Th e

N

et he rla

nd s

0

Source: Eurostat, 2003 It should be noted that above mentioned EU countries partly import preserved fruit and vegetables from outside the EU, process these and supply the end product to other EU countries. Table 5.1 Leading new EU suppliers of selected preserved fruit and vegetables to the EU, 2001-2003, € 1,000 / tonnes 2001 value € volume Poland 511,002 693,680 Hungary 223,633 315,515 Source: Eurostat 2003

2002 value € volume 532,209 672,601 239,882 318,139

2003 value € volume 613,146 742,938 239,158 297,521

5.1.1 Germany Germany was the leading EU importer of preserved fruit and vegetables, with imports amounting to € 3.2 billion or 3.8 million tonnes in 2003. Compared to 2002, this represented a decrease by 0.2 percent in value, while imports in terms of volume decreased by 0.1 percent. The major imported product groups in 2003 were: Product group Fruit juice/concentrate Canned vegetables Canned fruit Frozen vegetables

Import value in € 1,000 934 792 411 368

Import share in % 29 25 13 11

The above-mentioned product groups accounted for 78 percent of the total import value of selected preserved fruit and vegetables in 2003.

33

Figure 5.2

Leading suppliers of selected preserved fruit and vegetables to Germany, 2001-2003, € 1,000

700 600

2001

500

2003

2002

400 300 200 100

ry ga un H

re ec e G

n ai Sp

Ch in a

Tu rk ey

Fr an ce

iu m Be lg

It al y

d Po la n

Th e

N

et he rla

nd s

0

Source: Eurostat, 2003 The Netherlands supplied a relatively large share of German imports (18%), mainly by transit trade through the port of Rotterdam. Poland increased its importance as a trading partner of Germany and accounted for 12 percent of import value in 2003. Developing countries supplied 20 percent of the imports of selected preserved fruit and vegetables in 2003, which remained the same as in 2002. Germany continues to suffer from a bad depressed economy, high unemployment (11.5% in 2004) and a low consumer confidence. Due to this situation, consumers do not spend their money leading to enormous price pressure and competition in the retail trade. Poland and China continue their increase as suppliers of preserved fruit and vegetables to the German market, as these countries can supply at lower costs than traditional supplying countries like The Netherlands, Italy and Belgium. 5.1.2 France France was the second leading EU importer of preserved fruit and vegetables, accounting for € 2 billion or 2.3 million tonnes in 2003. French imports increased in 2003 by almost 6 percent in terms of value and by 10 percent in terms of volume. The major imported product groups in 2003 were: Product group Fruit juice/concentrate Canned vegetables Frozen vegetables Canned fruit

Import value in € 1,000 623 513 283 237

Import share in % 31 26 14 12

These product groups accounted for 83 percent of total import value of selected preserved fruit and vegetables in 2003.

34

Figure 5.3

Leading suppliers of selected preserved fruit and vegetables to France, 2001-2003, € 1,000

450 400

2001

350

2002 2003

300 250 200 150 100 50

el Is ra

M

on t

en e

gr o

Ch in a

Tu rk ey

or oc co

It al y

M

G

er m

an y

nd s

n

et he rla

ai

Se rb

Th e

ia

N

Sp

Be lg

iu m

0

Source: Eurostat, 2003 Belgium, Spain and The Netherlands were the leading suppliers of selected preserved fruit and vegetables to France accounting for respectively 20, 19 and 14 percent of total value imports. Developing countries supplied 19 percent of the total imports to France in 2003. Increasingly busy lifestyles are the reasons that French consumers spend less time in the kitchen to prepare food. Packaged food sales are therefore expected to grow, as the French adopt a more Anglo-Saxon way of eating. As selected preserved fruit and vegetables are mainly used as ingredients for a wide variety of packaged food, it is not surprising that the imports showed a healthy growth. 5.1.3 United Kingdom The United Kingdom was the third leading EU importer of selected preserved fruit and vegetables, accounting for € 1.9 billion or 3.4 million tonnes in 2003. Between 2002 and 2003, the imported value increased by 3.1 percent in value, while the imported volume increased by a hefty 28 percent. The major imported product groups in 2003 were: Product groups Canned vegetables Fruit juice/concentrate Frozen vegetables Dried fruit

Import value in € 1,000 599 519 250 221

Import share in % 31 27 13 11

These product groups accounted for 82 percent of the total import value of selected preserved fruit and vegetables in 2003.

35

Figure 5.4

Leading suppliers of selected preserved fruit and vegetables to the United Kingdom, 2001-2003, € 1,000

350 300

2001

250

2003

2002

200 150 100 50

d an Ir el

U SA

re ec e G

Tu rk ey

n ai Sp

Fr an ce

G

er m

an y

iu m Be lg

nd s et he rla

Th e

N

It al y

0

Source: Eurostat, 2003 The leading supplier to the United Kingdom in 2003 was Italy, followed by The Netherlands and Belgium. In 2003, developing countries supplied the United Kingdom with 18 percent of the total imported value of selected preserved fruit and vegetables. Sales of convenience foods, especially chilled ready meals and prepared salads, have continued to grow, as many consumers do not have the time to cook in a traditional sense. Grazing has become a growing trend, spurring growth in the snack and confectionery sectors. Many products in these sectors use preserved fruit and vegetables, which accounts for the good performance in terms of imports.

5.1.4 The Netherlands The Netherlands was the fourth largest importer of selected preserved fruit and vegetables, accounting for € 1.6 billion or 1.8 million tonnes in 2003. Between 2002 and 2003, imports decreased by 0.9 percent in value and increased by 6.9 percent in volume. The major imported product groups in 2003 were: Product group Fruit juice/concentrate Canned vegetables Canned fruit

Import value in € 1,000 852 284 99

Import share in % 54 18 6

These product groups accounted for 78 percent of the total import value of selected preserved fruit and vegetables in 2003. The Netherlands is an important transit country, as the port of Rotterdam plays a major role in the import of preserved fruit and vegetables into the EU. Especially the bulk imports of fruit concentrates play an important role.

36

Figure 5.5

Leading suppliers of selected preserved fruit and vegetables to The Netherlands, 2001-2003, € 1,000

450 400

2001

350

2002 2003

300 250 200 150 100 50

Fr an ce

It al y

n ai Sp

Ch in a

Th ai la nd

Tu rk ey

U SA

iu m Be lg

an y er m G

Br az

il

0

Source: Eurostat, 2003 Brazil was by far the leading supplier of selected preserved fruit and vegetables to The Netherlands, where it had a far more dominant position than in the other major EU markets. This was mainly caused by the high fruit juice/concentrate imports (orange juice concentrate in bulk vessels to tank farms in the Amsterdam and Rotterdam ports), a large share of which is further re-exported to the other EU member countries. Thailand and China were among The Netherlands’ leading suppliers in developing countries and took a relatively more important position in Netherlands imports than in EU overall imports. Developing countries supplied 50 percent of the total imported value during 2003. The increase in volume was most likely caused by positive developments in the fruit juice/concentrates sector. The Netherlands is a major importer of this product group and reexports consumer products after processing and packing. Prices were negatively influenced by exports to Germany, which increasingly sources selected preserved fruit and vegetables in low cost countries like Poland and China. 5.1.5 Belgium In 2003, imports of selected preserved fruit and vegetables into Belgium amounted to € 1.1 billion or 1.4 million tonnes. Compared to 2002, this represented a decrease by 2.2 percent in value and a decrease of 1.3 percent in volume. The major imported product groups in 2003 were: Product group Fruit juice/concentrate Frozen vegetables Canned vegetables

Import value in € 1,000 456 197 242

Import share in % 41 18 22

37

These product groups accounted for 81 percent of the total import value of selected preserved fruit and vegetables in 2003. Belgium has a large bulk terminal for citrus concentrates in the port of Gent, hence the large share of fruit concentrate. Much of the citrus concentrates are re-exported to other EU countries. Figure 5.6

Leading suppliers of selected preserved fruit and vegetables to Belgium, 2001-2003, € 1,000

300 2001

250

2002 2003

200 150 100 50

re ec e G

d Po la n

U SA

Tu rk ey

n ai

It al y

er m G

Sp

an y

s nd et he rla

Th e

N

Fr an ce

Br az

il

0

Source: Eurostat, 2003 In 2003, Brazil was the leading supplier to Belgium of selected preserved fruit and vegetables (terminal for concentrates in the port of Gent), followed by France. The import share of Brazil in 2002 (value) was 23 percent, but dropped during 2003 to 21 percent. The gloomy economic outlook until 2004 had a negative impact on the confidence of Belgian households and therefore on the consumption of packaged food. The imports of juices/concentrated from Brazil decreased, probably due to sourcing in other exporting countries. Imports from France increase, especially in canned vegetables, as Belgian consumers continue to place great value on taste and convenience. 5.1.6 Italy In 2003, imports of selected preserved fruit and vegetables into Italy amounted to € 1 billion or 1million tonnes. Compared to 2002, this represented an increase of 5.7 percent in value and an increase by 11 percent in volume. The major imported product groups in 2003 were: Product group Canned vegetables Fruit juice/concentrate Frozen vegetables Dried fruit Canned fruit

Import value in € 1,000 324 184 149 76 71

Import share in % 32 18 15 8 7

These product groups accounted for 80 percent of the total import value of selected preserved fruit and vegetables in 2003.

38

Figure 5.7

Leading suppliers of selected preserved fruit and vegetables to Italy, 2001-2003, € 1,000

160 2001

140

2002

120

2003

100 80 60 40 20

U SA

iu m Be lg

st ria Au

Tu rk ey

re ec e G

nd s

Th e

N

et he rla

an y er m G

Ch in a

Fr an ce

Sp

ai

n

0

Source: Eurostat, 2003 Spain overtook France as the leading supplier of selected preserved fruit and vegetables to Italy during 2003, followed by France and China. Developing countries supplied 28 percent of total value imports to Italy during 2003. In terms of convenience, packaged food products perceived as being convenient as well as healthy spurred the growth in imports of canned and frozen vegetables. The increase in imports was further stimulated by lower than expected Italian harvest of tomatoes, affecting the production of tomato paste. 5.1.7 Spain In 2003, imports of selected preserved fruit and vegetables into Spain amounted to € 628 million or 669 million tonnes. Compared to 2002, this represented a decrease of 1.2 percent in value but an increase of 3.9 percent in volume. The major imported product groups in 2003 were: Product group Canned vegetables Fruit juice/concentrate Frozen vegetables

Import value in € 1,000 217 150 103

Import share in % 35 24 16

These product groups accounted for 75 percent of the total import value of selected preserved fruit and vegetables in 2003.

39

Figure 5.8

Leading suppliers of selected preserved fruit and vegetables to Spain, 2001-2003, € 1,000

140 120

2001

100

2003

2002

80 60 40 20

or oc co M

It al y

Th ai la nd

a in Ch

Po rt ug al

iu m Be lg

an y er m G

Pe ru

nd s et he rla

Th e

N

Fr an ce

0

Source: Eurostat, 2003 The leading supplier to Spain in 2003 was France, followed by The Netherlands and Peru. In 2003, developing countries supplied Spain with 37 percent of the total imported value of selected preserved fruit and vegetables. Sales of meal replacement products, chilled processed food, ready meals and confectionery saw a strong growth in 2003. These product groups are important for preserved fruit and vegetables. Due to hectic lifestyles of many Spanish consumers, takeaway and fast food outlets continue to prosper. Although the majority of these outlets are pizzerias, outlets that offer healthy food are opening up in increasing numbers. New EU countries 5.1.8 Poland In 2003, imports of selected preserved fruit and vegetables into Poland amounted to € 188 million or 209 million tonnes. Compared to 2002, this represented a decrease of 3.4 percent in value, but an increase of 2.4 percent in volume. The major imported product groups in 2003 were: Product group Fruit juice/concentrate Canned vegetables Canned fruit Dried fruit

Import value in € 1,000 56 38 30 21

Import share in % 30 20 16 11

These product groups accounted for 77 percent of the total import value of selected preserved fruit and vegetables in 2003.

40

Figure 5.9

Leading suppliers of selected preserved fruit and vegetables to Poland, 2001-2003, € 1,000

35 2001

30

2002 2003

25 20 15 10 5

Ir an

It al y

an y er m G

Th ai la nd

el Is ra

n ai Sp

a in Ch

re ec e G

ry ga un H

Br az il

0

Source: Eurostat, 2003 The leading supplier to Poland in 2003 was Brazil, followed by Hungary and Greece. In 2003, developing countries supplied Poland with 40 percent of the total imported value of selected preserved fruit and vegetables. 5.1.9 Czech Republic In 2003, imports of selected preserved fruit and vegetables into the Czech Republic amounted to € 122 million or 171 million tonnes. Compared to 2002, this represented an increase in both value and volume by 3 and 15 percent respectively. The major imported product groups in 2003 were: Product group Fruit juice/concentrate Canned vegetables Canned fruit Frozen vegetables

Import value in € 1,000 32 28 24 14

Import share in % 26 23 20 12

These product groups accounted for 81 percent of the total import value of selected preserved fruit and vegetables in 2003.

41

Figure 5.10 Leading suppliers of selected preserved fruit and vegetables to The Czech Republic, 2001-2003, € 1,000 20 18

2001

16

2002

14

2003

12 10 8 6 4 2

Th ai la nd

ry H

un

ga

il Br az

n Sp

ai

ia ov ak Sl

It al y

an y G

Au

er m

st ria

a in Ch

Po la n

d

0

Source: Eurostat, 2003 The leading supplier to the Czech Republic in 2003 was Poland, followed by China and Austria. In 2003, developing countries supplied the Czech Republic with 31 percent of the total imported value of selected preserved fruit and vegetables. Due to a strong economy, the Czech Republic increases its imports of selected fruit and vegetables. As disposable income rises, consumers spend more on food items. Poland strengthens its position as leading supplier; proximity to the market coupled to low costs are the main reasons. 5.1.10 Hungary In 2003, imports of selected preserved fruit and vegetables into Hungary amounted to € 79 million or 87 million tonnes. Import in terms of value and volume increased substantially, compared to 2002, by 30 and 31 percent respectively. The major imported product groups in 2003 were: Product group Fruit juice/concentrate Canned fruit Canned vegetables

Import value in € 1,000 29 19 13

Import share in % 37 24 16

These product groups accounted for 77 percent of the total import value of selected preserved fruit and vegetables in 2003.

42

Figure 5.11 Leading suppliers of selected preserved fruit and vegetables to Hungary, 2001-2003, € 1,000 12 2001

10

2002 2003

8 6 4 2

n ai Sp

Th ai la nd

ia an Ro m

U SA

s nd er la

N et h

an y th e

G

er m

re ec e G

d Po la n

It al y

Br az

il

0

Source: Eurostat, 2003 The leading supplier to Hungary in 2003 was Brazil, followed by Italy and Poland. In 2003, developing countries supplied Hungary with 33 percent of the total imported value of selected preserved fruit and vegetables. Hungary continues to strengthen its position as an important supplying country to the EU. Apart from growing a wide variety of fruit and vegetables, Hungary imports increasing quantities of preserved fruit and vegetables to cater for growing consumer demands. 5.2 Imports by product group Fruit juice and concentrate was, by far, the leading imported product group, accounting for 32 percent of the imports by EU member countries. Other leading product groups were canned vegetables (26%), frozen vegetables (12%), canned fruit (10%), frozen fruit (8%) and dried fruit (6%). Less important groups were dried vegetables (3%) and provisionally preserved fruit & vegetables (2%). 5.2.1 Fruit juice/concentrate Fruit juice/concentrate was the largest product group (of selected preserved fruit and vegetables) imported by EU countries, both in value (32%) and in volume (36%) in 2003. Imports in volume increased constantly during 2001 – 2003 till 6 million tonnes in 2003. The import share of fruit juice/concentrate from developing countries shows the following picture:

Import share in value Import share in volume

2001

2002

2003

27% 27%

27% 25%

25% 23%

The leading suppliers of fruit juice/concentrate to the EU from developing countries (share of total 2003 imports in terms of value) → Brazil (16%), Thailand (1%), China (1%).

43

Figure 5.12 Imports of fruit juice/concentrate into the main importing EU countries, 2001 –2003, € 1,000

1000 900 800

2001

700

2002

600

2003

500 400 300 200 100

ar k m D en

n ai Sp

st ria Au

It al y

iu m Be lg

Ki ng do m

U ni te d

Fr an ce

s nd et he rla

Th e

N

G

er m

an y

0

Source: Eurostat 2003 In 2003, Germany was the leading importer of this product group, accounting for 21 percent of value imports by EU member countries. The Dutch port of Rotterdam is an important turnover point for fruit juice concentrate, explaining the country’s high share in total imports by EU member states. Table 5.3 Imports of fruit juice/concentrate into the EU by leading suppliers, 2001-2003, € 1,000 / tonnes 2001 value € volume Total Extra-EU Developing countries

4,027,933 1,603,448 1,088,601

Leading suppliers The Netherlands Brazil Germany Belgium Spain Italy Poland Source: Eurostat 2003

747,974 688,065 485,854 283,527 206,498 238,110 169,047

2002 value € volume

2003 value € volume

5,091,922 2,157,654 1,368,349

4,360,979 1,716,493 1,178,542

5,336,407 2,142,625 1,346,642

4,507,695 1,682,403 1,104,785

6,109,349 2,380,368 1,432,027

701,902 906,120 808,578 304,140 316,185 302,967 224,584

837,782 760,674 558,285 280,545 250,000 233,368 181,321

726,254 863,900 926,925 264,945 372,874 305,606 226,823

785,806 699,781 673,341 340,556 317,235 246,132 216,102

732,112 932,908 1,140,727 357,866 500,438 328,871 265,135

Frozen orange juice was the largest product within this product group in 2003, accounting for 35 percent of total (value) imports, followed by juice of any other single fruit or vegetable (29%), mixtures of juices (20%) and pineapple juice (16%).

44

The leading suppliers (share of total year 2003 imports in terms of value) of: frozen orange → The Netherlands (43%), Belgium (20%), Germany (12%), Brazil (5%) juice juice of any other → The Netherlands (17%), Germany (17%), Italy (11%), Poland (9%) single fruit or vegetable mixtures of → France (21%), The Netherlands (17%), United Kingdom (10%), Belgium juices (10%), Italy (9%) pineapple juice → The Netherlands (39%), Italy (13%), Germany (11%), Spain (10%), France (9%), United kingdom (6%) Although The Netherlands and Belgium are leading suppliers of frozen orange juice, this product originates mainly in Brazil from where it is shipped to The Netherlands and Belgium and often re-exported to other EU destinations. 5.2.2 Canned vegetables Canned vegetables were the second largest product imported into the EU, both in value (26%) and in volume (24%) in 2003. Total imports increased by 1.5 percent in value and by 2 percent in volume in 2003 compared to 2002. The import share of canned vegetables from developing countries shows the following picture:

Import share in value Import share in volume

2001

2002

2003

18% 15%

19% 18%

18% 19%

The leading suppliers of canned vegetables to the EU from developing countries (share of total 2003 imports in terms of value) → China (6%), Turkey (4%), Peru (3%), Morocco (2%), Thailand (1%), India (1%) Figure 5.9 Imports of canned vegetables into the main importing EU countries, 2001 –2003, € 1,000

900 800 700

2001 2002

600

2003

500 400 300 200 100

ar k m D en

en Sw ed

n ai Sp

iu m Be lg

s nd et he rla N

It al y

Th e

Fr an ce

Ki ng do m

U ni te d

G

er m

an y

0

45

Source: Eurostat 2003 In 2003, Germany was the leading importer of canned vegetables, accounting for 22 percent of the imported value by EU member countries, followed the United Kingdom (17%), France (14%), Italy (9%) and the Netherlands (8%). These countries accounted for 70 percent of imports into the EU during 2003. Table 5.4

Imports of canned vegetables into the EU by leading suppliers, 20012003, € 1,000 / tonnes

Total Extra-EU Developing countries Leading suppliers Italy The Netherlands France Spain Germany Belgium China Source: Eurostat, 2003

2001 value € volume 3,187,266 3,877,455 764,766 812,955 568,424 596,912 603,064 406,479 348,628 284,520 214,247 198,217 181,030

1,140,009 499,280 375,234 272,234 190,238 228,666 236,592

2002 value € volume 3,503,167 4,070,031 877,690 946,416 672,408 717,138 629,440 469,294 350,977 324,236 230,558 221,384 225,019

1,069,140 554,753 381,405 337,292 180,537 227,556 286,222

2003 value € volume 3,555,873 4,151,636 862,768 1,056,369 647,870 776,526 686,124 413,487 365,008 351,400 257,595 239,564 202,388

1,057,814 481,726 383,891 368,906 204,373 253,944 295,496

Tomatoes Within canned vegetables, canned tomatoes is the largest product group Tomatoes, prepared or preserved otherwise than by vinegar or acetic acid (HS code 2002) accounted for 27 percent of selected canned vegetables in 2003 by value, as the following table shows: Table 5.5

Imports of tomatoes, prepared or preserved otherwise than by vinegar or acetic acid into the EU by leading suppliers, 2001-2003, € 1,000 / tonnes

Total Extra-EU Developing countries Leading suppliers Italy Spain China Portugal Greece Source: Eurostat 2003

2001 value € volume 794,835 1,412,212 91,516 166,534 69,180 137,458

2002 value € volume 875,827 1,512,039 126,938 205,135 104,955 180,038

457,778 70,958 51,666 59,460 52,206

469,958 93,116 79,247 64,863 57,184

874,662 102,058 111,519 96,721 84,037

2003 value € volume 961,226 1.590.879 157,624 280,116 124,003 227,588

873,557 519,542 151,874 103,433 140,601 80,979 93,568 55,445 99,177 50,734

875,844 166,197 153,577 84,178 83,959

The leading suppliers (share of total year 2003 imports in terms of value) of: tomatoes → Italy (54%), Spain (11%), China (8%) olives → Spain (45%), Greece (22%), Morocco (15%), Turkey (8%) (HS2005) asparagus → China (38%), Peru (34%), The Netherlands (13%), Germany (7%), Spain (5%)

46

sweet corn tropical fruits & nuts cucumbers & gherkins

→ France (48%), Hungary (19%), Thailand (13%) → India (23%), Germany (18%), Pakistan (18%), UK (11%), South Africa (5%), Vietnam (5%) → Turkey (23%), The Netherlands (20%), Germany (20%), Belgium (9%), Hungary (8%)

Poland supplied 1 percent of total value imports in 2003 and is the only sizeable supplier of the new EU countries to the EU for canned vegetables. 5.2.3 Frozen vegetables Frozen vegetables was the third largest product imported into the EU, accounting for 12 percent in value and 19 percent in volume. The imports in terms of value decreased by 3 percent while imports in volume increased by 16 percent. The import share of frozen vegetables from developing countries showed the following figures:

Import share in value Import share in volume

2001

2002

2003

11% 6%

11% 6%

10% 5%

The leading suppliers of frozen vegetables to the EU from developing countries (share of total 2003 imports in terms of value) → China (4%), Turkey (2%), Ecuador (1%). Figure 5.10 Imports of frozen vegetables into the main EU countries, 2001 –2003, € 1,000

500 450 400

2001

350

2002

300

2003

250 200 150 100 50

d

en

an Ir el

et he r la N

Sw ed

nd s

n ai Th e

Sp

It al y

iu m Be lg

Ki ng do m

Fr an ce

U ni te d

G

er m

an y

0

Source: Eurostat 2003

47

The leading importer of frozen vegetables in 2003 was Germany, accounting for 21 percent of imports by EU member countries, followed by France (16%), the United Kingdom (14%), Belgium (11%) and Italy (9%). Together, these countries accounted for 71 percent of total value imports into the EU in 2003. 5.2.4 Canned fruit Canned fruit was the fourth largest product imported into the EU in 2003, both in value (10%) and in volume (9%). During 2003, both imports in value and volume increased with 5 percent compared to 2002. The import share of canned fruit from developing countries showed the following figures:

Import share in value Import share in volume

2001

2002

2003

32% 36%

32% 38%

33% 42%

The leading suppliers of canned fruit to the EU from developing countries (share of total 2003 imports in terms of value) → Thailand (8%), South Africa (5%), China (5%), Kenya (3%), Indonesia (3%), Turkey (2%), Philippines (1%) Figure 5.10 Imports of canned fruit into the main EU countries, 2001 –2003, € 1,000 Source: Eurostat 2003 450 400 350

2001 2002

300

2003

250 200 150 100 50

d Po la n

st ria Au

It al y

n ai Sp

iu m Be lg

s nd et he rla

Th e

N

Ki ng do m

Fr an ce

U ni te d

G

er m

an y

0

Germany was the largest importer of canned fruit in 2003, accounting for 28 percent of the total imports in value. France was the second country with 16 percent of import value, followed by the United Kingdom (13%), The Netherlands (7%) and Belgium (6%).

48

Together these countries accounted for 70 percent of the total import in value of canned fruit into the EU in 2004. Table 5.6

Total Extra-EU Developing countries

Imports of canned fruit into the EU by leading suppliers, 2001-2003, € 1,000 / tonnes 2001 value € volume 1,334,465 1,523,925 501,771 616,808 427,893 546,742

Leading suppliers Germany Spain Italy Greece Thailand The Netherlands South Africa China Source: Eurostat 2003

2002 value € volume 1,379,043 1,502,414 522,740 648,008 447,477 572,207

2003 value € volume 1,448,744 1,578,396 572,950 753,781 475,732 664,570

153,749 143,597 148,743 148,264 116,388 78,325

112,148 167,690 185,766 244,145 187,840 77,377

159,832 144,192 152,140 149,362 107,837 83,444

112,883 159,789 172,442 207,717 166,133 76,850

171,387 167,269 154,424 123,437 120,336 86,901

119,328 182,599 168,954 149,558 205,617 82,785

54,847 30,432

67,776 40,706

62,790 43,383

78,194 69,124

73,385 65,487

86,395 112,278

Canned pineapple accounted for 21 percent of total value imports in 2003, followed by peaches (18%), fruit mixtures (17%), citrus fruit (9%) and apricots (9%). The leading suppliers (share of total year 2003 imports in terms of value) of: pineapples → Thailand (36%), Kenya (13%), Indonesia (12%), The Netherlands (9%), Germany (7%) peaches → Greece (32%), Spain (22%), Germany (8%), Italy (8%), South Africa (7%), USA (4%) fruit → Italy (25%), Germany (22%), Austria (9%), the Netherlands (7%), South Africa mixtures (7%) citrus fruit → China (27%), Spain (23%), Turkey (11%), The Netherlands (9%), Germany (7%) apricots

→ Spain (21%), Greece (15%), South Africa (14%). Morocco (12%), Italy (9%)

The new EU countries are not sizeable suppliers of canned fruit to the EU. 5.2.4 Frozen fruit Frozen fruit was the fifth largest product imported into the EU, accounting for 8 percent in value and 5 percent in volume in 2003. Value imports increased by 15.7 percent in 2003, while volume imports increased by 7.7 percent compared to 2002. The import share of frozen fruit from developing countries showed the following picture:

Import share in value Import share in volume

2001

2002

2003

26% 26%

27% 27%

28% 32%

49

The leading suppliers of frozen fruit to the EU from developing countries (share of total 2003 imports in terms of value) → Serbia Montenegro (11%), China (4%), Morocco (4%), Chile (3%), Turkey (3%) Figure 5.11 Imports of frozen fruit into the main EU countries, 2001 –2003, € 1,000 450 400 350

2001 2002

300

2003

250 200 150 100 50

en Sw ed

k ar en m D

st ria Au

Be lg iu m

y al

te d

It

Ki ng do m

ds ni U

Th

e

N

et h

er la n

Fr an ce

G er m an

y

0

Source: Eurostat 2003 Germany remained by far the largest importer of frozen fruit into the EU with 37 percent of total value imports, followed by France (15%), The Netherlands (9%), United Kingdom (7%) and Italy (6%). Together these countries accounted for 74 percent of total value imports into the EU

Table 5.7

Imports of frozen fruit into the EU by leading suppliers, 2001-2003, € 1,000 / tonnes 2001 value € volume

2002 value € volume

2003 value € volume

Total Extra-EU Developing countries

833,125 766,123 533,985 517,438 217,915 196,268

931,300 832,540 582,804 547,907 251,649 225,281

1,077,940 896,857 681,431 597,183 306,114 284,268

Leading suppliers Poland Serbia Montenegro Germany The Netherlands

193,973 219,987 96,423 87,497 40,450 36,202 60,686 49,734

202,923 207,395 117,890 102,526 53,064 43,371 72,493 58,069

233,465 192,836 119,381 100,894 76,906 58,050 72,470 54,798

50

Belgium China Spain Morocco Chile Source: Eurostat 2003

39,593 9,233 24,234 18,224 32,777

29,995 11,375 32,293 22,781 22,546

43,289 12,880 29,456 24,510 31,619

32,272 16,211 36,086 29,054 23,506

50,300 42,769 39,682 38,603 34,345

36,599 55,680 43,655 38,773 26,465

5.2.5 Dried fruit Dried fruit was the sixth largest product imported into the EU in 2003, both in value (6%) and in volume (4%). The value of imports decreased by 1 percent while the volume increased by 1 percent in 2003 compared to 2002. The import share of dried fruit from developing countries showed the following figures:

Import share in value Import share in volume

2001

2002

2003

50% 62%

53% 64%

54% 65%

The leading suppliers of dried fruit to the EU from developing countries (share of total 2003 imports in terms of value) → Turkey (31%), Tunisia (6%), Iran (4%), Chile (4%), South Africa (3%)

Figure 5.12 Imports of dried fruit into the main EU countries, 2001 –2003 € 1,000 250

200

2001 2002 2003

150

100

50

D

en

m

ar k

d Po la n

n ai Sp

iu m

an et he rl N

Be lg

ds

y al It Th e

Fr an ce

an y er m G

U ni te d

Ki n

gd

om

0

Source: Eurostat 2003

51

Table 5.8

Imports of dried fruit into the EU by leading suppliers, 2001-2003, € 1,000 / tonnes 2001 value € volume

2002 2003 value € volume value € volume

Total Extra-EU Developing countries

840,709 587,823 614,774 464,203 423,028 366,284

889,555 646,207 470,266

605,307 879,632 611,293 478,550 646,271 494,323 387,706 474,680 395,068

Leading suppliers Turkey USA France Tunisia Greece Germany Iran Chile The Netherlands Source: Eurostat 2003

259,371 244,720 160,952 86,398 58,752 23,831 49,250 28,598 51,977 36,437 30,755 12,325 30,608 40,277 25,787 14,462 26,125 17,840

281,865 138,988 60,792 53,598 55,612 35,490 32,644 30,652 33,067

239,815 270,784 229,722 77,890 129,391 82,382 22,166 61,733 23,013 30,122 53,787 30,155 40,370 42,358 29,374 13,605 40,616 17,279 43,869 36,919 49,355 18,071 36,531 26,211 18,949 30,852 16,090

Dried grapes accounted for 39 percent of total value imports in 2003, followed by dates and dried figs (23%), dates (15%), and bananas (1%) Together these products accounted for nearly 80 percent of total value imports in 2003. The leading suppliers (share of total year 2003 imports in terms of value) of: dried grapes → Turkey (42%), USA (17%), Greece (10%), Iran (8%), South Africa (6%) dates and dried → Turkey (27%), Tunisia (26%), Israel (12%), France (7%), figs Algeria (6%) dried bananas → France (23%), Ecuador (22%), Philippines (11%), Germany (8%), Costa Rica (6%) dried cashew, → Germany (61%), The Netherlands (14%), Vietnam (12%) lychees, etc. dried papayas → Thailand (73%), The Netherlands (7%), Brazil (4%) dried tamarind → Thailand (45%), India (29%), Germany (13%), Philippines (3%) fruit 5.2.6 Dried vegetables Dried vegetables were the seventh largest product imported into the EU in 2003. They accounted for 3 percent of total import value and 1 percent of total import volume into the EU. Both import value and volume decreased in 2003, compared to 2002, by 8.2 and 4.5 percent respectively. The import share of dried vegetables from developing countries showed the following figures:

Import share in value Import share in volume

2001

2002

2003

33% 28%

34% 31%

32% 34%

The leading suppliers of dried vegetables to the EU from developing countries (share of total 2003 imports in terms of value) → China (14%), Turkey (4%), Egypt (3%), India (3%), Serbia Montenegro(2%)

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Figure 5.13 Imports of dried vegetables into the main EU countries, 2001 –2003, € 1,000

160 140 2001

120

2002 2003

100 80 60 40 20

n ai Sp

st ri a Au

iu m Be lg

d Po la n

y al It

Fr an ce

om

U ni te d

Ki n

gd

an et he rl

Th e

N

G

er m

an y

ds

0

Source: Eurostat 2003 Germany was the leading importer of dried vegetables, accounting for 24 percent of value imports by EU member countries in 2003. Other leading EU importers were The Netherlands (15%), the United Kingdom (12%) France (12%) and Italy (11%). Table 5.9 Imports of dried vegetables into the EU by leading suppliers, 2001 – 2003, € 1,000 / tonnes

Total Extra-EU Developing countries

2001 value € volume 475,955 200,277 253,940 85,276 154,724 55,631

Leading suppliers China 69,905 France 56,815 Germany 49,269 USA 44,832 The 32,704 Netherlands Spain 17,352 Italy 19,442 Source: Eurostat 2003

2002 value € volume 507,708 219,993 267,648 97,834 170,965 68,121

2003 value € volume 466,061 209,921 229,494 98,358 147,204 71,031

28,765 20,880 14,503 14,314 28,230

78,900 61,679 51,279 43,086 36,116

36,047 20,328 17,558 13,364 24,631

64,732 57,143 48,991 34,409 32,384

36,209 19,278 16,290 12,045 17,326

7,387 5,568

22,213 23,325

8,829 8,334

23,538 23,032

10,283 7,915

Dried onions accounted for 21 percent of the total value imports of dried vegetables into the EU, followed by dried mushrooms (19%).

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The leading suppliers of dried vegetables (share of total year 2003 imports in terms of value): dried onions → France (22%), USA (16%), Egypt (13%), India (10%), Germany (8%) dried → China (34%), Serbia Montenegro (11%), Germany (8%), mushrooms Romania (8%) 5.2.7 Provisionally preserved fruit and vegetables Provisionally preserved fruit and vegetables was the seventh largest product imported into the EU in 2003, accounting for 2 percent of value imports and 1 percent in volume imports. Value imports decreased with 6.2 percent over 2003 while the import in terms of volume did not change. The import share of provisionally preserved fruit and vegetables from developing countries showed the following figures: 2001

2002

2003

Import share in value

43%

42%

42%

Import share in volume

39%

41%

45%

The leading suppliers of provisionally preserved fruit and vegetables to the EU from developing countries (share of total 2003 imports in terms of value) → China (12%), India (9%), Morocco (7%), Turkey (6%), Serbia Montenegro (2%). Figure 5.14

Imports of provisionally preserved fruit and vegetables into the main EU countries, 2001 –2003, € 1,000

80 70 2001

60

2002 2003

50 40 30 20 10

re ec e G

Po rt ug al

iu m

an et he rl N

Be lg

ds

n ai Th e

Sp

Fr an ce

om gd

U ni te d

Ki n

er m G

It

al

an y

y

0

Source: Eurostat 2003

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The leading EU importer of provisionally preserved fruit and vegetables in 2003 was Italy, accounting for 26 percent of imports by EU member countries, followed by Germany (14%), United Kingdom (11%) and France (11%). Table 5.10

Total Extra-EU Developing countries

Imports of provisionally preserved fruit and vegetables into the EU by leading suppliers, 2001-2003, € 1,000 / tonnes 2001 value € volume

2002 value € volume

2003 value € volume

270,784 156,444 115,606

232,924 124,479 91,670

247,324 142,130 103,837

217,324 119,591 88,941

231,814 218,197 140,395 132,246 97,983 98,584

26,540 34,742 30,205

30,597 29,307 26,424

24,610 27,225 29,650

27,876 25,571 21,230

25,027 25,314 26,245

32,965 7,640 10,665 9,134 9,018

19,710 19,388 11,003 10,380 8,417

31,397 8,350 8,576 8,947 5,871

20,328 15,359 14,837 12,361 11,095

33,078 9,269 13,885 11,722 7,016

Leading suppliers China 37,688 Spain 36,962 The 27,595 Netherlands India 23,397 Morocco 18,179 Turkey 13,359 Poland 11,498 Italy 9,940 Source: Eurostat 2003

In 2003, the leading supplier of provisionally preserved fruit and vegetables was China, accounting for 12 percent of imports by EU member countries, followed by Spain (11%), (9%), India (9%) and Morocco (6%). 5.3

The role of the developing countries

Between 2002 and 2003, imports of selected preserved fruit and vegetables from developing countries decreased on a value basis from € 3.5 billion in 2002 to € 3.4 billion in 2003. Volume, however, increased from 3.6 million tonnes in 2002 to 3.9 million tonnes in 2003. The import share of developing countries in total EU imports remained rather stable as the following picture shows:

Import share in value Import share in volume

2001

2002

2003

25% 23%

26% 23%

25% 23%

55

Figure 5.15 Share of developing countries in selected preserved fruit and vegetables imported into main EU countries as a percentage of total value imports, 2001-2003

60%

50%

2001 2002

40%

2003

30%

20%

10%

om gd

U ni te d

Ki n

er m

Fr an ce

an y

y al G

Be lg

It

iu m

n ai Sp

Th e

N

et he rl

an

ds

0%

Source: Eurostat 2003 The Netherlands remained the leading importer of selected preserved fruit and vegetables from developing countries during 2003 with an import value share of 50 percent, followed by Spain (37%), Belgium (31%), Italy (28%), Germany (20%), France (19%) and the United Kingdom (18%). Together these seven EU countries accounted for 94 percent of value imports from developing countries in 2003. Product groups

Fruit juice/concentrate

Main developing country suppliers (share in Share DCs of % of import value supplied by developing total import countries, 2003) value, 2003 → Brazil (16%), Thailand (1%), China (1%)

24%

Canned vegetables → China (7%), Turkey (4%), Peru (3%), Morocco (2%), Thailand (2%)

18%

Canned fruit

→ Thailand (8%), South Africa (5%), China (4%), Kenya (3%), Indonesia (3%), Turkey (2%), Philippines (1%), Ecuador (1%)

33%

Frozen vegetables

→ China (4%), Turkey (2%), Ecuador (1%).

10%

Dried fruit

→ Turkey (31%), Tunisia (6%), Iran (4%), Chile (4%), South Africa (3%), Argentina (1%).

54%

Frozen fruit

→ Serbia Montenegro (11%), China (4%), Morocco

28%

56

(4%), Chile (3%), Turkey (3%) Dried vegetables

→ China (14%), Turkey (4%), Egypt (3%),India (3%), Serbia Montenegro (2%).

32%

Provisionally preserved fruit and vegetables

→ China (12%), India (9%), Morocco (6%), Turkey (6%), Serbia Montenegro (2%).

42%

Source: Eurostat, 2003

DCs = Developing countries

Developing countries are already major exporters of tropical and subtropical products to the new EU countries as can be seen from the figures in this chapter. Apart from direct dealings with the new EU countries, exports can also be realized through trading partners based in the EU-15 countries. The latter are effectively penetrating the new markets, especially when many trade barriers are no longer there.

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6

EXPORTS

In 2003, value exports by EU member countries of selected preserved fruit and vegetables amounted to € 12 billion, an increase of 1 percent compared to 2002. The volume in 2003 was 13 billion tonnes and remained the same as in 2002. Belgium, Italy and Spain were the leading EU exporters, accounting for 15 percent each of total value exports, followed by The Netherlands (13%), Germany (11%) and France (8%). These countries together accounted for 77 percent of total EU exports. As mentioned in chapter 5, The Netherlands and Belgium are major transit countries for preserved fruit and vegetables. The values exported by EU countries increased steadily between 2001 and 2003. Table 6.1

Total Extra-EU

Exports of preserved fruit and vegetables by the major EU exporting countries, 2001-2003, € 1,000 / tonnes 2001 value € volume 11,124,208 13,105,812 2,508,881 2,574,498

Belgium 1,637,694 Italy 1,678,620 Spain 1,471,729 The 1,400,965 Netherlands Germany 1,272,797 France 990,319 Source: Eurostat, 2003

2002 value € volume 11,861,192 13,337,834 2,717,547 2,712,477

2003 value € volume 11,971,430 13,469,427 2,548,330 2,558,243

1,999,700 2,454,654 1,578,452 1,505,986

1,765,850 1,835,886 1,626,408 1,559,235

2,062,997 2,565,462 1,761,251 1,509,016

1,804,471 1,766,992 1,761,231 1,540,147

2,171,673 2,336,046 1,906,218 1,572,015

1,550,538 885,053

1,320,241 962,863

1,526,711 894,777

1,294,595 1,012,969

1,482,673 975,315

In 2003, the leading destinations for preserved fruit and vegetables were Germany, France, the United Kingdom and The Netherlands, receiving 54 percent of total exports by EU member countries. 78 percent of the export value was intra-EU oriented. Leading extra-EU destinations were the USA (4%), Russia (2%), Switzerland and Japan. Canned vegetables were the leading exported product group (36% in value), followed by fruit juice/concentrate (26% in value), frozen vegetables (15%) and canned fruit (9%) in value in 2003. These four product groups accounted for 82 percent of the total export value. The trade in these products, however, mainly consisted of re-exports to the other EU member states. The EU member countries exported relatively small amounts of dried fruit and vegetables.

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Figure 6.1

Exports of preserved fruit and vegetables by EU member countries per product group, 2001 - 2003, % of total export value

40% 35% 30%

2001

25%

2003

2002

20% 15% 10% 5% 0% Ca nn ed

Fr ui t ve ge ta bl e

Fr oz en

Ca nn e

ju ic ve e/ ge co ta nc bl en es t ra s te s

Fr o d

fr

ui t

ze n

D rie fr ui t

d

fr ui t

D rie d

ve ge ta bl es

Source: Eurostat, 2003

6.1.1 Belgium The large imports and processing of fruit juice/concentrates are responsible for the leading position of Belgium as exporter of selected preserved fruit and vegetables. Exports amounted to € 1.8 billion or 2.2 million tonnes in 2003. Both export value and volume increased compared to 2002 by 2 and 5 percent respectively. This was due to the increasing fruit juice consumption in most EU countries. 96 percent of value exports was intra-EU, showing that processed fruit juices/concentrates are mainly re-exported to other EU countries. France was the largest export market, accounting for 28 percent of value exports, followed by Germany (24%), United Kingdom (15%) and The Netherlands (11%). 6.1.2 Italy Italy is one of the leading producers of fruit and vegetables in the EU. A substantial part of this is processed and exported to other EU countries, especially tomato processing, as about 420 thousands tonnes was exported in 2003. As the second largest exporter of selected preserved fruit and vegetables, Italy’s exports amounted to € 1.8 billion in 2003. The volume exported was 2.3 million tonnes. Compared to other leading EU exporters of selected preserved fruit and vegetables, intra-EU exports are relatively small at 68 percent.

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Germany was the largest export market, accounting for 23 percent of total value exports. United Kingdom was the second largest export market with 16 percent in value exports, followed by France (12%) and USA (4%). Processed tomatoes account for 24 percent of total exports. Tomato paste and tomato sauce form the largest product groups. 6.1.3 Spain Spain shares the second position with Italy as the largest exporter of selected preserved fruit and vegetables. Exports amounted to € 1.8 billion in 2003, an increase of 8 percent compared to 2002. Volume was 1.9 million tonnes in 2003. 67 percent of Spain’s exports are intra-EU. The USA is the largest non-EU export market, accounting for 16 percent of total exports. France is the largest export market in the EU, followed by Germany and Italy with 22, 14 and 8 percent respectively. 6.1.4 The Netherlands The Netherlands was the fourth EU exporter of selected preserved fruit and vegetables, with exports amounting to € 1.5 billion or 1.6 million tonnes in 2003. Compared to 2002, this represented a decrease of 1 percent in value, while exports in terms of volume increased by 4 percent. 91 percent in value was intra-EU exports. Germany was the largest export market, accounting for 38 percent in value of total exports from The Netherlands. France accounted for 14 percent of export value, followed by United Kingdom (13%) and Belgium (8%). As the home market of The Netherlands is small, fresh and preserved fruit and vegetables are imported as raw material, (further) processed in The Netherlands and re-exported as ingredient or consumer products to other EU countries. Germany is traditionally the largest trading partner of The Netherlands. 6.1.5 Germany Germany was the fifth EU exporter of selected preserved fruit and vegetables, with exports amounting to € 1.3 billion or 1.5 million tonnes in 2003. Compared to 2002, this represented a decrease of 2 percent in value, while exports in terms of volume decreased by 3 percent. 87 percent in value of Germany’s export was intra-EU. France was the largest export market, accounting for 21 percent of export value, followed by The Netherlands (18%), United Kingdom (11%) and Belgium (9%). These countries accounted for 60 percent of total value exports. 6.1.6 France France was the sixth largest exporter with exports amounting to € 1 billion or 975 thousand tonnes in 2003. This represented an increase in value of 5 percent and 9 percent in volume compared to 2002. 86 percent was intra-EU exports with Germany as the largest export market (20% in value), followed by Belgium (19%), United Kingdom (16%) and Italy (10%). These countries accounted for 65 percent of France’s total exports of selected preserved fruit and vegetables.

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6.1.7 United Kingdom The United Kingdom is a small exporter of selected preserved fruit and vegetables. Exports amounted to € 0,2 billion in 2003 or a volume of 236 thousands tonnes. 78 percent of exports was intra-EU. Ireland was the largest export market, accounting for 42 percent of total value exports in 2003. Product groups Fruit juice/concentrate In 2003, total exports of fruit juice/concentrate amounted to € 3.5 billion or 4.4 million tonnes. This was an increase in value by 1.3 percent and 4 percent in volume compared to 2002. The Netherlands was the largest exporter of fruit juice/concentrate with a value share of 20 percent, followed by Belgium (17%) and Germany (16%). The leading export destinations in 2003 were Germany (25% in value), France (19% in value) and the United Kingdom (12% in value). 87 percent of exports were intra-EU oriented. USA, Japan and Russia were the leading destinations outside the EU. Canned vegetables In 2003, total exports of canned vegetables amounted to € 4.3 billion or 4.9 million tonnes. The value remained stable compared to 2002, while the volume decreased with 1.2 percent compared to 2002. Italy was the largest exporter of canned vegetables with a value share of 27 percent, followed by Spain (19%), France (10%) and The Netherlands (9%). The leading export destinations in 2003 were Germany (17 % in value), United Kingdom (12% in value) and France (10% in value). 66 percent of exports were intra-EU oriented. USA, Russia, Switzerland and Australia were the leading destination outside the EU. Canned fruit Total exports of canned fruit in 2003 amounted to € 1 billion or 1 million tonnes. The value exports decreased with 6 percent in 2003 compared to 2002, while volume exports declined by 13 percent compared to 2002. Spain was the largest exporter of canned fruit with a value share of 22 percent in 2003, followed by Germany (17%) and Greece (15%). The leading export destinations in 2003 were Germany (25% in value), France (16% in value) and the United Kingdom (12% in value). 83 percent of exports were intra-EU oriented. USA, Poland, Russia and Japan were the leading export destinations outside the EU. Frozen vegetables Total exports of frozen vegetables in 2003 amounted to € 1.6 billion or 2.2 million tonnes. Compared to 2002, this represented an increase of 3 percent in value and 33 percent in volume. Belgium was the largest exporter in 2003 with a value share of 41 percent, followed by The Netherlands (11%) and Spain (11%). The leading export destinations in 2003 were Germany (23% in value), France (17 % in value) and the United Kingdom (11% in value). Intra-EU exports represented 88 percent of total exports. Leading destinations outside the EU were USA, Russia and Canada. Frozen fruit Total exports of frozen fruit amounted to € 730 million or 570 thousand tonnes in 2003. Compared to 2002, value increased by 11 percent, while volume decreased with 3 percent.

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Poland was the leading exporter with a value share of 35 percent in 2003, followed by Belgium (11%) and The Netherlands (11%). Intra-EU exports accounted for 86 percent of total exports. Leading destinations in the EU were Germany (23% in value), France (15% in value) and The Netherlands (8%). Japan, Norway, China and Russia were the leading destinations outside the EU. New EU countries Poland and Hungary were the largest exporters of preserved fruit and vegetables in 2003, exporting a value of € 750 million and € 382 million respectively. 54 percent of Poland’s export was apple juice of which 80 percent was exported to Germany. Hungary was a large exporter of sweet corn (33 % of total value exports), of which 50 percent was exported to the Russian Federation and 22 percent to Germany. Apple juice was the second largest product exported by Hungary (18 percent) of which 63 percent was exported to Germany.

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7

TRADE STRUCTURE

7.1

EU trade channels

A large part of the preserved fruit and vegetables used in the EU food industry is imported, often as ingredient from other EU countries and from outside the EU. These products are then repacked or processed for re-export. The trade of preserved fruit and vegetables is pan-European and the trade channels in the different EU countries do not differ greatly. Preserved fruit and vegetables can reach their final destination by passing through different trade channels. The selection of the trade channel and the trade partner depends on the requirements of the final customer, usually the food processing industry. By selecting one specific channel and trade partner, other trade partners are often automatically included. It is important that the exporter is aware of the different channels in the market. Most exporters will sell by means of independent traders (importers) or sales agents based in EU countries. The following major business partners can be distinguished for exporters of most preserved fruit and vegetables. Agents Agents are intermediaries executing the buying and selling orders of a customer against a commission (between 2 and 5 percent of the purchasing price). The agents never actually take possession of a shipment. Moreover, the products do not pass physically through the agents’ hands and often not even through their countries of operation. Two types of agents can be distinguished: buying agents and selling agents. The former represents the buyers, such as the food processing industry, compound houses or reexporters. The latter represents the sellers, mainly exporters. Agents are usually well informed about the current market trends, prices and users. Importers Importers buy and sell preserved fruit and vegetables on their own account, mainly to the food processing industry and for re-export. Importers take ‘long’ or ‘short’ positions in the market depending on their expectations of future price trends. If an importer sells ‘short’, he is contracting to sell products, which he does not yet possess, while taking a ‘long’ position means that he has unsold products in his trading account. Processing industry (processing importer) Processing manufacturers/processing importers buy raw materials and semi-finished products to process them further, with the goal of selling these to the end-product manufacturers. For example, in the case of dried vegetables the processing importers clean, grade, reduce the humidity content and bacteria count before selling to the food industry. The processing manufacturers purchase preserved fruit and vegetables either directly or from importers or through the services of an agent. Specialised fruit processing industries supply semi-manufactured products to the bakery, dairy and ice-cream industry. Cargill and the compound houses (see below) are examples of leading processing importers in The Netherlands. The compound houses supply their compounds in the first place to the beverage industry, the dairy industry and the ice cream industry. End-product manufacturers Some end-product manufacturers who need large quantities (on a regular basis) of ingredients purchase their ingredients directly from producers abroad, such as the beverage industry in the case of fruit juice and fruit juice concentrate. Another example is the jam industry, which buys substantial amounts of fruit pulp and frozen fruit directly from producers abroad.

63

Leading importing manufacturers in EU countries are Unilever, Cadbury Schweppes and Danone. Many end-product manufacturers use processing importers or agents, as these offer a reference point situated within their own country. Retail and food service organisations Retailers carry out the final stage of selling preserved fruit and vegetables to consumers, accounting for a very large share of the total sales. The retail sectors hardly ever import directly, but buy from wholesalers or importers. In the case of jam and canned vegetables, retailers have a strong negotiating position due to the many sourcing possibilities between products and suppliers, as well as the practice of private labelling. In the EU, large supermarket buying groups are Ahold (The Netherlands), Carrefour (France), Metro (Germany), Tesco (United Kingdom) and Aldi (Germany). Because of their much smaller size, the food service sectors do not usually import directly from source. Packers These organisations pack goods in standard packs for the European market. The (re) packers keep the goods on stock in their warehouse, at their own risk, and sometimes under their own brand or the private label of a customer. These packers sometimes function as importers as well. More or less the same trade structure applies to all the products discussed in this survey. Many importers, agents, or repackers are specialised in more than one product group. For example, Catz Int. is specialised in dried fruit and frozen fruit and vegetables. Some importers also act as an agent. Moreover, most importers trade in preserved fruit and vegetables in consumer packs and catering packs, but also in preserved fruit and vegetables for industrial use. Potential exporters in developing countries should contact importers, agents and packers in the EU. These intermediaries have long established links with their customers and are in a better position (than foreign processors) to know the requirements of the local market and of individual end users. They supply the food processing industry and supermarkets chains and are financially able to support exclusive contracts and advertising campaigns, as well as to service special requirements. There are few agents for juice, although they are involved in the juice trade throughout Europe (Amsterdam and Rotterdam serve as the gateways to Europe for Brazilian orange juice concentrate). Before a large share of the imports is re-exported, the concentrate is often processed by compound houses, which mix, pack and/or standardize the product into the basis for the manufacturing of a wide range of products. The four biggest compound houses or importers (Döhler-Eurocitrus, SVZ, Cargill and Hiwa) and the beverage industry are mostly supplied directly from the source or from tank farms. The activities of agents/importers are generally limited to responding to spot purchases from stock and searching for products of a different nature or of a special quality. New EU countries The food processing industry imports through the following channels: - direct from foreign suppliers; especially foreign owned and large companies - through importers in the present 15 EU countries - through local agents.

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Figure 7.1

Distribution channels for fruit juice concentrate producer/exporter

agent/broker

compound house

other food industries

beverage industry

re-exports

retailers

wholesalers

food service

consumers

More or less the same trade structure applies to the other product groups discussed in this survey. The type of food industry and the importance of the different channels, however, can differ. Many importers, agents, or repackers trade in more than one product group. Some importers also act as an agent. The soup industry (dried vegetables), the sauce industry (sterilised vegetables), the pickles industry (semi-worked pickles), the frozen food industry and other large food manufacturers mostly import directly from source. Some, mostly smaller food manufacturers, are served by intermediaries, who may or may not repack or reprocess (cleaning, grading, and reducing the humidity content and bacteria count for dried products) the products. Often they pack the fruit and vegetables under their manufacturer’s brand or a private label. Mostly, they function as importer, wholesaler and exporter at the same time.

65

Figure 7.2

Distribution channels for other preserved fruit and vegetables producer/exporter

importer/agent

repacker/processor

wholesaler

retail and food service sector

consumers Selected intermediaries of preserved fruit and vegetables in major EU countries 7.1.1 Germany Company Bayernwald GmbH Dohler group Henry Lamotte

Type Importer/producer Importer/producer Importer`

Schroeder KG. Ernst Rickertsen Rudolf Wild GmbH

Trader Importer Importer/producer

7.1.2 France Bureau Couecou La Pulpe Comp.Alimentaire

Agent/broker Importer Importer/packer

Eurobroker SA

Trader

7.1.3 United Kingdom Gerber Foods importer/producer H.J. Uren & Sons Importer/producer European Food Ingredients Netra Agro UK

Products juices/ concentrates juices/concentrates canned fruit/veg. tomato products frozen fruit/veg. preserved fruit/veg. dried fruit preserved fruit/veg. juice concentrates

Website http://www.bayernwald.com http://www.doehler.com http://www.lamotte.de http://www.iska.de http://www.erik.de http://www.wild.de

juices/concentrates http://www.couecou.fr canned fruit http://www.lapulpe.fr dried fruit http://www.compagnie-alimentaire.com dried fruit http://www,eurobroker.fr

Importer/producer

juices/concentrates http://www.gerber.co.uk juices/concentrates http://www.uren.com frozen fruit/veg. dried fruit/veg. http://www.efiltd.com

Importer

preserved fruit/veg. http://www.netra-agro.com

7.1.4 Spain Export Trading S.A. Agent/broker/ Importer

canned fruit/veg. tomato products frozen fruit/veg.

http://www.arrakis.es

66

7.1.5 Italy Italconserve SpA Moellhausen SpA

Producer Broker/producer

7.1.6 The Netherlands Catz International Importer Riedel Drinks Importer/producer Alanheri Trader Dohler-Euro Citrus Importer/producer Van Eeghen Intern. Trader SVZ International Importer/producer

canned fruit/veg. http://www.italconserve.com juices/concentrates http://www.moellhausen.com dried fruit/veg. juices/concentrates dried fruit/veg. juices/concentrates preserved fruit dried fruit/veg. juices/concentrates preserved fruit/veg.

http://www.catz.nl http://www.riedel.nl http://www.alanheri.com http://www.dohler.com http://www.vaneeghen.com http://www.svz.com

7.2 Distribution channels for developing country exporters Importers represent an interesting distribution channel for developing country exporters of preserved fruit and vegetables. Importers not only have experience and knowledge of the international market, they also have strong relationships with suppliers and buyers all over the world. Some of the importers have an Internet site, where interested parties can find more information on the field in which these importers are active. Trade fairs are also important meeting points for developing countries’ exporters and EU importers. A trade fair is a good opportunity for making personal contact between business partners. Please refer to Appendix 3.5 for contact details of trade fairs. Trade partners in the different product groups can be described as follows: Fruit juices/concentrates - large, international operating importers - specialised - require large volumes Frozen fruit and vegetables - large importers Dried fruit and vegetables - smaller importers - repackers Canned fruit and vegetables - large, multinational companies (Delmonte, Dole) - importing retailers - specialised importers for the food service segment.

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8

PRICES

8.1 Price developments Price developments are strongly dependent on a number of factors: - harvest output in the supplying countries in relationship to demand; - negotiations between the different chain partners - the quality of fresh fruit and vegetables aimed at the consumer markets. When quality is not up to standard the products will be diverted to the industry for processing, thus putting pressure on prices. 8.2 Sources of price information Importers and agents in EU countries are the best sources for price information. They are in constant touch with their customers and suppliers and have up-to-date information regarding the current process and pricing trends. Contrary to fresh fruit and vegetables, prices for preserved fruit and vegetables are scarcely available in trade magazines and on the Internet. ITC and FAO publish prices for some products, while Agra Europe publishes prices in the Public Ledger and Fruit and Vegetable Markets. Contact details and publication titles can be found in appendix 3.2

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9

EU MARKET ACCESS REQUIREMENTS

9.1

Non-tariff trade barriers

Exporters in developing countries wishing to penetrate the European Union markets will have to comply with several access requirements. Apart from import tariffs and quotas these so-called non-tariff trade barriers play an important role, as there are food legislation requirements as well as requirements set by the market itself. CBI’s database on European non-tariff trade barriers is called AccessGuide. Exporters in developing countries can check relevant non-tariff barriers for preserved fruit and vegetables by going to http://www.cbi.nl/accessguide First you can register, then go to ‘quick search’ and select what you need under ‘product group’: prepared foodstuffs, beverages, spirits, tobacco…… You will find information on EU requirements for product safety, consumer health, etc. as well as requirements dealing with environmental issues and social standards. 9.1.1

Food legislation

Step-by-step food legislation in the EU is being fully harmonised: the same legislation will apply to all EU member states. EU legislation also applies to the new countries which became members of the EU as per May 2004. Two forms of EU food legislation can be distinguished: Directives Directives have to be implemented by the member states into their national legislation within a certain period of time. Regulations Regulations come into force as law directly. Originally, EU food legislation was primarily product-related. At present, following new EU policy, it is primarily horizontal legislation, applying to all categories of food products In recent years, legislation on food products has become more complex and stringent. In 2002, the regulation (EC) 178/2002 was adopted. The main topics covered for EU processors and importers are: • General principles and requirements of food legislation • The establishment of the European Food Safety Authority • Procedures in matters of food safety The regulation is commonly known as the General Food Law. It has, so to say, an umbrella function over all existing EU food legislation. It applies to all stages of the production, processing and distribution of food, also of feed products, fed to food-producing animals. EU food legislation will not impose direct conditions on the manufacturing processes of exporters in developing countries, but importers will because they want to be sure that they (including their products) meet all relevant legislation. The main purpose of the General Food Law is to guarantee a high level of protection of human life and health and, where appropriate, the protection of animal health and welfare, plant health and the environment. The following articles of the General Food Law are important for exporters in developing countries:

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Article 11 It states that: food and feed imported into the EU for marketing shall comply with the relevant requirements of food law or conditions recognised by the Community. If specific agreements exist between the EU and your country, all food should comply with those requirements. Article 14 This article relates to safety requirements for food. It states that, although a product complies with all specific requirements of food legislation, it is not allowed on the market if a new hazard is found for which no requirements yet exist. Article 18 This article relates to the traceability of food: a producer or importer putting a product on the market in any EU country should be able to inform a food inspector within a few hours, as to the origin of all ingredients (including batch of production) and the chain of supply. Strictly spoken, the requirements apply to food business located in the EU (including importers). Although the requirements do not apply to countries outside the EU, European importers will most likely require from suppliers in third countries that they have an accurate tracing system in place. Explicit rules for food hygiene have already been laid down in the Directive 93/43/EEC. Hygiene is defined as all measures to ensure safety and wholesomeness of foodstuffs. The new regulation states explicitly that foodstuffs cannot be placed on the EU market if they are unsafe. This was, at least implicitly, already regulated through national food laws, but now there is an EU-wide explicit regulation. The core aspects of the General Food Law came into force in January 2005. Product regulations differ per species of preserved fruit & vegetables. For detailed information, consult AccessGuide in the first place. The following sources can also be contacted: • Your trading partner in the EU • The relevant food inspection authority in the EU country concerned • The embassy of the EU member country in your country. The following EU product legislation is relevant for preserved fruit & vegetables: Fruit juice/concentrate EU Directive 2001/112/EC specifies a definition of fruit juice and nectar. Fruit juice is comprised of 100 percent juice i.e. no additions of water or other ingredients. Fruit nectar consists partly of fruit juice and partly of water and sugar. The proportion of fruit juice depends on the kind of fruit and varies between 25 percent and 50 percent. These definitions apply in all European countries. Fruit juice drinks (soft drinks based on fruit juice) are not covered in the EU fruit juice directives, and legislation may vary from country to country. Usually they are required to contain a minimum of approx. 10 percent of comminuted/crushed/squeezed fruit and they may contain sweeteners, flavourings, colouring and sometimes added vitamins. Due to the high content of water (90%) in fruit juice drinks, it is not an option for producers in developing countries to export this product to EU countries. Addition of vitamins to fruit juices and fruit nectars, with connected health claims, has become common practice in many EU countries. However, the addition of vitamins is still not harmonised within the EU. The differences are apparent in regulations about: • Which vitamins are allowed or not

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In which products they are allowed or not In which quantity Under what conditions the addition of vitamins should be labelled

In general, in The Netherlands, the UK and Belgium vitaminisation is allowed under certain conditions. In Germany, however, the addition of vitamins is regulated more strictly while in France it is not allowed. It is therefore always wise to consult experts about the precise conditions, before starting to export to these countries. Canned food Apart from hygiene and food safety requirements there is no EU legislation concerning canned foods. When canning food, it is important to completely control the elimination of bacteria, which can cause diseases or produce poisonous toxins or deteriorate the product. The most virulent species is the botulinum bacteria. Even a taste of food containing this toxin can be fatal to the consumer. Whether food should be processed in a pressure canner or autoclave (i.e. sterilisation > 1230 C) or boiling water canner (i.e. pasteurisation at approximately 950 C) depends on the acidity of the food. Acidity can be natural, as in most fruit, or added. Low-acid (pH>4.6) canned food contains too little acidity to prevent the growth of the botulinum bacteria, while acid food (pH