CBI MARKET SURVEY: THE (ORGANIC) COFFEE, TEA AND COCOA MARKET IN THE NETHERLANDS
CBI MARKET SURVEY
THE (ORGANIC) COFFEE, TEA AND COCOA MARKET IN THE NETHERLANDS Publication date: May 2007
Report summary This CBI market survey discusses, amongst others, the following highlights for the (organic) coffee, tea and cocoa market in The Netherlands: • The Netherlands is a fairly big coffee consumer and, although recent developments have not been positive, in the future renewed growth is expected. • Tea consumption is relatively more limited and has a less favourable outlook, but does show an interesting shift towards herbal, fruit and green tea. • The Netherlands is the largest grinder in the world, and grindings are increasing by 3% annually. • The Netherlands is an important market for developing country producers of coffee as well as tea. The country occupies an important position in EU trade of coffee and to a lesser extent, for tea (imports as well as re-exports). Developing countries account for a considerable share of imports, especially for coffee. • As the principal entry point and processing location for cocoa beans from developing countries, and an important entry point for cocoa powder and paste, The Netherlands is among the most interesting countries for developing country producers. Imports are increasing, and the proportion of imports coming from developing countries is significantly above the EU average.
This survey provides exporters of (organic) coffee, tea and cocoa with sector-specific market information related to gaining access to The Netherlands. By focusing on a specific country, this survey provides additional information, complementary to the more general information and data provided in the CBI market survey ‘The (organic) coffee, tea and cocoa market in the EU’, which covers the EU market in general. That survey also contains an overview and explanation of the selected products dealt with, some general remarks on the statistics used as well as information on other available documents for this sector. It can be downloaded from http://www.cbi.eu/marketinfo.
1. Market description: consumption and production
Due to the interesting perspectives offered to developing country exporters in organic and other certified markets for coffee, tea and cocoa, these are given a particular focus in this survey. These markets grow faster, offer a premium, and traded volumes are smaller than in the conventional market.
Moreover, whereas coffee and tea consumption is referred to simply as consumption, where cocoa is concerned it is referred to as industrial demand. Coffee and tea processors produce consumer products, while cocoa grinders produce ingredients for chocolate manufactures and food processors. Data on final consumption of coffee and tea by EU citizens is available, while data on processing is not. In contrast, consumption of cocoa is unknown, due to the fact that cocoa products are processed in a large range of products. However, EU grindings, combined with the imports of processed cocoa products, offer a good indication of industrial demand.
Consumption
Coffee • The Netherlands is a fairly big coffee consumer, with a 4.0% EU market share (ICO, 2006). • Total coffee consumption in The Netherlands was erratic between 2001 and 2005, with an average annual decline of 4.3% amounting to 1.6 million bags in 2005.
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• More recently there is increasing demand for coffee for coffee pod systems, which is extremely popular in The Netherlands. Traditionally, filter coffee used to be most common in The Netherlands. Also, the demand for premium coffee is developing well. Due to higher prices for these systems, value sales at the retail level are showing a positive development. • Per capita consumption has been decreasing since 2003 and shows an average annual decrease of 4.8% between 2001 and 2005, amounting to 5.4 kg in 2005.
Tea • The Netherlands is a quite big tea consumer, with an EU market share of 3.2% (ITC, 2006) • Total Netherlands tea consumption is growing slightly. The annual average increase was 0.6% between 2001 and 2005, amounting to 7.5 thousand tonnes in 2005. • Per capita consumption of tea shows a slight increase between 2001 and 2005, amounting to 0.5 kg in 2005. • Pure black tea still holds a large market share of about 70% but has been declining in favour of the consumption of fruit and herbal ‘teas’. Herbal teas are becoming a part of the mainstream tea market, and many different kinds are sold at supermarkets. Furthermore increasing quantities of rooibos and, to a lesser extent green tea are consumed (NVTK: 2004). Consumers in The Netherlands are also increasingly consuming more expensive teas instead of the conventional black teas; this is increasing average unit prices at the retail level (Euromonitor, 2006). • An increasingly important segment is the consumption of iced tea. According to the Dutch Soft Drinks Association (NFI), the consumption of iced tea in The Netherlands increased from 106.6 million litres in 2003 to 121.6 million litres in 2005, representing a share of 8% of total soft drinks consumption.
Cocoa • The Netherlands is the biggest industrial user of cocoa beans in the EU, with an EU market share of 35.0% (Icco, 2006). • Total cocoa beans grindings show an annual average increase of 3.0%, amounting to 470 thousand tonnes in 2005/2006. • Per capita consumption of chocolate confectionery in The Netherlands is medium to small at 4.5 kg in 2004 (Coabisco, 2007).
Organic and Fair trade • The organic market in The Netherlands is relatively limited in size, with annual per capita consumption of organic food products under € 30. In 2005, the total organic food market amounted to around € 400 million, or 1.8% of the total food market. However, general expectations on further developments are favourable and 2006 showed considerable growth (FiBL, 2007). • Max-Havelaar-labelled tea held a market share of 0.45% in 2003 (Max Havelaar Foundation: 2005). Between 2001 and 2003, Max Havelaar saw its share decreasing by 23% due to a declining consumption by individual consumers. This can be explained by fierce competition on the tea market and the related weak loyalty to tea brands. Large scale consumers, however, have been showing increasing interest in Max Havelaar tea (ProFound, 2006). • The Netherlands is one of the leading EU market for Fair-Trade-certified coffee, with volume sales amounting to 2,860 tonnes in 2005 (Fair-Trade, 2005).
Market segmentation • Market segmentation of coffee, tea and cocoa in The Netherlands does not differ from overall EU segmentation. For more information, please refer to the CBI survey covering the coffee, tea and cocoa market in the EU.
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Production • Because of climatic conditions, no production of coffee, tea and cocoa beans takes place within the EU. The Netherlands is fully dependent on imports of these products from other countries. • The Netherlands is, however, the EU’s principal grinder of cocoa beans imported from developing countries. These companies are mentioned under Section 3. Tea and coffee processing predominately takes place in the EU, and The Netherlands itself has several major players.
Trends • ‘The single portion revolution is a change which is already underway, but is picking up speed, and will be with us for the next years. This applies to instant coffee, as well as filter and espresso. • In the instant market, there is an increasing variety of single-portion instant coffee sachets, including recipes such as Viennese coffee, Cappuccino and Latte Macchiato. • For the filter market, the coffee pods for machines like the Senseo and others are really taking off, particularly in Northwest Europe. • The outlook for coffee and tea remains somewhat favourable, with coffee consumption also increasing in volume terms, but also a further shift to premium specialty coffees, as consumers become increasingly choosy about coffee. • Consumption of tea will show a further shift herbal and green tea.
Opportunities and threats • Ready-to-drink tea, like iced tea, are increasingly popular on the Netherlands market. Products like these, however, are not likely to be supplied by developing country exporters, since most production is done in the EU itself. • Opportunities for developing country exporters of tea, however, do exist in the supply of herbal, fruit and green tea, as consumption of these teas is growing. • The Netherlands is the leading EU grinder of cocoa beans. These cocoa beans come from developing countries, which makes The Netherlands a interesting market for exporters in these countries. • Particularly niche markets like organic and Fair-Trade are an interesting segment on the Netherlands market.
Useful sources • Association of Dutch Coffee Roasters and Tea Packers (Vereniging van Nederlandse Koffiebranders en Theepakkers (VNKT)) at http://www.vnkt.nl • International Trade Centre’s coffee guide http://www.thecoffeeguide.org • International Coffee Organization’s Coffee Market Reports, online available at http://www.ico.org/show_doc_category.asp?id=2 • International Tea Committee's Annual Bulletin of Statistics 2006, which can be purchased at http://www.inttea.com/publications.asp • An interesting source for information on cocoa is http://r0.unctad.org/infocomm/anglais/cocoa/sitemap.htm • International Cocoa Organization at http://www.icco.org • Fairtrade Labelling Organizations International coffee, tea and cocoa information at http://www.fairtrade.net/coffee.html or tea.html or cocoa.html • Furthermore, national associations, mentioned under Section 6, also offer valuable information. Æ For more useful sources on consumption and production of coffee, tea and cocoa, please refer to the EU survey, Chapters 4 and 5.
2. Trade: imports and exports
Imports
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Table 2.1 Imports by The Netherlands and leading suppliers to The Netherlands, 2001 - 2005, share in % of value Product 2001 2003 2005 Leading suppliers in 2005 Share € mln € mln € mln Share in % (%) Intra-EU: Germany (14.4), Belgium (10.1), Italy (1.9) 28.1 Extra-EU ex. DC: Switzerland (1.5) 1.8 Coffee 285 270 313 DC*: Brazil (18.5), Peru (8.1), Colombia (6.6), Uganda 70.1 (6.0), Honduras (4.8), Vietnam (4.7), Guatemala (4.0) Intra-EU: Belgium (4.2) 5.2 Extra-EU ex. DC: - 0.3 Unroasted 206 177 231 DC*: Brazil (25.0), Peru (11.0), Colombia (8.9), 94.5 coffee Uganda (8.2), Honduras (6.6), Vietnam 6.3), Guatemala (5.5) Intra-EU: Germany (54.9), Belgium (6.9), Italy (7.3), 93.1 Luxembourg (2.4) Roasted coffee 79 92 81 Extra-EU ex. DC: Switzerland (5.9) 6.1 DC*: China (0.6) 0.8 Intra-EU: Germany (22.4), Belgium (5.3), Hungary 32.0 (2.5), United Kingdom (1.3) Tea 60 52 59 Extra-EU ex. DC: Switzerland (1.2), Japan (1.0), 2.8 DC*: India (13.0), Sri Lanka (11.5), Indonesia (10.4), 65.2 China (7.5), Malawi (5.7), Zimbabwe (5.5) Intra-EU: Germany (22.8), Belgium (5.6), Hungary 32.8 (2.8) Black tea 48 46 52 Extra-EU ex. DC: Switzerland (1.3) 2.0 DC*: India (13.2), Sri Lanka (12.2), Indonesia (11.1), 65.2 Malawi (6.4), Zimbabwe (6.2) Intra-EU: Germany (18.7), Belgium (3.1), France (2.0) 26.0 Extra-EU ex. DC: Japan (7.7) 9.3 Green tea 12 6 7 DC*: China (35.0), India (11.8), Sri Lanka (6.3), 64.7 Indonesia (5.2), Turkey (2.6) Intra-EU: - 0.1 Extra-EU ex. DC: - 0.0 Cocoa beans 633 1,045 817 DC*: Côte d’Ivoire (33.8), Ghana (24.8), Nigeria 99.9 (17.9), Cameroon (17.1), Togo (3.1) Intra-EU: United Kingdom (0.4), Belgium (0.4) 1.4 Extra-EU ex. DC: 0.0 Cocoa paste 72 90 86 DC*: Côte d’Ivoire (85.6), Ghana (5.8), Indonesia 98.6 (3.6), Dominican Republic (1.1), Nigeria (0.7) Intra-EU: United Kingdom (56.0), Spain (8.6), 71.7 Germany (4.3), France (1.9), Belgium (0.6) Cocoa 26 89 59 Extra-EU ex. DC: 0.1 powder DC*: Côte d’Ivoire (19.9), Brazil (6.1), Malaysia (0.9), 28.2 Turkey (0.5), Indonesia (0.5) Source: Eurostat (2004) *Developing Countries
The Netherlands is the sixth largest EU importer of coffee, accounting for 5.1% of EU coffee imports. Total coffee imports increased by 2.3 % in value annually, amounting to € 313 million / 157 thousand tonnes.
Between 2001 and 2005, imports from developing countries increased by 3% annually. In 2005, they had a share of 70.1% in total imports, amounting to € 219 million / 130 thousand tonnes. This share equals the EU average. The leading developing country supplier is Brazil, with 19% of total imports and an annual increase of 3%. Peru strongly increased its supply of coffee to The Netherlands by 22% annually between 2001 and 2005, now being the second largest developing country supplier, with a market share of 8.1%. Belgium strongly increased its supply of roasted coffee to The Netherlands by 21% annually between 2001 and 2005. Belgium is now, after Germany, the second largest supplier of roasted coffee, with a market share of 6.9%
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Organic According to ICO, The Netherlands was the third largest importer of organic coffee in 2005 after Germany, and Belgium and Luxembourg, with imports amounting to 742 tonnes. Therefore, The Netherlands can be considered as a medium-sized importer of organic coffee. In 2005, the leading developing country supplier of organic coffee was Ethiopia, accounting for 64% of import volume, followed by Mexico (18%).
Tea The Netherlands is the fourth largest importer of tea, with an EU market share of 8.3%. Imports stayed mostly unchanged between 2001 and 2005, totalling € 59 million / 33 thousand tonnes. Imports of black tea increased by 2% annually. However, imports of green tea decrease substantially, which is in contrast to most EU countries, totalling € 4.0 million in 2005, or 6.0% of the EU total.
Developing countries have a market share of 65.2%, which equals the EU average. Their import share remained unchanged in the period revised. The four main tea suppliers are Germany, India, Sri Lanka and Indonesia. Of these, only Germany and India expanded their import market share.
Cocoa The Netherlands is the largest EU importer of cocoa beans, and the second largest importer of cocoa paste and powder, both behind France. The development of imports has been positive for all three product groups. However, as in other EU countries, imports in value peaked in 2003, due to high prices paid for cocoa products, and decreased between 2003 and 2005 as prices decreased again. Import volumes continued to increase throughout the period.
Between 2001 and 2005, imports of cocoa beans increased by 7% annually in value and by 3% in volume, amounting to € 817 million / 638 thousand tonnes. In 2003, imports reached more that € 1 billion for the first time demonstrating the importance of the Netherlands as a processing country for cocoa products. Since it is the principal entry-point and re-exporter of cocoa beans into the EU, it is logical that the share of developing countries in total supply is very high compared to other EU countries. Among developing countries especially Ghana (+31% annually between 2001 and 2005) and Togo (+126%) saw their exports to The Netherlands increase rapidly. Nigeria and Cameroon show more limited growth, while Côte d’Ivoire saw its exports to The Netherlands decrease by 6% annually.
The Netherlands is also an important entry-point for cocoa paste from developing countries, which account for a very high proportion of cocoa paste imported. Imports of cocoa paste increased by 5% in value annually, but volume growth lagged behind significantly. In 2005, imports amounted € 86 million / 55 thousand tonnes. Although several other suppliers such as Ghana and Indonesia show higher growth rates, Côte d’Ivoire is still by far the principal supplier. Imports of cocoa powder showed the highest growth. While imports in value increased by 23%, imports in volume increased by 17% amounting to € 58 million / 34 thousand tonnes. Although the share of developing countries is relatively high compared to other EU countries, this share decreased significantly from 60% in 2001 to 28% in 2005. This is mainly due to the rapidly increasing imports from the United Kingdom and Spain, while imports from developing countries remained more or less stable.
Exports
Coffee The Netherlands is also the sixth largest exporter of coffee in the EU, although the country only accounts for 4.0% of EU coffee exports. This is characteristic for EU coffee export, as exports are strongly dominated by Germany, Italy and Belgium together. Exports by The Netherlands increased by 33% annually between 2001 and 2005, totalling € 92 million / 26 thousand tonnes. The main export destinations are Switzerland, Belgium and the UK.
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Tea The Netherlands is also the fourth largest tea exporter, accounting for 7% of EU tea exports. Exports increased by 5.2 % annually between 2001 and 2005, totalling € 32 million / 16 tonnes. The Netherlands occupies relatively a more important position in black tea exports. More than one third of total tea exports is destined for Germany solely. Switzerland and Poland are also important export destinations. Exports to Poland increased by 178% annually between 2001 and 2005, totalling € 3.4 million / 4.4 thousand tonnes.
Cocoa The Netherlands is the principal entry point of cocoa beans into the European Union and apart from its large processing industry, also re-exports large quantities of cocoa beans to other EU countries. However, Belgium is also of increasing importance as a re-exporter of cocoa beans. Between 2001 and 2005, exports increased by 11% annually, amounting to € 197.5 million / 155 thousand tonnes. The Netherlands accounts for 48% of EU exports of cocoa beans, which are mainly exported to other EU countries. The Netherlands is also the largest exporter of cocoa paste and is increasing its predominance, now accounting for 60% of total EU exports. This is mainly due to its large processing industry but, considering the high imports of the product group, it is also likely that a part concerns re-exports. Exports increased by 15.3% in value annually, amounting to € 191 million / 101 thousand tonnes. The Netherlands is also the largest exporter of cocoa powder, accounting for 64% of total EU exports. This is also mainly attributed to local cocoa processing capacity, but could also partly concern re-exports. Between 2001 and 2005, exports increased by 6% annually in value terms, amounting to € 334 million / 209 thousand tonnes. Exports are mainly oriented towards other EU countries, East European countries and the USA (especially in the case of powder).
Opportunities and threats The Netherlands is an important market for developing country producers of coffee as well as tea. Domestic consumption of, and demand for, both products is fairy substantial. The country occupies an important position in EU trade of coffee and tea ( imports as well as re-exports) and developing countries account for a considerable share of imports, thereby equalling EU average.
As the principal entry point for cocoa beans from developing countries and an important entry point for cocoa powder and paste, The Netherlands is among the most interesting countries for developing country producers. Moreover, the country also has the most important processing industry in the European Union. Imports are increasing, and the proportion of imports coming from developing countries is significantly above the EU average. The Netherlands is also an important entry point for organic products, with several major organic traders located in the country.
Useful sources • EU Expanding Exports Helpdesk - http://export-help.cec.eu.int/ Go to: trade statistics. • Eurostat – official statistical office of the EU - http://epp.eurostat.cec.eu.int Go to: ‘themes’ on the left side of the home page - ‘external trade’ - ‘data – full view’ - ‘external trade - detailed data’. • International Coffee Report: http://www.agra-net.com • World Tea Markets: http://www.agra-net.com • Chocolate & Confectionery International: http://www.agra-net.com
3. Trade structure
Conventional The three product groups discussed are each distributed in a different manner. The trade structures for coffee and tea share important characteristics, but also differ in, for example, the role of warehouses and auctions. Particularly the cocoa trade, with its three main products of cocoa beans, paste and powder and its industrial focus, has an entirely different trade
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Page 6 of 14 CBI MARKET SURVEY: THE (ORGANIC) COFFEE, TEA AND COCOA MARKET IN THE NETHERLANDS structure. Some initial processing takes place for coffee, tea and cocoa, before being exported to the EU, but local processing of cocoa is becoming more common. However, this is often conducted by international processors such as ADM and Cargill. For more information, please refer to the CBI survey covering the EU market for coffee, tea and cocoa.
Brokers and agents • Brokers and agents play an important role in all three commodity chains, but especially for tea since they are prime actors at tea auctions. Large multiple commodity brokers, as well as smaller specialised companies are active in these markets. Agents representing importing companies in developing countries can play an important role. • The auction trade is specific for tea and a considerable part is still traded through the main auction centres. These auctions are dominated by a very limited number of brokers and are difficult for outside parties to enter. More and more tea is traded outside the auction systems, especially by new entrants into the tea trade.
Traders • Traders play a very important role for all three product groups. This level of the trade structure offers good, if not the best, opportunities for market entry for all three product groups. However, for all three product groups trade is increasingly concentrated in a limited number of trading companies. Prospects remain for smaller specialised traders which trade in non-conventional products (high quality, specific origin), which might be interesting for developing country producers. • Apart from traders, coffee roasters also play a considerable role as traders themselves. Coffee traders operate from ports where coffee is delivered, such as Rotterdam in The Netherlands. Therefore, the Netherlands has several important traders. • Vertical integration between tea blenders and traders is considerable. The Netherlands plays a considerable role in the tea trade. Van Rees, one of the main international trading companies is located in the country, but The Netherlands also has several smaller trading companies. • The largest cocoa processors also have their own import departments, but trading companies play a very large role in processor sourcing practices. Many traders are located in The Netherlands and include Theobroma, Huyser Moller & Co., Daarnhouwer, Eurobras Trading, Bensdorp (part of Unilever) and Unicom (part of Amajaro), both supplying local processors as well as trading cocoa products across the EU.
Storage companies • Storage companies play a role in the cocoa trade, where they perform additional functions, such as grading. Important ones are mostly located in the principal entry-point locations for the different products, such as Amsterdam.
Processing • The level of concentration in processing (roasting of coffee, blending of tea, and grinding of cocoa) industries is also very large. • Roasting of the original green coffee usually takes place in consumption countries. In the EU, this often concerns multinationals supplying several EU countries from their production facilities. The level of concentration in the roasting sector is very different per country, and is, with almost 80% for the top 5 roasters, rather average in The Netherlands. Even though many roasters disappeared, The Netherlands, like other EU countries, still has national roasters producing under own brands or private labels. Moreover, de Drie Mollen, the EU’s largest private label producer, is in The Netherlands. • Although less concentrated than the coffee trade, tea processing is strongly concentrated on a regional level. The top three firms usually hold more than half of the local market, with players either multinationals such as Unilever or national players, as well as niche and specialty players. Local players in The Netherlands include C Steinweg, and de Drie Mollen. • Cocoa processing companies can be divided into the grinding industry, producing cocoa paste, butter, and powder and secondly, secondary processing companies active in further processing of cocoa butter. The grinding industry is also concentrated with several
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multinationals dominating the market. The Netherlands, as the principal player on the cocoa market in Europe and also worldwide, contains some of the top players in the business, among which Gerkens (owned by Cargill), ADM, and Dutch Cocoa.
Final users • The next step for the coffee and tea trade is final sales by retailers and caterers. In most countries the retail sales generally account for 70-80% of the market. Because of increasing retail concentration and buying power of retailers in the EU, and increasing private label sales, the coffee and tea industry are becoming further concentrated. • The highly concentrated end-industries use processed cocoa products in chocolate, cocoa confectionery, beverages, and cosmetics (cocoa butter). Direct trade with these players will be difficult. • Consumers buy chocolate or cocoa beverages and confectionery directly through supermarkets and/or specialty chocolate shops, but these products are also consumed through the catering and institutional sector.
Organic • Importers of organic coffee, tea and cocoa are often not specialized in these products, but in organic products in general, and they are mostly dedicated to conventional (e.g. not specialty) products. Trading houses of coffee, tea and cocoa, play a more limited role in the trade in organic products, but with further organic market development this situation is changing. Most traders are still located in The Netherlands (Tradin, Do-It, Doens) and Germany, and form the most important trade channel for organic producers in developing countries. • In Europe, certified coffee, tea and cocoa (i.e., organic, Fair-Trade, Utz Kapeh, Rainforest Alliance, etc.), is sold primarily through traditional channels (either mainstream retailers or organic retailers, but not specialty coffee and tea stores). Supermarkets are an increasingly important sales channel, especially for coffee. In 2006, supermarkets accounted for just over 40% of the market. Major retail chains in The Netherlands offer private label organic and Fair-Trade products, or sell under Fair-Trade brands. The market leader in organic products is Albert Heijn. Concerning tea, the focus is more on Fair-Trade (or fair trade- organic combinations) and the market for certified tea is more limited in scope in The Netherlands. Furthermore, there are also organic food supermarkets and stores which sell organic coffee, tea and chocolate. In The Netherlands, this channel is still important. • Supermarkets hire the services of large-sized (not mega-) roasters, blenders and chocolate/ food product producers. Cocoa processors will usually be involved on request of chocolate manufactures working under private or Fair Trade label, or are part of integrated chocolate companies with organic lines. Certain up-market tea and coffee processors also have their own organic brands.
Trends Trends in trade structure have been described in the overall trade structure above, but the most important trends are: • Continued concentration tendencies in the trade and processing of coffee, tea and cocoa. • Due to increasing interest in organic and premium and single-origin products, there are also still, and perhaps even increasing, numbers of small processors on the EU market. • Increasing sales and good expectations for organic and Fair-Trade coffee, tea and chocolate and cocoa products, and especially increasing sales through supermarkets, have made the organic market increasingly interesting for conventional players. Their entrance in the market will have a profound influence in this niche.
Useful sources
Coffee • Douwe Egberts Nederland B.V, roaster, market leader in The Netherlands’ coffee market: http://www.de.nl
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• Algra Mocca D'Or Breda B.V., roaster of premium, organic and Fair-Trade coffee, tea blender also organic and fair trade: http://www.moccador.com/index.nl.html • Cook & Boon Koffie, roaster supplying the Benelux market: http://www.cookboon.com • De Drie Mollen” BV, coffee roaster and tea trader, largest European private label coffee roaster : http://www.driemollen.com • Smit & Dorlas koffiebranders BV, roaster: http://www.smitdorlas.nl • Neuteboom, Fair-Trade and supplier of organic coffee and tea: http://www.neuteboom.nl
Tea • L. Elink Schuurman Tea BV, broker: Mailto:[email protected] • Broektea Rotterdam BV, importer/exporters: http://www.broektea.com/ • C Steinweg - Handelsveem BV, blender/packer: http://www.steinweg.com • Van Rees BV, importers/exporters: http://www.vanrees.com
Cocoa • Theobrama, trader in cocoa butter (company’s core business) and cocoa beans, -cake, - powder and green coffee: http://www.theobroma.nl/index.html • Daarnhouwer & Co B.V, commodity trader in, amongst others, cocoa and green coffee. Since 1996 part of Amtrada Holding BV in Amsterdam. Group of companies engaged in the worldwide procurement, trade and distribution of raw materials, ingredients and capital goods: http://www.daarnhouwer.nl. • Cargill BV, cocoa processor and leading trader in agricultural commodities including cocoa, http://www.cargill.nl in The Netherlands owner of Gerkens cocoa http://www.gerkenscacao.com/ • ADM, owner of “De Zaan”, a principal brand name in the cocoa world: http://www.admworld.com • Jan Schoemaker B.V., a cocoa butter producer: http://www.janschoemaker.com • Dutch Cocoa, producer of cocoa liquors, cocoa butters and powders. The company is part of Ecom, a leading international company involved in the production and trade of agricultural commodities: http://www.dutchcocoa.com
Organic • Tradin, one of the EU’s largest organics trading houses: http://www.tradinorganic.com/ • Do-It: http://www.organic.nl/index.html • Doens: http://www.doensfood.com/
On-line company databases for finding companies working in the coffee, tea and cocoa markets are: • Vereniging van Nederlandse Koffiebranders en Theepakkers / The Netherlands Association of Coffee Roasters and Tea Packers: http://www.vnkt.nl • Koninklijke Nederlandse Vereniging voor de Koffiehandel / Royal Netherlands Coffee Trade Association: tel: +31 (0)205113880 • Nederlandse Vereniging van Thee- Importeurs en Thee Exporteurs: http://www.koffiethee.nl • Vereniging voor de Bakkerij- en Zoetwarenindustrie / Dutch Bisquit, Chocolate and Confectionery Association (VBZ): http://www.vbz.nl • Association of organic production and trading companies / Vereniging van Biologische Productie- en handelsbedrijven (VBP): http://www.vbpbiologisch.nl/ • Food world: http://www.thefoodworld.com (an extensive online food business directory, with full EU coverage. Coffee, tea and cocoa are a separate product group.) • Europages: http://www.europages.com (online business directory, with full EU coverage. Cocoa and chocolate, and coffee and tea are two separate product groups)
Business-to-business sources include the following; • Agronetwork.com: http://www.agronetwork.com/global (coffee and tea are included under food)
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• Organic Trade Services: http://www.organicts.com (also offering organic industry news. Cocoa products are included under food of the company database, coffee and tea under drinks) • IngridNet: http://www.ingridnet.com (a marketing instrument for companies supplying ingredients to, among others, food industries. Cocoa and cocoa products, and tea and coffee products are two separate product groups)
4. Prices and margins
As the prices for coffee, tea and cocoa are world market prices, prices in The Netherlands should show limited deviation from those prices (except in case of transport costs for example). The Netherlands is the most important entry point for cocoa beans into the EU, and this could be a significant reason for the very low import prices in the country, with prices reflecting cocoa world market prices. Moreover, huge quantities of lower priced conventional cocoa beans arrive in The Netherlands for processing and transport to other EU countries. The Netherlands is also an important trading country for coffee importing directly from developing countries, with accompanying low prices. Import prices for tea are also comparatively low.
Regarding actual prices of coffee, tea and cocoa (products), prices provided in the market survey covering the EU should be used as a reference point only. Prices for coffee, tea and cocoa are to a large degree dependent on origin, and buyer preferences regarding quality, order size etc. Therefore, actual prices are dependent on negotiation with partner companies, and expressed as differentials of future market prices in the case of coffee, or are dependent on developments at the auction level for tea. Due to specific preferences in the kind of products consumed, average import prices for especially tea will deviate between countries, as these products differ in price.
In general, exporters need to have detailed production costs/volume price breaks for the products that they supply. This will give them an important reference point for any negotiations with buyers.
On the global market, there has been an overall increase in world coffee prices from their lows in 2004. Prices of coffee remain volatile, but reasonable prices are expected to continue. Premiums for organic coffee in the EU are between 15% and 25%, but are decreasing as conventional roasters and retailers enter the organic market. A premium for Fair-Trade certified coffee is paid above guaranteed minimum prices for conventional and organic coffee. For premiums of other certification schemes, please refer to the survey covering the EU. Retail prices for coffee in The Netherlands are at an average to low level compared to other EU countries. In 2005, the average price per kilo of coffee amounted to € 6.65 (ICO, 2006).
Tea supply exceeds demand, and real prices have been declining since the 1980’s. Tea prices show a wide variation due to large differences in quality. Prices remain under pressure from over-supply. The price for organic tea strictly follows the market rules, but is very volatile. Due to increasing conversion of tea production to organic standards, prices have decreased substantially. Fair-Trade offers a differentiated premium depending on the type of tea.
World market prices for cocoa beans are readily available, as are prices for cocoa butter. Prices for other cocoa products such as powder, liquor and paste are more difficult to encounter. Prices for cocoa beans are volatile, but more stable compared to previous periods. Monthly prices now range between € 1,200 and € 1,400 per tonne. ICCO is expecting an annual increase in real prices of 2.2%. In 2007 more limited supply could push op prices. Organic prices fluctuate, but current premiums are high at around € 400 (25%). Fair-Trade offers an additional premium of € 120 above minimum prices.
Sources • Important sources for price information are firstly the international commodity organisations: the International Coffee Organisation (http://www.ico.org), the International
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Tea Committee (http://www.inttea.com), and the International Cocoa Organisation (http://www.icco.org). • Furthermore, publications such as Public Ledger, International Coffee Report, and World Tea Markets Monthly (http://www.agra-net.com) are of importance. • Lastly, the future markets LIFFE (http://www.liffecommodities.com) and New York Board of Trade (NYBT) (http://www.csce.com/) provide real-time future quotes.
5. Market access requirements
As a manufacturer in a developing country preparing to access The Netherlands, you should be aware of the market access requirements of your trading partners and the government of The Netherlands. Requirements are demanded through legislation and through labels, codes and management systems. These requirements are based on environmental, consumer health and safety and social concerns.
Legislative requirements National legislation in EU countries is compulsory for all products traded within the country concerned. Therefore, as an exporter in a developing country you have to comply with the legislative requirements which are applicable to your products. For information on legislation go to ‘Search CBI database’ at http://www.cbi.eu/marketinfo, select your market sector, and the EU country of your interest in the category search, click on the search button and click on legislative requirements for an overview of all documents on legislation in your country of interest.
Non-legislative requirements Social, environmental and quality-related market requirements are of growing importance in international trade and are often requested by European buyers through labels, codes of conduct and management systems. For information on non-legislative requirements, go to ‘Search CBI database’ at http://www.cbi.eu/marketinfo, select your market sector and the EU country of your interest in the category search, click on the search button and click on your subject of interest under non-legislative requirements for an overview of all documents on the subject concerned in your country of interest.
Packaging, marking and labelling For general information on packaging, refer to the survey covering the EU. You can download information on requirements on packaging, marking and labelling in specific EU markets from http://www.cbi.eu/marketinfo.
Tariffs and quota For information on import tariffs, please refer to the survey covering the EU. The general VAT rate in The Netherlands is 19% as of February 2006. Foodstuffs such as coffee, tea and cocoa fall under a reduced VAT rate of 6%.
Useful sources • CBI Database http://www.cbi.eu/marketinfo • Taric Homepage http://europa.eu.int/comm/taxation_customs/dds/en/tarhome.htm • Directorate General http://europa.eu.int/comm/taxation_customs/common/publications/in XXI fo_docs/taxation/index_en.htm
6. Business practices
For general information on business practices exporters should refer to the CBI document ‘From survey to success: guidelines for exporting (organic) coffee, tea and cocoa to the EU’, CBI’s Export Planner and CBI’s Image Builder manual.
Source: CBI Market Information Database • URL: www.cbi.eu • Contact: [email protected] • www.cbi.eu/disclaimer
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Selecting a suitable trading partner Finding a trade partner in The Netherlands should not deviate from the general EU method. Due to its important trading role, especially in cocoa, but to a lesser extent also in tea and coffee, all relevant trade channels are present in The Netherlands, including traders, processing industries and a very large manufacturing sector using cocoa. Buyers and suppliers often find each other at trade fairs. The BioFach trade fair is of particular importance for organic coffee, tea and cocoa, whereas Anuga, SIAL, FI Europe are of principal importance for conventional products. Moreover, for coffee and tea, the Tea and Coffee World Cup in Geneva is of importance. Participating or visiting trade fairs is also important for price benchmarking, and making necessary product adaptations. Establishing contact through trade directories, or through directly contacting interesting companies you encounter, can also be useful. Concerning conventional products, company visits and sending samples, including elaborate technical data, are indicated as a method appreciated by importers. If positive responses are obtained, these efforts can be followed by country visit invitations. Brokers also fulfil an important function in market linking, while websites offer another opportunity to find trade partners. The first step after finding a trade partner, which is often requested by the buyer, is to give a quotation and sometimes packaging details.
After obtaining contacts, evaluating potential trade partners should be done according to criteria such as information quality, the kind of trade relation the partner is interested in, the position of the partner and his financial status and credibility.
Reaching an agreement with your trade partner As in the rest of Europe, both general and specific offers are common in The Netherlands. Therefore, common practices as detailed in the above-mentioned CBI documents apply. When establishing an overseas price for your products, factors involved are competition, costs such as production, packaging, transportation and handling, promotion and selling expenses, the demand for your product or service and the maximum price which the market is willing to pay regarding origin, quality and order size. How you price your product is worth a good deal of thought and effort since it directly affects your ability to make a profit.
The most commonly used terms of payment in the coffee, tea and cocoa trade are the Letter of Credit (L/C) and Cash Against Documents (CAD). When using L/C, risks are divided between buyer and supplier. The supplier only receives payment after the goods are consigned to a carrier and the buyer only receives the goods after payment. CAD carries the greatest risk for the exporter as the exporter will only receive payment when the buyer picks- up the goods. In case of co-operation agreements with overseas companies, payment terms could also include periodical payments. Once trading relationships are established, clean payments are often used.
Export terms of sale determine which costs are covered in the price of the cargo, at which point ownership transfers to the buyer and at which point responsibility for the cargo is transferred. The most commonly used terms of sale are FOB (Free on Board), and less often CFR (Cost and Freight) and CIF (Cost, Insurance, Freight). While coffee is generally sold FOB, some roasters prefer an ex-dock basis, and small roasters prefer to buy small lots on a delivered-in-store or ex-store basis. However, supplier and importer are free to negotiate and agree whether quotations and subsequent trade are based on CIF or FOB prices. Special attention should also be given to contract fulfilment in reference to contingencies which might occur while the sale order is being processed, shipped etc. Coffee trade is usually conducted according to European Coffee Federation contracts. Likewise, for cocoa standard practices have been set out by the main international cocoa trade associations, which in the EU is the Federation of Cocoa Commerce Ltd (FCC).
Cultural differences A profound knowledge of The Netherlands’ business culture is one of the main keys to a dur able relationship. In spite of all modern communication tools, the personal relationship with a trading partner often decides a durable co-operation. The general business culture of people in The Netherlands is described below:
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• They are rather informal and are quick to use first names. • They treat their counterparts as equal and are friendly in their communication. • They are direct in their approach and they prefer short, clear lines of communication. • Often they do not have a secretary to bring coffee; instead they ask you to accompany them to the coffee machine somewhere in the corridor; coffee is offered throughout the day. • Netherlands trading partners expect you to take the initiative in the conversation such as “What do you have to show or tell me?” They like to ask questions and take a proactive attitude. • Netherlands counterparts are often empowered by their organisation to make decisions, thus negating the need to refer to their bosses; responsibilities are often delegated to purchasers. • They are very task-oriented and do not like extensive social talk; they like to come straight to the point; being very price-conscious, Netherlands importers will be quick to ask the price. • Showing off is frowned upon. ‘Act normal’ is their way of doing business. • Netherlands purchasers like to work with strict deadlines.
Internet provides many sources on business practices and culture, such as http://www.cba.uni.edu/buscomm/InternationalBusComm/world/europe/netherlands/netherlan ds.html and http://www.kwintessential.co.uk/resources/global-etiquette/netherlands.html. Please keep in mind that the above concerns general remarks. Therefore, when conducting business, use you intuition and an understanding attitude.
Sales promotion Common practices of trade promotion in The Netherlands should not differ considerably from other European countries. However, please keep in mind that the trade of conventional cocoa and cocoa products, tea and coffee are extremely concentrated, with different companies dominating the different product groups across and within national markets. Most inhabitants of The Netherlands speak English (and sometimes French, German and Spanish), especially when they are in the trade business. In general, good care should be taken of existing contacts, by using prompt, constant and reliable communication. Letters of inquiry should always be replied to. An essential tool used in sales is a detailed and up-to-date customer database.
Please refer to CBI’s Export planner and Your image builder for more information on this subject.
Assistance with market entry can also be sought through local business support organisations, import promotion organisations such as CBI and branch organisations focussing on coffee, tea and cocoa, or the (organic) food sector. Interesting trade associations in The Netherlands are: • Federatie Nederlandse Levensmiddelen Industrie (FNLI) / The Netherlands Federation of Foodstuff Industries: http://www.fnli.nl • Vereniging van Nederlandse Koffiebranders en Theepakkers / The Netherlands Association of Coffee Roasters and Tea Packers: http://www.vnkt.nl • Koninklijke Nederlandse Vereniging voor de Koffiehandel / Royal Netherlands Coffee Trade Association: tel: +31 (0)205113880 • Nederlandse Vereniging van Thee- Importeurs en Thee Exporteurs: http://www.koffiethee.nl • Vereniging voor de Bakkerij- en Zoetwarenindustrie / Dutch Bisquit, Chocolate and Confectionery Association (VBZ): http://www.vbz.nl • Association of organic production and trading companies / Vereniging van Biologische Productie- en handelsbedrijven (VBP): http://www.vbpbiologisch.nl/
Trade fairs offer for companies from developing countries the opportunity to establish contacts, promote their products and conduct EU market orientation. Major fairs of EU-wide significance
Source: CBI Market Information Database • URL: www.cbi.eu • Contact: [email protected] • www.cbi.eu/disclaimer
Page 13 of 14 CBI MARKET SURVEY: THE (ORGANIC) COFFEE, TEA AND COCOA MARKET IN THE NETHERLANDS are mentioned in the CBI document ‘From survey to success: guidelines for exporting coffee, tea and cocoa to the EU’. Trade fairs of interest in The Netherlands are: • AGF Totaal 2007 - International trade fair for food and vegetables: http://www.agftotaal.nl • Please also refer to the CBI document ‘From survey to success: guidelines for exporting coffee, tea and cocoa to the EU’.
Trade press can function as a means for gaining insight into market developments and competition, but can also have a promotional function. This concerns finding potentially interesting companies, as well as promotion of your own activities and products. Major trade press of EU-wide significance is mentioned in the CBI document ‘From survey to success: guidelines for exporting coffee, tea and cocoa to the EU’. Trade press of interest in The Netherlands is: • De Levensmiddelenkrant: http://www.levensmiddelenkrant.com/supermarkt.html • Distrifood - http://www.distrifood.nl • Foodmagazine: http://www.productonline.reedbusiness.nl/product.asp?catalog%5Fname=RBI&category%5F name=&product%5Fid=211%28Octopus%29&cookie%5Ftest=1
This survey was compiled for CBI by ProFound – Advisers in Development in collaboration with Mr. Joost Pierrot.
Disclaimer CBI market information tools: http://www.cbi.eu/disclaimer
Source: CBI Market Information Database • URL: www.cbi.eu • Contact: [email protected] • www.cbi.eu/disclaimer
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