The Netherlands plays a limited role, as a fresh fruit exporter, in the global market. Although this country is the fourth largest exporter of fresh fruit in the world, it is primarily a distribution country. It imports more fresh fruit and nuts than it exports. The majority of these exports - more than 92% - go to countries within the EU. Exports to countries outside the EU are limited to a few distinctive products, such as Conference pears. Many popular import products like bananas, citrus, soft fruit, stone fruit, grapes, melons, mangoes and avocados can not be grown (at competitive prices) or in the right season in the Netherlands. Rabobank reports that in order to keep fulfilling the distribution function in the European market, it is of vital importance that Dutch importers put thought into how they are can continue to source sufficient, good quality, and responsibly cultivated, fruit.
Action needs to be taken to ensure availability of imported fruit
The rising global demand is putting increased pressure on the availability of import fruit for the EU market. Over the next five years, a worldwide average growth of 4% in the consumption of fresh fruit is expected. At the same time, international supplier are choosing, more and more, to sell their fruit on fast-growing markets outside of the EU. They do this because of higher sales prices, less strict product and/or production requirements, and as a method of risk spreading.
In order to have access to sufficient, good quality import fruits, Dutch importers continually focus on upholding good relationships with suppliers. In addition, supplier credit is given regularly, and hard-to-sell products are often taken. More will, however, have to be done to maintain lasting relationships with foreign fruit suppliers. For instance:
- introducing new concepts (with attractive surcharges), in collaboration with suppliers to the market. For example, a concept with a minimum price guarantee for the grower.
- (co)-investing in foreign fruit cultivation, packaging facilities or export businesses.
- investing in new areas of origin (e.g. Africa).
In addition to success factors such as reliability, network, and product and market knowledge, financial strength is becoming an import factor for importers. It is often easier for financially strong companies to apply the above-mentioned 'sourcing strategies' than it is for their financially weaker competitors.
The global fresh fruit market has three major growth engines
Since 2010, the trade in fresh fruit worldwide has grown by 6% annually. This growth is being accelerated by emerging markets such as Vietnam, Thailand, South Korea, India and the United Arab Emirates. In addition, traditionally large markets like the US, the EU and, of course, China, are also making a major contribution to this (Figure 1). It is striking that there is not only more demand for fruit, but a demand for, especially, 'different' fruit: tastier fruit, exotic fruit, and fruit that is easy to snack on.
Figure 1: The importation of fresh fruit and nuts is growing in various regions of the world. Source: Rabobank, based on the UN-Comtrade, 2017).
China: growth giant
The most notable of all the fresh fruit growth markets is China. Here, the growth in import values is combined with a high percentage growth. In Asian countries, imports of fresh fruit and nuts has risen from USD 2,1 billion to USD 5,9 million since 2010. This is an average annual increase of more than 18%. The Chinese market continues to grow, and will continue to demand products of increasingly high quality. Think, here, of cherries, soft fruit, kiwis, avocado, and organically-grown fruit. The bigger demand and availability in China is due to, among other things, growth of income, improvements in logistics, and market access granted to foreign products.
There are, in fact, many consumer trends in a growing market such as China that resemble those of more mature markets such as the EU and US. In some areas, such as e-commerce, China is ahead of Western markets. According to the retail research company, IGD, the online-market for daily grocery shopping in China will grow from USD 7 billion in 2015 to USD 178 billion in 2020. In Germany, this same market is expected to grow from USD 3 billion to USD 6 billion. Another difference with the European market is the importance of the use of fresh fruit brands to gain the trust of Chinese consumers.
Last year, Chile surpassed Thailand as the most important foreign fruit supplier on the Chinese market (Figure 2). Chile's strong position is thanks to its opposite production season, and its broad range of good quality, popular fruit. These include stone fruits, grapes, avocados, kiwis and blueberries. Other export countries that are making headway in the Chinese market are New Zealand, Australia and Peru.
Just good is no longer good enough for the American market
The outlook for markets in North America is good. Yet, it is not as simple as just meeting the demands of the supermarket chains and consumers. American consumers have high expectations when it comes to fresh fruit's quality, consistency, availability, affordability, and sustainability.
Over the next five years, North America's fresh fruit market volume is expected to increase by an average of 1,7% per year. This is more than in the recent years. The market will increase even more in value because there is a relatively large increase in expensive fruit. Examples are exotics, cut fruit, new grape varieties, berries and organic fruit.
More than half of the total volume of fresh fruit and nuts imported in America comes from Mexico and Chile. Other important countries of origin are large banana suppliers such as Ecuador and Costa Rica. A country that is fast gaining a market share in North America - and in other parts of the world - is Peru. With avocados, blueberries and grapes, Peru has become an important player.
Accelerated growth for nuts, berries, avocados on the EU market
In recent years, the total demand for fresh fruit has hardly increased on the EU market. Yet, a slight increase of 0,9% is expected for the next few years. Just as in the US and China, the demand for more expensive fruits, in particular, will rise in the EU. These are, for instance, soft fruit, tastier varieties, niches, and exotic fruit (including avocados). Since a large portion of the popular fruit varieties are, for at least part of the year, imported, the supply (from outside the EU) will grow faster than consumption.
There is a lot of fruit trading between EU countries. Here, Spain is, by far, the most important supplier. When it comes to importing from countries outside the EU, the range of suppliers is quite diverse (Figure 4). About half of all fresh fruit imported to the EU consists of nuts and bananas. For nuts, Turkey and the US are important countries of origin. The bananas come primarily from Costa Rica, Ecuador and Colombia. South Africa and Chile have a firm market position when it comes to other foreign fruit. This is partly due to products with an opposite production season, such as grapes, blueberries and citrus, and partly because they supply fruit that is hardly grown in the EU, such as avocados. Just as in the other major markets, the advancement of Peru is the EU market is notable. Morocco is also gaining some leeway with fruit (including citrus and berries).