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Contents
The areas to be covered
include:

ƥ The size of the U.K. market for tropical products

ƥ Retail concentration in the U.K. market
ƥ Social changes in U.K. market / consumer demands
ƥ The Impact of Changes in Legislation
ƥ The ƠNewơ standards ISO 9000, ISO14000, SA 8000, EUREP
ƥ Organic Production - requirements and future market
ƥ Stategies for accessing for the U.K. market
ƥ Conclusions
The Size of the Market for Exotic Products

Mainstream Exotics - TNS Superpanel figures (year ending April 2000

% change year on year.)

Product Sales $ Value % Change Yr on Yr

Kiwi 37.20 -3
Mango 18.53 +33
Papya 3.95 +48
Other Ơexoticơ 1.53 +5

As an example, Sainsbury list 32 different lines of exotic fruit and 42

different lines of exotic vegetables.
Examples of exotic lines

These lines are usually seen as airfreighted to the U.K.

Asparagus Maracuya
Baby Pineapple Mango
Baby Pitahaya Papya
Baby Sweetcorn Passion Fruit
Carambola Pitahaya
Harricot Beans Pomegranate
Graadilla Physalis
Ginger Rambutan
Limes Strawberries
Lychee Sugar Snap Pea
Mangosteen Tamarillo
Ripe and Ready Retail Display
Crops exported to the E.U. from this Region
Trends

The UK Fresh Fruit and Vegetable Market is valued at $8.61 billion

Trends

ƥ Towards Fresh Fruits

ƥ Speciality produce is a fast growing sector
ƥ Market driven by convenience and health, e.g. increased sales of pre-
packed salads. Seedless grapes, and Ơeasy-peelerơ citrus, whilst
bananas became the UKƞs best selling fruit in 1996
ƥ Organic produce is making an impact

The market will experience growth of 12.3% from the end of 1998 to reach
$10.04 billion by the end of 2001.
(source:keynotes 04.07.2000)
Supermarket Display
The concentration of trade in the UK

The major retailers - the supermarkets -

Asda
Safeway
Sainsbury
Somerfield
Tesco
Waitrose
account for more than 80% of all fresh produce sold in the UK.
As a policy, they prefer to sell their produce as Ơown-labelơ.
Tropical Fruits - Sales by Outlet - year ending 08-00
Consumer Desires

For the UK consumer. The four most important attributes in product choice
are:-

1- Brand Name / Reputation

2- Product Quality
3- Price
4- Guarantee
Social Change

Social Change in the UK will influence the future market

place, with a trend towards convenience foods, take-
away meals and consumption of food outside the
home. Since households are shrinking, both partners
are often working and need to save effort wherever
possible - they are Ơtime-poor / resource-richơ.
Consumer Interests

Apart from price, consumers are interested in:-

Food Safety and related issues
GMO-free
Organic
Pesticide Ơfreeơ
Fair Trade
Information
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Health
Pre-prepared
Convenience
Value for money
Home delivery
By implication the consumer desires us to use bio-methods of control
Biological Control
Biological Control
Legislation

UK and European consumers attitudes have been

affected by food Ơscaresơ over the past ten years
including such diverse causes as listeria,
salmonella, E.coli 0.157, pesticide residues,
G.M.O.ƞs, B.S.E. and in parallel, reports of
exploitation of child labour and environmental
damage.
Use of MeBr being outlawed
Pesticides

The E.U. has been harmonising MRLƞs to meet the needs of safety
of consumers.
This work has been in 2 areas:-
harmonising E.U. MRLƞS
reviewing member country ƠApprovalsơ to achieve an E.U.-wide
list.
As with all products grown in the E.U. all imports from non-
member countries must comply with this regulatory development.

This work has the implication of severe disruption to the flow of

imports from the tropics, with its first serious impacts in 1999,
with the post-harvest fungicides used on many tropical products
being set at the Ơlimit of determinationơ (LOD).
COLEACP

COLEACP, in response to this regulatory change has developed an

ƠACP Pesticides Initiativeơ action plan. It has two components:

1 Seeking the setting of MRLƞs above LOD as import

tolerances for the Ơactive-ingredientơ / crop combinations
considered priorities in tropical and sub-tropical regions -
provided that the pesticides concerned are not highly
toxic.

2 The formulation of agricultural practices by the ACP

horticultural industries to comply with the new EU
commercial and regulatory requirements.
Codes of Practice

The COLEACP is actively seeking the regional

harmonisation of codes of practice
Seeking safe and responsible production in
the tropical horticulture sector, in a manner
that addresses the requirements of
producers, consumers and intermediate
stakeholders.
1990 Food Safety Act

British Importers, under the UK 1990 Food

Safety Act have a legal responsibility Ơto take
all reasonable precautions and exercise all due
diligence in avoidance of failure, whether in
development, manufacture, distribution or sale
of food to the consumerơ - the law requires the
adoption of HACCP and documented quality
management systems.
The need to be hygenic but safe
Code Compliance

Four codes will have high importance for exporters in the future,
They are:
ISO 9000 - Quality Assurance
ISO 14000 - Environmental Protection
SA 8000 - Social Auditing

The EUREP standards

EUREP - Principal Objectives

To ensure suppliers are using GAP - based on a robust legal framework

where compliance with regulations in the country of origin is an absolute
minimum requirement.
To encourage viable ICMS minimising inputs whilst achieving viable yields
for producers
To recognise existing ƠBest Practiceơ - and develop it further to meet
consumer needs through partnership with growers and suppliers
EUREP participating retailers (26)
Include:
Safeway, J Sainsbury, Tesco, Waitrose, UK others in Europe include:
Albert Heijn, Coop Italia, Rewe, Promodes, Spar Austrai, Tengleman,
Migros, GB, Delhaize
EUREP Principle Objectives

Clear training, instruction, review mechanisms

QA systems require effective staff management and their development through
formal training
Quality training achieves the desired result only if the growers are integrated
into the supply chain
Training programmes must include relevant hygiene instructions
Trainers themselves need training - a role for co-ordination from export
associations
QA system must involve full written checks, with feedback to the farm and
regular formal reviews of the results of checks at source and destination.
With a clear commitment between the exporter and UK distributor, the latter
can have the confidence to jointly invest in training programmes, thus
increasing the supermarkets confidence in the relationships.
ICMS Integrated Crop Management Systems

To work under these systems is essential in order to supply the UK market,

but ICMS offers risk as well as rewards.
e.g.
ƥ increased risk of economically damaging pest attacks
ƥ damage to the cosmetic appearance of the crop
ƥ risk of insects present in the crop plantation and at harvest making their
way into the export product.
Display of Organic Produce in a UK Supermarket
Organic Production of Fresh Produce

This may offer an alternative method to combat the EU MRL harmonisation

The EU market for organic products is forecast, by Tesco, to grow by
400% over the next four years.
Organic production must be certified by an authorised auditor, under EU
regulation No.2092-91.
Organic Production in compliance with EU regulation No.2092-91 dated 24
June 1991, which lists the only crop production and protection products
which may be used.
A transition period of 2-3 years will be required if land is to be used for
organic production unless it can be proved that no agrochemicals have
been used.
Importation into the UK requires the importer to be registered with
U.K.R.O.F.S.
Retail Sales of Organic Foods in Western Europe 1996-2000
Organic Farmland
The Organic Market

UK retail organic market growth - actual and projected in $m

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Organic Facts

In the UK, organic sales are made by:

Supermarkets 69%
Independent Retailers 16%
Farmgates / Market Stalls 15%

More than 80% of all organic fruit and vegetables sold in the UK are
imported
Consumers are willing to ay a 20-30% price premium for certified organic
fruit and vegetables and are less concerned with the cosmetic details of
organic produce.
UK Supermarket Strategies

ƥ Fresh produce is now a destination category (for which shoppers will

switch stores)
ƥ Fresh produce is now the first department shoppers encounter
ƥ Fresh Produce is primarily Ơown-labelơ
ƥ The Food Safety Act 1990 has had a deep impact - it has required
retailers to take even more steps to ensure control of all activities
upstream, especially ensuring traceability
ƥ Rationalisation of the supply base - the race is on to find the best
partners
ƥ Innovation, especially in the areas of added-value product
ƥ Category Management has been fully introduced in 2000
What do Supermarkets Seek in Suppliers

Technical Excellence
Financial Stability
High Quality Supply Chain Management, TQM
Product Range Management
Innovation in every field - varieties, logisitics, packaging, promotion
and cost-reduction
TQM - What are the Key Features?

Everyone in the team, from farmworker / smallholder to the M D

must feel involvement in every aspect of quality.

This team must be given leadership and trained to create a universal

understanding that the exporters success depends upon the
contribution and participation of every member of that team.

It follows therefore, that every team member must feel free to

participate ƛ which can be a culture change.

Every team player is provided with the opportunity to perform their

tasks correctly as specified ƛ with commitment.
T.Q.M. Key Feature: Team Culture
The principal requirements of T.Q.M_

ƥ Involvement

ƥ Leadership

ƥ Culture change

ƥ Commitment

Can only be developed around an effective quality

assurance scheme, which is seamless between the
smallholding / farm, and the supermarket shelf ƛ
which is what the UK supermarkets expect of their
suppliers.

What do these supermarkets expect of their supply

chain?
What UK supermarkets expect and require of the supply chain:

Policy

ƥ A thorough knowledge and comprehension of their

needs
ƥ Operating and supplying to meet them

ƥ Certified performance and safety complying with

UK/EU law

ƥ Clear training / instruction / review mechanisms

ƥ Suitable / specified packaging and logistics

ƥ Reliable product / two way flow of information /

innovation

ƥ Clear value for money

What UK supermarkets expect and require of the supply chain:

A thorough knowledge and comprehension of their needs,

which must imply a very professional export chain

The expectations reflect those of their customers

First the negatives:
ƥ No dangerous residues
ƥ No G.M.O.ƞs
ƥ No exploitation of people
ƥ No degradation of the environment
What UK supermarkets expect and require of the supply chain:

The required varieties grown under ICMS

Working to a defined crop management specification

High levels of confidence generated:

ƥ From the consumer

ƥ From the supermarket
ƥ From the distributor

Being aware of the changes in the market-place

Understanding Category Management

No degradation of the environment
No degradation of the environment
Certified Performance and Safety

ƥ Ensure full understanding of UK 1990 Food Safety Act and

European Hygiene Directive 94/43/EEC
ƥ Meet requirements of ƠDue Diligenceơ ƛ a requirement of the
UK Act on all food suppliers
ƥ Use of ICMS and Crop Management Specifications / EUREP
ƥ Monitor all critical safety aspects (residues, water quality) ƛ
use HACCP to identify and eliminate risks
ƥ Run harvest and packhouse hygiene to highest possible
standards
ƥ Record all production inputs by field and farm
ƥ Ensure full audit trail on every package

Remember - the consumer awareness of Food Safety Issues is

higher than ever before
UK supermarkets are monitoring quality on shelves intensively e.g.
ASDAƞs ƠTell Timơ hotline to share information about produce and
the J.S. ƠCustomer Caresơ weekly summary.
Reliable Product / 2 way flow of information

Reliable product ƛ needs T.Q.M. at every stage for reliability of :

Eating quality
Inherent safety
The UK importer needs reliable suppliers for reliable product

Two-way flow of information ƛ of accurate information and intelligence will

benefit all partners

Use it in developing flexibility to respond both to changes in the market place,

and to problems arising

Additionally the information should be used to stimulate supplier generated

innovation (the only long term source of competitive advantage)

Reliable suppliers will benefit in the climate of slower growth in the fresh
produce market
Synergise their strengths
More stable returns
Potential for economies of scale with fewer suppliers in play
TQM is a fundamental requirement for Colombian Exporters

 
"
Check and record everything
Spot-check those who check
Shelf-life tests
Carry out spot checks at every stage
Plan the production
Assume all is OK
Ever try to save money at the
expense of quality
Stock-pile fresh produce in
anticipation of price increases
Short-change the cooling or
the packaging quality
Say Ơyesơ just to please your
importer
Which means going to the airport
Areas where confidence must be 100%

Confidence in the product

in the grading and packing
in the logisitics (cooling, transport, timeliness)
in the supply programme
in the communications (in both directions!)

(This is COLEACPƞs 5 Cƞs list)

TQM

TQM has to be a part of every Colombian exporters marketing policy

with regard to
varietal selection
production
harvesting
post-harvesting handling (grading, packing, cooling)
logisitics (on-time delivery, absolutely correct paper-work)
marketing (partnership with importer)
e.g. Sweet, yellow flesh pineapple
The Colombian exporter has to be:

Reliable
Responsible
Financially sound
To be able to organise:
working infrastructure (transport, cooling)
Quality Assurance
Well trained, efficient, experienced personnel
Accurate and timely information in crop progress
What the Retailer Expects

From the preceeding items we can see that the retailer can
expect
modern hygenic facilities at every stage
sound, audited, environmental policies
new product development
regular team meeting
a two-way, continuous flow of information
written procurement programmes
consistent quality
and all at the lowest possible cost
An unacceptable packhouse standard
A good example of modern, hygenic facilities
Conclusions

The UK market for tropical and sub-tropical produce is dynamic, challenging and
can be rewarding.
There is substantial concentration in buying power in the UK with supermarkets
controlling three quarters of fresh produce sales.
A good product is no longer the sole requirement of importers and supermarkets
audited compliance with environmental, ICMS and social protocols is becoming a
requirement.
The future for certified organic production is excellent, and offers great potential
for forward looking cooperatives of mixed family farms.
To access the UK market necessitates meeting many requirements, but will
indicate a modern, sound operation. With the introduction of category
management, access to supermarket sales is via a small number of importers.
Above all, successful exporting / importing requires financially sound, trustworthy
partnerships.

Dr A Legge
Technical Director
Mack Multiples Division
 Dr Alan Legge
Technical Director
Sena Oct ÈÈÈ