Short Title:
How to do business?
Sector:
Fresh Fruit and Vegetables
Reading time:
7
Updated at:
Wednesday, May 4, 2016
Document name:
Doing business - Fresh Fruit and Vegetables (2016)
Intro:
The European fresh fruit and vegetables sector is a dynamic world full of opportunity. However, it is also a complex and highly-professional world, with requirements and expectations you will need to comply with to be successful. These tips for exporters from developing countries will help you prepare yourselves for doing business in Europe.
Content study:
Title:
Ensure quality above all else
Body:
Quality is your top priority in this sector. Anything less than the good quality, is simply not good enough.
To monitor quality, there are European quality and marketing standards that your products have to comply with. On top of these, each buyer has his/her own specific quality requirements and expectations.
Quality requirements are not open for discussion.
Tips:
Tips:
Quality is your top priority. Anything less than the good, is simply not good enough.
Study and implement European quality and marketing standards.
Don’t overlook a buyer’s additional quality requirements.
Title:
Implement food safety protocols and certification
Body:
A minimum requirement for doing business with European buyers is GlobalGap certification. Your products and processes must therefore be certified. It is also vital that you comply with the EU food safety laws and standards as described by the EU Export Help.
On top of this, retail organisations, especially in Northern Europe, have specific demands with respect to the maximum residue levels allowed on products. The levels demanded by retail organisations are in fact much stricter than the European food safety law requires. They are also stricter than the certification from GlobalGap requires.
Next to the GlobalGap food safety protocol, there are also buyer requirements for hygiene in the processing and packaging. HACCP (Hazard Analysis and Critical Control Point) standards are a minimum requirement.
Many European supermarkets call for compliance with BRC Global Standards from the British Retail Consortium (BRC). There are other certification bodies and international protocols like those from the IFS (International Featured Standards).
Tips:
Tips:
Keep in mind that most retail organisations have their own, stricter requirements for food safety.
Get certified. GlobalGap certification is a minimum requirement for doing business with European buyers.
HACCP is a minimum standard for hygiene in processing and packaging.
BRC (British Retail Consortium) audits and certifies hygiene and quality protocols commonly required by European supermarkets.
Comply with IFS (International Featured Standards) for food and non-food products and related services.
Title:
Match supply with demand
Body:
Whether or not you are a producer or an exporter, you will need to find buyers that demand the quantities you can supply. It makes no sense to approach a buyer who is looking for 200 tons of a product per week, when you can only supply 10 tons. Similarly, if you can produce or supply large quantities, it makes no sense to approach small, niche importers.
Always verify your available volume of exportable quality product, and then find a buyer to match.
In this sector, volumes are considered bulk when they reach at least one container per week in exportable quality and condition during a production season.
In terms of smaller exotics which can be air freighted, you need to be able to produce or supply a minimum workable volume per week. If your products fall into the exotics category, look for specialistic importers trading in these kind of products and check what the minimum workable volume per week is for them.
Tips:
Tips:
Find buyers that demand the quantities you can supply.
Volumes are considered bulk when they reach at least one container per week.
Producers or suppliers of smaller exotics need to look for specialistic importers.
See also the CBI survey on how to find buyers in the European fresh fruit and vegetable sector.
Title:
Respect sustainability as a key requirement
Body:
Sustainability has become a key requirement and is demanded by consumers and retailers across Europe. This is because consumers have become more aware about the origins of the products they buy. They are concerned about the environment, the social circumstances, labour rights; fair trading practices and the general wellbeing of the people and places products are produced in.
In turn, supermarkets have sharpened sustainability requirements in their sourcing and procurement. By doing so, they hope to mitigate these concerns, improve working conditions and protect the environment.
There are currently a number of sustainablity protocols and systems available such as ETI, BSCI, SEDEX, GRASP, Fair for Life for you to comply with. It is expected that these will be refined in the future and consolidated into only a few major protocols.
You are advised to implement one of these sustainability protocols.
Tips:
Tips:
Major buyers demand compliance with sustainability protocols.
Research & implement a sustainability protocol, for example: ETI, BSCI, SEDEX, GRASP, Fair for Life.
Read the CBI survey on buyer requirements for an overview of additional market standards.
Title:
Provide reliability and continuity
Body:
Never promise more than you can fulfill. The competition in this sector may be fierce, but buyers are not eager to hop around from supplier to supplier. They want to build reliable partnerships with trustworthy suppliers, and provide continuity for their businesses.
This means that you must always respect the agreements you make with buyers. Only so called ‘acts of God’ (e.g. floods, hail storms, drought, etc.) are acceptable reason for a breech or deviation of an agreement. Poor planning or other management errors on the other hand, are unacceptable.
Plan your production, buying of inputs, packaging materials, your processing, logistics etc., very thoroughly.
Tips:
Tips:
Never promise more than you can fulfill.
European buyers want to build reliable partnerships with trustworthy suppliers.
Always respect the agreements you make with buyers.
Plan your production, buying of inputs, packaging materials, your processing, logistics, etc., very thoroughly.
Title:
Optimise communication and timing
Body:
Generally speaking, the business communication in the world of fresh fruit and vegetables is straightforward, short and direct. Buyers have little patience for unnecessary communication, so you need to be clear and to the point. You must not leave any room for interpretation or doubt.
A European buyer expects you to be available according to his/her timezone. They will make some allowance for time differences, but make sure you are working to their business operating hours.
Buyers will expect you to answer emails (and any other types of messages) the same working day. This calls for good internet access.
Communicate in good times and in bad times. Do not hide from delivering bad news. If something goes wrong, communicate this with the buyer directly. Then look for possible solutions together and discuss the consequences openly.
Tips:
Tips:
Business communication in the world of fresh fruit and vegetables is straightforward, short and direct.
Europeans have many different communication styles. Read this overview provided by Passport to Trade 2.0 for insights into the different business cultures across Europe.
Communication must be clear and to the point.
Answer emails (and any other types of messages) the same working day.
Work to the buyer’s timezone.
Communicate in good times and in bad. Do not hide from delivering bad news. If something goes wrong, communicate this with the buyer directly and openly.
Title:
Provide logistics solutions
Body:
Some buyers are willing to pay the freight costs. However, they will expect you to find out the best transit schedules and the best rates. You are also responsible for the correct documentation for exporting to the EU.
Make sure you provide your buyer with freight rates, transit times and arrival schedules, so s/he can calculate the costs and plan further trade.
Make sure you work with a good logistics agent and freight forwarder. This will help you to provide the best logistics solutions, and make sure you have the correct documents that have been drawn up by experts.
Tips:
Tips:
Provide your buyers with freight rates, transit times and arrival schedules
Find the best transit schedules and the best rates.
Work with a good logistics agent and freight forwarder.
Make sure you have the correct documentation drawn up by experts.
Title:
Offer clear and workable agreements
Body:
When you find an interested buyer, make sure your offer them clear, complete and workable agreements. Be very concise about what you offer and include information on: product, variety, sizes/counts, volume, certification, season, packaging, boxes per pallet/container, etcetera.
Cash and credit are important working tools for your buyers. Expect attempts to push the payment deadlines or payments right at the very last moment. It is therefore very important to make sure the terms of your agreements are clear and include Inco terms, trading and payment terms.
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Tips:
Tips:
Your agreements must be clear and comprehensive.
Include Inco terms, trading and payment terms.
Expect attempts to push the payment deadlines or payments right at the very last moment.
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