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16 NORDIC MARKETS THE FRUIT TRADE IN THE NORDIC COUNTRIES IS SUBjECT TO THE PARTICU- LAR FEATURES OF THESE COUNTRIES: FROM CLI- MATIC CONDITIONS AND THE LOCAL HORTICUL- TURE TO THE CHARAC- TERISTICS OF CONSUMP- TION PATTERNS. By Uwe Schwießelmann uwe@fyh.es Domestic Horticulture and Imports. The Scandinavian climate naturally restricts the number of outdoor crops and makes greenhouse growing very cost-intensive. Due to the low temperatures, many products have to be cultivated in glasshouses (e.g. in Sweden, greenhouse crops account for half the value of horticultural production): 100 per cent of tomatoes, close to 80 per cent of cucumbers, and an increasing proportion of berries. But taking into account the elevated costs of heating, it is logical that to compete with often extremly cheap im- The Peculiar Case of Finland Though, with little more than 5 m inhabitants, Finland is not exactly a point of reference for the international fruit or food retail trade, it certainly presents a curious picture inasmuch as internationalization – or rather the lack of it – is concerned. At the same time, the degree of concentration is even higher than in other Nordic countries. Sales of the S Group, ports is very complicated. As far as outdoors horticulture is concerned, volumes of lettuce (especially iceberg), carrots, and onions are worth mentioning, though in Sweden, for example, strawberries represent the highest value (about 27 me) of all outdoors crops. Apart from berries, apples and pears, above all in Sweden, outdoors fruit production is not really important. So, the Nordic countries heavily depend on imports of fresh fruits and vegetables: their market share is about 95 and 60 per cent, respectively. For many years, the Netherlands, followed F&H International 1 • November 2011 Reporting On... Things to know about the Nordic Markets owned by regional and local Finish companies, represent an amazing 44,1 per cent of the domestic food market. Its biggest competitor, Finish Kesko Corporation, which, apart from all Nordic countries except Denmark, operates in the Baltic States, Russia, and Belarus, runs over 1,000 K-food stores in Finland which account for 35 per cent of the market. 9 per cent correspond to Suomen Lähikauppa Oy (formerly Tradeca Ltd.); Lidl accounts for about 4,8 per cent. by Spain and Germany, have been the most important suppliers to the Nordic markets. Only in the case of Denmark, imports from Spain are exceeded by shipments from Germany. The leadership of the Netherlands reflects, in the first place, the country’s role as central trans-shipment place and re-exporter. In the case of Germany, apart from bordering Denmark, we have to take into account, that Lidl and Edeka, for example, are supplied by these multinationals’ Germany-based fresh-produce distribution centres. The Nordic Consumers. The Nordic markets have always stood out for consumers’ high purchasing power as compared to the European average: up to 160 per cent in the case of Norwegians (food prices are 43 per cent above European average). Other characteristics include a marked environmental awareness; the importance of healthy, safe and functional food products; the prominent role of organic food in these countries; the high degree of consumers’ consciousness concerning the ethical aspects of the sustainability concept (fair trade products); the orientation towards highquality, added-value products; and an inclination of consumers to favour regional produce. All this may still be true, to a certain degree, but there can be no doubt that the picture has been modifying over the last few years. “The decrease in the tomatoes growing area in Sweden is due to the availability of much cheaper imports which is why there is no market for Swedish tomatoes. So much for the topic of consumers’ preference for regional products...” M Peter Horvath, Purchasing Manager Fruit and Vegetables at Saba Frukt & Grönt. The Importance of the Discount Concept. The most significant change in the consumption patterns is an increase in the importance of price. The expansion of big discount retail chains on these markets, has clearly had a series of repercussions. On the one hand, it accelerated the process of concentration of the food trade and intensified the concentration on prices to the detriment of quality-orientation, on the other hand, it forced retail chains to establish or reinforce their own discount concepts. So, Swedish ICA and Dansk Supermarked combined forces in a joint venture to operate Netto discount stores in Sweden (over 100) and Norway; in addition, Dansk Supermarked operates more than 400 Netto stores in Denmark. With 164 stores, ‘Willys’ (Axfood) is Sweden’s leading discount chain. Aldi, the German discount legend, runs 230 stores in Denmark.
M Peter Horvath, here in Saba’s Helsingborg Warehouse, is the Purchasing Manager at Saba Frukt & Grönt. “The key to Saba’s success is that we offer logistics solutions to the supermarkets, apart from the normal buying and selling business. Our platform can do the planning for a chain that wants us to do so. Besides, we supply all sorts of information, education and training, knowhow, etc. to the supermarkets. Our Category Management coaching is among the best to be found on the market.” “Lidl’s entry into the Scandinavian market has had a certain impact and at the beginning there was some preoccupation. All chains prepared to react to possible changes to occur in the market. Now that Lidl has established as one of the players of Swedish retail, the impact has not been that important at all. Even though the quality of Lidl’s fruit and vegetables is excellent, it is not really that cheap.” “Nowadays, fresh produce retailers have to find their own distinctive strategies that differentiate them from their competitors: For example, ICA Maxi hypermarkets aspires to be the one with the widest and completest fresh produce assortment; Axfood’s soft discount chain Willys wants to be the most inexpensive chain; and Coop Konsum supermarkets have carved a niche for themselves as environmentally aware retailers with a wider assortment of organic products.” M Peter Horvath, Purchasing Manager Fruit and Vegetables at Saba Frukt & Grönt. “What has definitely changed is the markets traditional orientation towards high-quality, valueadded products. These products are still there and there is a market for them. The difference is that now there is a wide offer beside these expensive goods. But that is not really too recent a change but has been going on for many years.” M Magnus Ingelsson, Purchasing Manager Fruit and Vegetables at Axfood Reporting On... F&H International 1 • November 2011 17
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