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Spain’s juice industry cranks up with new citrus harvest

The EU is the principal market for Spanish fruit juice exports in general, taking almost 80% of the total volume, with France alone taking a third of Spain’s exported juice, followed by the UK with nearly 15%.

The staggered citrus harvest is underway in Spain and along with it the production of juices, which accounts for the majority of the fruit collected.

Asozumos, the Spanish association of juice manufacturers, says preliminary estimates suggest the harvest will net about 6 million tons, down 22% on previous seasons due to weather conditions including particularly high temperatures over summer.

Approximately 30% of the fruit is destined for fresh consumption and the rest for juice, it said in a press release.

Spain is the largest producer of orange juice in the European Union, with its orange juice exports last year worth about €260 million.

The EU is the principal market for Spanish fruit juice exports in general, taking almost 80% of the total volume, with France alone taking a third of Spain’s exported juice, followed by the UK with nearly 15%.

Asozumos said the Spanish citrus harvest generally takes place between October and May, depending on the weather, as a prelude to a subsequent process of selection, extraction, pasteurisation and packaging of the juice.

Valencia is Spain’s leading producer of citrus fruit, including oranges, tangerines, grapefruit and lemons, and represents 65% of the total volume, followed by the regions of Murcia and Andalusia with 21.8% and 7.2% respectively, Asozumos said.

Spain’s main citrus growing regions (naranjas=oranges, pomelos=grapefruit, limones=lemons)

“Orange juice retains the physical, chemical, organoleptic and nutritional characteristics of the fruit from which it comes and, by law, contains no added sugar,” it said.

 

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The new face of grocery retail in Spain

There has been a boom in proximity retailing and urban stores in Spain, with various Spanish and foreign retailers opening stores on busy shopping streets in city centres, generally with lower amounts of retail selling space. Examples include Condis Express, Carrefour Market and Supercor Expres.

Spain is slowly recovering, but its five years of economic recession have left a lasting impact on its retail sector and consumer behavior. Shoppers are now more price-conscious and retailers have had to adapt to the increasing importance of convenient locations and the incipient threat from low-cost retail formats.Those are among the observations in a new USDA GAIN report on opportunities for US exporters in Spain’s retail food market.

Consumer confidence

The report says Spain is expected to continue to show positive signs of recovery, with a return to pre-crisis retail sales figures likely by 2019. “This situation will likely be reflected in consumers gradually increasing their expenditure again, so opportunities will continue to arise for U.S. exporters,” it says. In the retailing industry, some operators have started to see slow positive growth for the first time in several years, especially in grocery.

Shopping habits

GAIN says that, according to Euromonitor, another effect of the economic crisis is consumers are now reluctant to travel to hypermarkets and big shopping malls on city outskirts, due to the cost and inconvenience. “As a result, the future of many of the large retail centers built during the good days of the Spanish economy are compromised.”

There has thus been a move to proximity retailing and urban stores, with various Spanish and foreign retailers opening stores on busy shopping streets in city centres, generally with lower amounts of retail selling space. Examples include Condis Express, Carrefour Market and Supercor Expres.

Product trends

Spanish consumers are also increasingly health conscious, GAIN says, noting that naturally healthy and free-from products are more widely available in supermarkets and specialty stores. “One of the most interesting and promising categories are healthy products indicated for food intolerances. According to Euromonitor, in 2014, food intolerance products sales grew 27% in value to reach $306 million.

Online sales in Spain

Online retailing is steadily increasing (+7% in value in 2014) and expected to continue to be prosperous in the medium term, as more store-based companies move to online commerce.

Its top internet retailers are focusing on building trust among their collective consumer base. According to Euromonitor, the reasons consumers give for shopping online are:

  • Convenience 78%
  • Better prices and offers 73%
  • To save time 66%
  • Easy purchase process 56%

However, mobile retailing is outperforming internet retailing overall in Spain, where smartphone penetration is estimated at around 80%, one of the highest rates in the EU.

Table 2. Grocery Retailers Company Shares (% Value)

Source: GAIN report SP1542, Spain, Retail Foods Annual 2015

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How Spain’s fruit and vegetables market is evolving

Nielsen’s retail services account manager, Gema del Castillo Tamayo, shared insights into today’s Spanish consumer and where opportunities for growth lie.

Is there scope to increase retail sales of fruit and vegetables in post-recession Spain? At the AECOC Fruit and Vegetable Congress in Valencia in June, Nielsen’s retail services account manager, Gema del Castillo, shared insights into today’s Spanish consumer and where opportunities for growth lie.

Signs of economic recovery

Del Castillo started by looking at whether the market is on the road to recovery. Effectively, European consumer confidence continues to improve, she said, but it is yet to return to pre-crisis levels, namely before the big recession hit Europe (in about 2008). Nielsen data shows that In Spain, consumer confidence has reached levels not seen since 2010. There was 3% growth in the Spanish GDP in the first quarter of 2015, while the CPI fell 0.7%.

Other indicators, such as an increase in employment, car registrations, sales of electrical appliances and electricity consumption also augur well for believing that a recovery has started. The hospitality business, for instance, has stabilised, with beverage sales showing growth since 2013 and for the first time in six years the number of establishments has started to increase again. But Del Castillo warned this is a bit of a wobbly start to recovery that is accompanied by uncertainty.

What’s happening with FMCG sales?

Nielsen’s analysis shows that despite a decline in Spain’s population last year, demand strengthened, though with the downside of a drop in retail prices. Compared to 2013, the value of retail sales last year fell 0.4% and prices 1.1% but the volume was up 0.7%. For fresh produce specifically, sales were 1.2% and prices 1.8% lower as the volume rose 0.6%. But compared to last year, retail sales to this April were up 0.7% in value and 1.1% in volume and prices up 0.4%, with the respective changes for fresh produce being +0.3%, +1.2% and -0.9%. Thus overall the context is one of improved demand and a slowing of the drop in prices.

Key components of the fast-moving consumer goods industry during the first quarter of this year were:

  • Strong pace of new store openings and concentration of the top retail chains
  • Supermarkets and superstores are gaining share from specialist and traditional stores
  • A slowing in relation to the increased market share of private label goods (they have since started to grow again)
  • A stable level of deal proneness

Price-sensitive, bargain-hunting shoppers

On the latter, Del Castillo highlighted that, according to Shoppertrends 2015:

  • 24% of consumers will change stores depending on which one offers the best sales promo
  • 37% rarely change stores but do actively look for the special offers
  • 20% say they know the prices of all the articles they buy regularly
  • 46% say they  know the prices of most of the articles they buy regularly and notice when there is a price change
  • 72% of shoppers believe that food prices have risen in the last year

The last figure shows that while there’s been a deflation of prices, many households have not perceived it, she said.

Trends in fruit and vegetables sales

Last year, fruit and vegetables accounted for 11% of Spanish consumers’ shopping spend, up from 10% in 2011.

Sales in the main categories have grown in volume thanks to lower prices. For fruit, it is oranges that are the winners, representing about 27% of the total fruit volume sold in the 12 months to April this year in Spain. Add mandarin sales (7% of the total), and citrus fruit accounts for one in every three fruits sold. Apples (11%) and bananas (10%) were next hottest in demand.

As for vegetables, potatoes formed 29% of the volume sold over the same period and tomatoes 16% and together they account for nearly one in every 2kg of vegetables bought, but just 31% of the total vegetable spend. Next highest in volume came onions (9%) and peppers (5%).

Nielsen’s household panel data shows fresh produce is accounting for an increasing share of the value among all shopping missions, but particularly in the case of routine ones, which are those involving the biggest spend. It is also increasing across all retail channels, but above all in supermarkets and superstores. The latter are gaining ground, moving from 51% in 2008 to 58% in 2014 in terms of fresh produce sales, compared to 49% to 42% for traditional and specialist grocers.

Opportunities for growth: online and convenience channels

Del Castillo said that as growth opportunities, two areas that have already seen major gains outside Spain are the online and convenience channels.

“The online channel is growing at a much faster rate than offline,” she said, displaying figures showing the value of online fresh produce sales value grew 14.7% for the 12 months to April 2015 while offline sales rose just 2.2%.

Fresh produce accounts for a smaller share of the online shopping basket – for fruit it’s 17% for offline and 9% online –  however there are big opportunities for staples such as potatoes.

The key to increasing online sales is to “earn trust through reliability“, Del Castillo advised, and ways to do this include offering customers a refund if they’re not happy with the produce delivered. In her own experience, Del Castillo said the melon delivered to her by online suppliers is usually much tastier than what she picks herself in person.

“More and more shoppers are buying fresh products online despite retailers being sceptical about the potential of this channel for them. The consumer is definitely ready to do part of their fresh product shopping online, all that is lacking is the retailers’ investment to sell these products online properly,” she said.

The convenience channel, which includes a broad range of outlets including petrol stations, fitness centres and airport and train station shops, is also very promising. Sales of convenience products, such as pre-cut and prepared fruit, salad and vegetables in the UK’s leading supermarkets, are worth €1.7 billion a year, according to Nielsen Scantrack Grocery Multiples data.

JB
Photos of Gema del Castillo by Roger Castellón courtesy of AECOC

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Putin prolongs Western food ban

Spanish fruit and vegetable growers are among those asking the European Commission to urgently adopt new aid measures for them amid Russia’s extension of its veto on certain Western food imports.

Spanish fruit and vegetable growers are among those asking the European Commission to urgently adopt new aid measures for farmers amid Russia’s extension of its veto on certain Western food imports.

The Russian move came in retaliation to the EU decision to prolong until January sanctions against Russia over the Ukraine conflict.

Russia’s original ban – which applied to food products including vegetables, fruit, beef, pork, fish and dairy products from the EU, the US, Canada, Norway and Australia – was introduced last August. Yesterday, Russian President Vladimir Putin announced he was extending it, “by one year beginning from today.”

Fepex, the Spanish federation of associations of producers and exporters of fruit, vegetables, flowers and live plants, immediately called on the European Commissioner for Agriculture Phil Hogan to extend the exceptional measures used by the Commission to help EU fruit and vegetable growers affected by the existing ban.

In a letter to Hogan, Fepex said the Russian ban on the import of EU fruit and vegetables in force since last August had deprived the Spanish fruit and vegetable sector of the top non-EU export market. “There are no alternative markets that can compensate for this loss,” it said.

Fepex calculates Spanish fruit and vegetable exports to non-EU countries in the first quarter of this year were down 17% – a total of 218 million tons – on the same period in 2014. It said the extension of the veto “will worsen a major crisis in the EU summer fruit market” and called for the Commission to urgently adopt market crisis management measures.

Meanwhile, Murcia’s Ramón Luis Valcárcel Siso, a member of the European Parliament from Spain’s ruling Partido Popular party, in a written question in the Parliament has called for stone fruit to be covered under the earlier exceptional support measures.

He said these existing measures did not contain any exceptional support for Spanish plums, table grapes, kiwifruit, peaches, apricots or nectarines.

“Exports to alternative markets have not absorbed the 60,698 tons which were previously exported to Russia. Measures need to be taken therefore to prevent prices falling as they did between 2013 and 2014 (by 32.3% for plums, 36.7% for yellow flesh peaches and 44.9% for yellow flesh nectarines). The marketing season started in April and farmers are now extremely concerned,” he said.

Photo of Russian President Vladimir Putin: Kremlin.ru [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons

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Spanish concerns about EU imports of Moroccan tomatoes

Spanish tomato growers have stressed the importance of separate minimum entry prices for round and cherry tomatoes entering the EU market.

Spanish tomato growers have stressed the importance of separate minimum entry prices for round and cherry tomatoes entering the EU market.

Fepex – the Spanish federation of associations of producers and exporters of fruit, vegetables, flowers and live plants – said having just one value for all types of tomatoes makes it difficult to rigorously monitor the market and implement safeguard clauses in trade agreements when necessary. Cherry tomato prices can be up to four times that of round tomatoes.

In a press release, Fepex said that entry prices for tomatoes from Morocco will be one of the main issues on the agenda at the next meeting of the European Commission’s tomato forecast working group, to be held Thursday June 4.

It said that at the meeting it will also propose that the Commission set a market withdrawal price for cherry tomatoes separate to and higher than the current one for tomatoes in general – €18.30/100kg – because this amount is “clearly insufficient to manage market crises in this segment, which endures strong competition from Moroccan imports.” Fepex said that last year farmgate prices for Spanish tomato growers were down 14.5% on the previous year.

Commission sees no signs of market disturbances

In February, the Commission said it closely monitors quota limits for preferential access conditions for tomato imports from Morocco under the bilateral agricultural trade agreement with that country.

“Based on surveillance data from the national customs authorities, imports in October 2014 were 23.4% higher than in October 2013; whilst in November 2014 imports exceeded by 13.5% those of November 2013. Volumes imported under preferential conditions are within the thresholds set by the agreement.

“Member States have reported a positive trend for the prices of tomatoes produced in the EU since August 2014. The EU average price currently remains above the average prices of the last three years. The Commission does not have any evidence of serious market disturbances which would justify applying the safeguard measure foreseen in the Agreement,“ said Agriculture Commissioner Phil Hogan in reply to a written question from Spanish MEP Gabriel Mato.

Mato had asked if the Commission was considering taking action to avoid upsets to the EU market that might be caused by the increase in Moroccan tomato imports.

“This increase in imports threatens the market access of tomatoes grown in Spain, France and Italy due to the fact that, in those countries, farming is subject to much stricter social and food safety conditions than are in place in Morocco, placing farmers in those countries at a clear disadvantage,” Mato had written.

Sources:
Fepex
Parliamentary question
Graph & table

Background: Commission statement on tomato import rules

 

 

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Mercadona grows its fresh product market share by 5%

Turnover for family-owned supermarket chain Mercadona – by far the leader in Spain’s grocery market – rose 2% last year to reach €20.16 billion, its annual report shows.

Turnover for family-owned supermarket chain Mercadona – by far the leader in Spain’s grocery market – rose 2% last year to reach €20.16 billion, its annual report shows.

And net profit for the Valencia-based company – which by the end of 2014 had a network of 1,521 stores – stood at €543 million, up 5% on 2013.

Announcing the results last month, CEO Juan Roig said they were, without a doubt, due to the hard work of Mercadona’s 74,000 workers, 120 integrated suppliers, and the primary sector serving its sustainable agri-food chain.

Fresh local products

In the report, Mercadona highlighted its commitment to using “raw materials of Spanish origin whenever viable” and its new system for managing the selection of fresh products, which was initiated in 2011 to strengthen local economies and promote Spanish agricultural products. In this context, it said in 2014, Spanish products it purchased included:

  • Summer strawberries: 20 tons from Segovia
  • Artichokes: 190 tons from Tudela
  • Cherries: 4,000 tons from Extremadura, Aragon and Alicante
  • Oranges & tangerines: over 130,000 tons (+15%)
  • Potatoes: 80% of total were Spanish, amounting to 100,000 tons from Murcia, Seville, Huelva, Albacete & Castilla y Leon
  • Grapes: 210 tons from Cadiz and Seville

5% growth in new fresh sections

Under its new fresh products sales models, by the end of 2014, all Mercadona supermarkets had implemented new bakery sections and locally-sourced fruit and vegetable sections.

Mercadona said the new model had allowed for the strengthening of local economies, as well as boosting locally sourced products, which were “well accepted by clients.” It had also helped increase its fresh product market share by 5%.

Mercadona fruit and veg section.png

 

Commitments for 2015: 60 new supermarkets

In 2015, Mercadona plans to invest approximately €650 million, destined mainly towards the opening of 60 new stores, the refurbishment of a further 30, continuing the building of the logistics block in Abrera (Barcelona), and the start of a new logistics block in Vitoria-Gasteiz.

Screenshot 2015-04-14 at 11.48.15.png

Caspopdona: Mercadona’s sustainable food chain project

Introduced in 2010, the Caspopdona project is intended to develop Mercadona’s Sustainable Agri-Food Chain. Specific applications under this initiative include:

El Perelló Cooperative: The integrated supplier-manufacturer Pinchos Jovi has reached an agreement with this cooperative for sowing whole fields of peppers on summer, which it then uses to make its brochettes. In return for the agreed volumes and quality, Pinchos Jovi guarantees fixed prices and stability, which has enabled the El Perelló Cooperative (Valencia) to plant 5,600 hectares of green peppers, 3,600 of its own and 2,000 belonging to the Viver cooperative, amounting to the production of approximately 140,000 kilos of green peppers in Valencian fields.

Dafran&Darzoves: Mercadona has signed a contract with this tomato-producing company based in Almeria, which supplies it with 140,000 kilos of tomatoes per week. The agreement reached in 2014 has enabled this company to increase its turnover by 50%, by keeping its facilities operating throughout the year, and to employ twice as many people, with as many as 250 employees.

Logistics: intelligent warehouses

Mercadona’s logistics network now covers a total area of over 847,000 sqm. Nearly a decade ago, the company decided to innovate in its logistics network by developing and introducing totally automated intelligent warehouses, which eliminate “handling or overstrain by employees, helping to prevent and reduce the risk of industrial accidents, as well as increasing productivity and efficiency.”

Mercadona now has three such intelligent warehouses – in Ciempozuelos (Madrid), Riba-roja de Turia (Valencia) and Villadangos del Paramo (Leon) – and construction of a fourth, in Abrera (Barcelona), is due to be completed in 2017.

Mercadona logistics .png

Automated storage and preparation of pallets

In 2013 the company also installed the so-called PPG (Picking Puente Grua) automated gantry crane in its logistics block at Guadix (Granada), a system for automated storage and preparation of pallets of meat, fruit and vegetables in which it invested €5 million.

Read the annual report here.

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Spain’s 5 al día targets future fruit & veg consumers

5aldia

Spain’s 5 al día (5 a day) association – which promotes daily fruit and vegetable consumption – put increased focus on creating healthy food habits among children last year.

At its annual general meeting in Madrid last week the non-profit presented figures showing fruit and vegetable consumption in Spain is below that recommended by the World Health Organisation. WHO advises at least 600g/person/day but current consumption in Spain averages just 400g, it said, and it is the country’s over-50s population that eats the most fruit.

“That’s why, in 2014 we put special emphasis on creating healthy consumption habits among children, the consumers of tomorrow, in the actions and promotions carried out by the association,” said 5 al día director Nuria Martínez Barea.

Among such initiatives, the non-profit organisation has developed a play for children titled “The Magic of Fruit and Vegetable” (“La Magia de Las Frutas y Hortalizas” in Spanish) and is rolling out the Frutoteca, a fruit and vegetable learning centre designed for children.

Frutoteca.png

It has also developed various TV spots featuring children, held competitions, and has a school programme that last year reached 332 education centres and more than 70,000 children.

According to 5 al día, the latest data from the Spanish Government’s Consumer Food Panel shows:

Average annual per capita household consumption
Fruit 101 kg
Vegetables 63 kg
Potato 23 kg
Total fruit and vegetables 187 kg

It said Spain produces more than 24 million tons of fruit and vegetables – making it Europe’s second biggest fruit and vegetable grower and the sixth biggest globally.

 

 

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Nielson on changes in fresh produce shopping in Spain

512px-Spain-flag-map-plus-ultra

Supermarkets and hypermarkets in Spain have snatched market share from dedicated fresh produce providers, a Nielson report says.
It says during the financial crisis consumers changed their fresh produce shopping habits, helping supermarkets and hypermarkets win share from the specialist channel – rising from 51% in 2008 to 58% last year.
Nielson said the Spanish supermarkets and hypermarkets were helped by their improvments in assortment and quality. Fresh produce is very important to them because it is bought more often and thus generates more store traffic and customer loyalty, helping stores increase sales in other categories, it said.

Lower fruit and vegetable prices see Spanish consumers buy more

In another report on shopping trends, Nielson estimated fresh produce sales in Spain last year to have been worth €21 billion.
It also said a 1.1% fall in retail prices means Spanish shoppers can now buy more for less. Last year that translated into them buying 0.7% more in volume than in 2013, but for a total value down 0.4%.
The price drop was most pronounced in fresh produce and in particular fruit and vegetables“Sales of fruit and vegetables had the highest growth, 2.9% and 1.8% respectively, due to a reduction in prices by about 5%,” Nielson said

 

Read (in Spanish) about the first report here and the second report here.

 

 

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Opening new Asian markets a priority for Spanish exporters

Entering new markets in China and other Asian countries such as Thailand, Taiwan, Vietnam and South Korea a priorities for Spanish fresh produce exporters.

China and other Asian countries such as Thailand, Taiwan, Vietnam and South Korea are priorities for negotiations to open up new markets, says Spain’s exporter federation Fepex.

But at a meeting of its Working Group on Fruit and Vegetables in Madrid this week – to discuss an Internationalization plan – product-country specific protocols with contain very strict phytosanitary requirements were identified as the main barrier faced by fruit and vegetable producers and exporters.

Meanwhile, attendees were informed that that a proposed protocol with China for the export of peaches and plums from Spain is currently being assessed by the Chinese authorities.

 

Read Fepex’s report on the meeting in Spanish.

 

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Mercadona now holds 22.1% groceries margin in Spain

Screenshot 2015-02-16 at 16

 

Mercadona was by far the the leader but Carrefour Hiper, Dia, Eroski Supers and Lidl came next in holding the biggest share of Spain’s fast-moving consumer goods market last year, according to a report by Kantar Worldpanel.

Mercadona’s market share was triple that of its nearest competition, Carrefour Hiper, and it also dominated with its 17.5% share of perishables, climbing 6% on 2013.

But it was Lidl that grew the most in the perishables category, with its share rising 23.5% on 2013 to 2.1% last year.

The ten retail chains together accounted for 52.9% of total FMCG sales in Spain last year. All except Alcampo either improved or maintained their market share relative to 2013.

Perishables sales set to slump further

According to Kantar Worldpanel consumer insights director César Valencoso, last year was one of the worst for Spain’s FMCG sector, which lost 2.9% in sales value and 1.8% in volume overall – and he said the fresh produce category was largely to blame.

Indeed, the perishables category saw relative declines of 4.8% and 3.1% and the sales volume this year is poised to drop again, specifically by 1.1% on 2014, while most other categories are poised to improve, he said.

Market shares in Spain for sales of fast-moving consumer goods (FMCG)*

Retail chain

2014 ranking

2013 share in %

2014 share in %

change in percentage points

change in %

Mercadona

1

21.5

22.1

0.6

2.8%

Carrefour Hiper

2

7.5

7.7

0.2

2.6%

Dia

3

7.4

7.6

0.2

2.7%

Eroski Supers

4

3.1

3.3

0.2

6.4%

Lidl

5

2.7

3.1

0.4

14.8%

Alcampo

6

2.9

2.8

-0.1

-3.4%

Consum

7

1.7

1.9

0.2

11.7%

Eroski Hyper

8

1.5

1.6

0.1

6.6%

AhorraMás

9

1.5

1.5

0

0%

Caprabo

10

1.3

1.3

0

0%

 

* including food; baby, cleaning and personal care products; and pet food

source: Kantar Worldpanel based on sample of 12,000 households which reported daily to it on what they bought and where.

 

Read more: http://www.kantarworldpanel.com/es/Noticias/Buenas-perspectivas-Gran-Consumo-2015

 

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