CBI Market channels

and segments for fresh

fruit and vegetables
Your trade route through the European market
Management summary
The European retail market for fresh fruit and vegetables is dominated by the
supermarkets. About 60-90% of produce is sold through supermarkets,
depending on the product and country. Supermarkets are demanding
customers, generally with more than minimal requirements on quality and
efficient consumer response, and importer-wholesalers are the key to supplying
them. Some large supermarkets have special service providers who together
with importers and local producers attend to the smooth delivery and sourcing
of good quality products. Knowledge of marketing standards; export documents,
such as the certificate of conformity and the phytosanitary document and
certification is vital and adherence to good practices in terms of product
treatment and logistics is an absolute must. Supermarkets and importers can
choose from many suppliers so you need to set yourself apart by differentiating
on product quality, trustworthiness and market insight if you are to become a
valuable partner in the supply chain.
Figure 1: Market channels EU and EFTA market for fresh fruit and vegetables
(explanation of the boxes: see annex 1)

Developing
country

European
market

Market
segments

Developing
country exporter
Sorting/ washing/
packing / transport

Importer/
wholesaler

Group age,
Re-packing

Retail:
Supermarkets
Specialised stores
Street markets

Food service

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CBI Market Channels and Segments Fresh Fruit and Vegetables

Importers are the main key to the European market

Importance of importers/distributors:
Most fresh produce from developing
countries is traded via importing
wholesalers. Importers supplying large retail
formulas, are changing towards a lean and
mean organisation. Without their own
facilities (which is hired only when
necessary) in the long term wholesalers are
developing towards a middleman role
between producers and retailers, to organize
European distribution. Port of entry can be
any port. From there distribution is
organised.
Smaller wholesalers more and more search
for niche channels, e.g. by specializing only
in exotics.
Increasing role of service providers:
Even though there are many wholesalers,
there is extensive consolidation and
supermarkets are increasingly organising
more or less integrated supply chains with a
number of preferred suppliers or service
providers, based on trust and mutual
cooperation. This enhances responsiveness
and safeguards product quality and
promotional planning. Larger wholesalers
will also often act as service providers to the
supermarkets.
The Netherlands is an important
gateway to the European market: A
great deal of produce is imported through
the Netherlands (Rotterdam port) only to be
exported to other European markets such as
Germany and the UK. The strongest point
for Rotterdam is the fast track record on
group age services. The importance of
supply chain logistics in terms of the quality
of the final product must not be
underestimated.

Considerations for action:

Choose professional partners with access to

promising markets, experience and
knowledge.

Find importers at Trade Fairs such as Fruit

Logistica.

If you are trading in Ethnic products finding

a smaller specialized wholesaler can be
necessary.

Explore the best distribution channels with

attention to market access as well as
product freshness and quality.
Contact Frugi Venta to get more information
about potential Dutch importers with
European distribution.

Supermarkets dominate sales of fruits and vegetables

Considerations for action:

The main market segments for fresh fruit
Supermarkets may prove to be demanding
and vegetables are supermarkets and the
customers. Take advantage of the
food service sector (restaurants, hotels,
knowledge of importers/wholesalers.
institutional market). Besides these, there
are also specialised stores and street
markets for vegetables and fruit. For organic
produce, speciality organic shops and
organic supermarkets are an important sales
channel.
Dominance of supermarkets: The

Try to set your product apart from

supermarkets have market shares of
competitor products by differentiating.
between 60 and 90 per cent in the retail

The power balance in the supply chain is

sales of vegetables and fruits, depending on
changing. The power of good suppliers is
the country. The market share dominated by
increasing. More and more they are able to
supermarkets tends to be higher in
set the market price. So it becomes more
Northwest Europe than in Southern Europe.
important to be regarded as a good

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CBI Market Channels and Segments Fresh Fruit and Vegetables

Traditional specialist stores and street

markets have seen their market shares
decrease to about 10% in most countries.
The dominance of the major supermarkets
and centralised buying has increased
supermarkets power within the market and
product requirements throughout Europe.
This makes it harder for DC exporters as
product requirements increase.
Supermarkets can generally choose from
many suppliers especially for
undifferentiated products.
In the long term smaller retail formulas will
not be able to stay in business due to long
lasting price competition and less favorable
advantages of scale. Large retail formulas
will more and more dominate the market for
fresh fruits and vegetables.
The out-of-home market experiences
difficulties because of the economic crisis,
especially restaurants. This market channel
is supplied by the same importers as the
retail. The market share of out-of-home
varies from about 10 to 30% in the different
European countries.

supplier.

Post-harvest treatment and logistics are crucial

Considerations for action:

Post-harvest treatment and logistics

Cleaning and decontamination of (transport)

are crucial: Many companies and agents
equipment is crucial. Implement and actively
are active in the supply channel. Products
operate quality and hygiene procedures. Use
are usually sorted, washed, packed and
guidelines such as can be found here:
sometimes minimally processed (cut or
guidelines
sliced) and repacked before entering the
retail channel. Packers operate at different
stages of the supply chain to wash and repack products from wholesale into retail
packages. Throughout the supply chain
cleaning and decontamination of
equipment, containers, pallets, crates
and vehicles is of the utmost
importance. Exporters must meet the
demands with regard to logistics and special
attention should be paid to timely delivery,
cooling and hygiene.
Sea or airfreight depends on the type of
Logistics is very important: ensure good
product and distance: Common fruits such
logistical treatment of produce and check for
as bananas and citrus and other more
the best ways to maintain product quality.
durable produce is usually shipped by sea,
while more exotic and premium priced fruits
and vegetables are flown by airfreight. As
sea transport is less expensive and more
environmentally friendly, technological
developments in sea transport (storage,
conditioned containers and ripening) are
being explored.
Efficient consumer response: Most

ECR is very important when supplying to

retailers and their suppliers operate Efficient
supermarkets. Be trustworthy and flexible.
Consumer Response (ECR) systems to
adjust flexibly and rapidly to changing
demand. Timely delivery, flexibility of supply

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CBI Market Channels and Segments Fresh Fruit and Vegetables

and adherence to all logistical requirements

to guarantee product quality is crucial.
Exporters and growers must be able to meet
the logistical requirements of the supply
chain. To ensure product quality and ECR,
most supply chains are strictly organised
under the direction of the
importer/wholesaler or service provider in
relation to adherence to the retailers
demands.

Border inspections, certificates and marketing standards

Considerations for action:

Border inspections require the provision
Compliance with EU regulations is vital. Take
of several documents: Before entering the
note of the marketing standards and check
EU market all fresh produce is inspected at a
for compliance with all regulations and
Border Inspection Post. The shipment is
necessary documents before exporting.
checked for relevant documentation,
identity, physical plant health and
compliance with the European Commissions
general and specific import requirements,
such as the Certificate of Conformity and the
Phytosanitary Certificate. Part or all of the
shipment is also checked for quarantine
organisms. Commission Regulation
EC/1756/2004 provides for plant health
checks at a reduced frequency where this
can be justified.1 Application for the
Certificate of Conformity and the
Phytosanitary Certificate is the responsibility
of the exporter.
Product traceability is not optional:

Tracking and tracing requires special

European regulation (No. 178/2002)
working methods and systems. Implement
requires traceability throughout the supply
them fully before exporting.
chain. In case of any health or phytosanitary
hazard the authorities can order a total
product recall.
EU marketing standards set the

Importers are key to providing you with

minimum requirements for product
knowledge on all kind of (legal)
quality: The EU has several marketing
requirements.
standards in place for fruits and vegetables
(sound, fair and marketable quality, and
country of origin labelling). Council
Regulation (EC) No 1234/2007 applies to all
vegetables and fruits but there are also
specific marketing standards for items such
as apples, citrus fruit, kiwi fruit, lettuces,
peaches and nectarines, pears, strawberries,
sweet peppers, table grapes and tomatoes:
Council Regulation (EC) No 1221/2008. New
EU rules on food information and food
labelling (EC 1169/2011) is coming into
force.

For consignments containing plant or plant products which are covered by EU plant health
legislation (listed in part B of Annex V to Directive 2000/29/EC), the exporter must obtain a
phytosanitary certificate issued by the competent authority of the exporting country
(European Commission 2006a). This normally involves registration.

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CBI Market Channels and Segments Fresh Fruit and Vegetables

Retail segment: overview

Figure 2:

Importer/wholesaler segmentation of the fresh fruit and vegetable

sector

Hyper/supermarkets

Importer/wholesaler

Specialist fruit and veg stores

(street) markets

Figure 3: Retail Segmentation of the fresh fruit and vegetable sector

Premium /
convenience

Middle range

Low price

e.g. ready to eat,

mixed salads, sliced
fruits, organic and fair
trade, green baby
asparagus, off-season,
exotic

Class I and additional quality standards, minimally processed

for convenience, sustainability, fair-trade, organic.
These products are generally more expensive, considered
more luxurious, but also have higher marketing and
distribution costs.
Full service supermarket and specialist stores.

e.g. berries, in-season,

sugar snaps, avocado

Class I and standard retail requirements,

Consumers pay for good quality, although competition
(especially in-season) is increasing.
Supermarket and specialist stores.

e.g. common citrus,

banana, green beans,
in-season

Class I and II, low price.

Main bulk products are sold in large quantities; prices and
margins are generally quite low.
Discount supermarkets, street markets.

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CBI Market Channels and Segments Fresh Fruit and Vegetables

Retail segment: characteristics and trends

Considerations for action:
Size of the industy:

The European retail channel consists of

There are many different customers with

hyper and supermarket retail chains, smaller
different requirements. Although you
supermarket chains and independent food
probably need an importer to access the
grocers, specialist fruit and vegetables
market, you also need to know the final
stores, and street markets. Large
customer: visit potential customers and ask
supermarket chains dominate the market
for feedback.
with market shares for fruit and vegetables
of up to 85%. The market shares of
supermarkets are somewhat lower for fruit
than they are for vegetables. Specialist
stores and street markets have somewhat
higher market shares in Eastern and
Southern Europe, although large retail
chains are increasing market shares in these
locations too.

There are over 420,000 non-specialised food

Large customers require specific attention:
retail stores in the EU. Nevertheless, this
choose carefully and dont try to supply all
market segment is dominated by a relatively
at once.
small number of large retail chains with
concentrated buyer organisations. It is
estimated that there are approximately 220
larger supermarket chains in the European
market operating almost 600 different
supermarket stores (brands). Retailers like
Rewe in Germany operate different brands
and target different segments of consumers:
Billa, BIPA, Merkur, and Penny. Other
examples of large European food retailers
are Carrefour (France based
hyper/supermarket, > 100 billion euro
turnover), Metro AG (Germany, > 100 billion
euro turnover), Tesco (UK, ~100 billion euro
turnover), Schwarz Group and Aldi GMBH
(discount supermarkets, Germany), and
Koninklijke Ahold N.V. (supermarket, the
Netherlands).
Segment quality and quantity requirements:

All EU imports of fresh fruit and vegetables

have to adhere to minimum requirements on

product quality and food safety. Additionally,
the supermarkets specifically in northwest
and southern Europe demand almost
exclusively class I produce. The quality
requirements for Eastern Europe, some
discount supermarkets and street markets
may be lower. Most supermarkets demand
consumer packaging for imported produce,
including the retailer label. Country of origin
labelling is also required. Pack sizes are
usually quite small (e.g. avocados are
packed in ones or twos, green beans in 200g
portions).

Large retailers and wholesalers will check

MRLs and production facilities regularly.

GLOBALG.A.P. certification is required for
supermarket suppliers, particularly in
northwest Europe. Supermarkets will
increase supplier requirements and food
safety standards further, as EU policies are

Choose the appropriate segment that

coincides with your products quality. Ask
the importer and the final customer for
feedback and potential improvements.

Certify and apply good practices related to

food safety and logistics.

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CBI Market Channels and Segments Fresh Fruit and Vegetables

further tightened and consumers become

more aware of the quality and food safety
issues involved.
Supermarkets demand much larger
quantities than specialised stores and street
vendors. The latter are however generally
supplied by domestic wholesale. When
supplying supermarkets, exporters must be
able to deliver large quantities of uniform
product quality. To become a regular
supplier to the large retail chains, timely
delivery and cooperation with special
promotions, as well as flexibility with regard
to seasonal or growing demand are vital.
Supplying through an importing wholesaler
is generally the only way to achieve this
status. The importer/wholesaler can plan
and redistribute supplies from several
exporters to meet customer demands.

Build trust with customers. Product

uniformity and timely delivery is highly
valued.

Expected changes in the composition of the channel

Considerations for action:

Retail concentration will continue, further

The importance of the fruit and vegetable

increasing the size of supermarket buyer
section in supermarkets to attract customers
centres. It is expected that the market share
is an opportunity for DC exporters.
of street markets will decrease somewhat
further in Southern and Eastern European
countries. Simultaneously, although
specialised fruit and veg stores are losing
market share, they are servicing a specific
market for niche products, exotic or ethnic
products and specialised organic shops are
still expanding. This may be an opportunity
for exporters that supply differentiated
products in smaller volumes.
Supermarkets pay a great deal of attention

Communicate the attractiveness of your

to the fruit and vegetable category. In many
product to customers and learn what
cases it is one of the first categories that
consumers look for in different segments.
consumers encounter when entering the
shop. Supermarkets use the fresh fruit and
vegetables section to increase the overall
attractiveness of the supermarket. It is
expected that the importance of the fruit
and vegetables section will further increase.
The convenience section will also continue to
increase.

Major regional differences in the EU and EFTA market

Considerations for action:

The EU and EFTA market can roughly be
Choose your destination region and
segmented into three geographical
distribution channel carefully according to
areas with different patterns of
local taste preferences and market
consumption and buying behaviour.
structure.
Consumers in North-western Europe
have the highest average purchasing
power. The market has the highest
demand for tropical and exotic fruit and
off-season vegetables. Northwest
European consumers buy most of their

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CBI Market Channels and Segments Fresh Fruit and Vegetables

shopping in supermarkets. Fruit and

vegetables stores are slightly more
expensive than supermarkets, but carry
a more diverse range of products. The
role of supermarkets is set to further
expand. In this segment, almost all of
the produce sold is class I (highest
quality).
In southern Europe, fruits and

vegetables make up a higher share of

the diet. Consumers have a higher
preference for local traditional produce,
although local supply is not sufficient to
meet demand. The supermarket
channel is gaining importance in these
regions as well.
In Eastern Europe, product quality

requirements are somewhat lower (class

I and class II); supermarket market
share is also lower but expanding. In
the long run, market growth in Eastern
Europe, including higher quality and
sustainable produce, is expected to be
substantial. With the increase in
customer quality demands comes also
the increase in the importance of a
quality supply chain.

Niche products may be tested in specialised

stores first.

Access to growing markets in Eastern

Europe may be promising, but remember
that product requirements are also
increasing here.

This survey was compiled for CBI by LEI Wageningen UR

in collaboration with CBI sector expert Piet Schotel
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CBI Market Channels and Segments Fresh Fruit and Vegetables

Annex 1: Information boxes for the trade structure (figure 1)

Importers/wholesalers: the importing wholesale companies buy produce from
abroad and resell to domestic retailers, or re-export to other countries. They
take care of the necessary administrative formalities and often provide services
such as (re-)packaging, ripening, transportation and logistics. These importing
wholesalers provide your best access to the European markets, with an
extended network of customers, from retail buying centres, domestic
wholesalers to food service companies. Importers usually have longstanding
relationships with customers and excellent knowledge of quality requirements,
logistics and the formal administrative processes. Some wholesalers use agents
to facilitate transactions.
Sorting/washing/packing: post-harvest treatments include sorting, grading,
cleaning or washing, cutting or slicing, ripening, and packaging and labelling.
The treatments depend heavily on the type of produce and the supply chain
requirements. Usually, but not always, sorting and cleaning of fruit and
vegetables is done in the country of origin, as well as packing in wholesale
containers (boxes or crates). For some produce, such as avocados, mango and
papayas ripening is done in the destination country.
Re-packing: after importing into the EU or EFTA market, some produce needs to
be repacked in retail size packaging. Wholesalers and specialised companies
perform this task if required by the wholesalers.
Supermarkets: European supermarkets are divided into the large supermarket
chains such as Carrefour, Rewe and Ahold, and smaller independent stores. The
larger supermarkets have by far the largest market shares and operate their
own (sometimes combined) buying centres and distribution centres. Although
supermarkets may be involved in sourcing their fresh produce, they usually rely
on the services of importing wholesalers and service providers. Supermarket
service providers are wholesalers and logistics service providers who take care
of much of the sourcing and distribution process on behalf of the supermarket.
They cooperate with importers and are responsible for importing, contracting
and combining products from different countries. Directly dealing with
supermarkets requires a high degree of business professionalism as well as
access to logistics service providers and your own importing experience and
facilities. Usually DC exporters access the supermarket channels through the use
of European importers.
Specialised shops: specialised fruit and vegetable shops exist throughout the
European market, although their market share has decreased to about 10 per
cent. Most of them are familyowned, small independent shops that sell fresh
fruit and vegetables as well as some related food items. They buy primarily from
local wholesalers.
Street markets: most European cities have regular (sometimes daily) fruit and
vegetable markets. Traders rent stalls and sell fresh produce that they usually
source from local wholesalers or producers. The street markets have a
decreasing market share of only a few per cent in most countries.
Food service: the food service channel includes restaurant, hotels, business
catering and hospitals. These organisations usually procure fresh fruit and
vegetables from local wholesalers. The food service channel has an estimated
market share of about 10-15% for fruit and about 20% for vegetables.

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