PRODUCT MARKET STUDY: UK FRESH FRUITS (INCLUDING EXOTIC FRUIT)
AND VEGETABLES MARKET
Date: May 2005
1.0 Product Definition
Fruits
HS CODE description
08030019 Bananas
08043000 Pineapples
08045000 Guavas, mangoes and mangosteens
080711 Melons and papayas
081060 Durian
08109030 Tamarinds, cashews apples, lychees, jackfruit
08109040 passion fruit, carambola and pitahaya
Vegetables
HS CODE description
070960 Capsicum
070310 Onions and shallots
07035990 Mushroom
07070005 Cucumbers
07049010 Cabbages (white and red)
07092000 Asparagus
07093000 Aubergines (Eggplants)
07099060 Sweet maize
07097000 Spinach
2.0 Overview
The United Kingdom per capita consumption of fresh fruits and vegetables
amounted to 79.6 kilogram in 2004, with an estimated value of £8.5 billion.
The trend of eating fruits have been on the increased with more British
snacking on fruits rather than on chips, chocolate and other snack
products, in an attempt to lead a healthier lifestyles.
The UK market for organic fruit and vegetables was valued about £170
million at retail value in 2004.
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The UK market segments of fresh and vegetable market is:
- Domestically produced fruit and vegetables
- Exotics (tropical/subtropical products)
- Off-season products
The market for fresh and vegetables can also be segmented according
to:
- Consumer market (retail shops, supermarkets, grocery
stores), and
- Out-of-home market (restaurants, business canteens, gas
stations, institutions, food fast chains)
Within the UK market, the range and availability of fruits and
vegetables has widened considerably in the last few years and most
supermarket chains sell a broad range of core line traditional
products supplemented by an ever increasing range of more exotic
products.
3.0 Market Trends
The healthy lifestyles adopted by many in the UK have seen an
increased in the consumption of healthy food. Traditionally, fruits and
vegetables are generally associated with health foods and something
that is good to consume. This is because fruit and vegetables contain
vitamins and natural antioxidants, which supposed to have properties
preventive to hearth disease and cancer. The recent furore about the
school dinners in the UK has prompted the government to have a
closer look at the unhealthy food that is being served in the school and
in the future fruits have been a compulsory addition to the menu.
Over the last few years, UK consumers have experienced several food
scares; many people are concerned about the safety of food, as well as
intensive farming on the countryside and on the environment in
general. These factors, combined with the increasing awareness of the
importance of diet and nutrition, have intensified interest in organic
foods and anything that is healthy.
To increase environmental-consciousness in the EU, a group of
leading Europen food retailers launched the EurepGap Protociol in
1999. The objective of the Eurepgap (Euro-retailer Produce Working
Group for Agricultural Practice) is to raise standards for the production
of fresh fruit and vegetables by promoting food safety, the sustainable
use of natural resources and more environment-friendly production. As
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from 1 January 2004, the leading European supermarkets chains only
trade fresh fruit and vegetables, which comply with EurepGap
standards.
Working according to the EureGap standards will be a very positive
move to export to the UK and EU. However, producers in developing
countries experience difficulties in complying with the Eurep standards
and are calling for relaxation of the standards. For more information on
the Eurep Group and EurepGap Protocol, please refer to
www.eurep.org
Survey has indicated that the UK people are currently working more
hours and coupled with busy social lives they have little and less time
for food preparation. On top of that, single households’ have increases
over the years. There is, therefore demand for products requiring
extensive preparation has declined, while the opportunities for easy to
prepare, semi-prepared, catered and processed products are
increasing. In the case of fresh fruit and vegetables sector, this has led
to pre-packed products and consumer packs containing prepared
vegetables and fruits. Prepared (washed and cut) fruits are very
popular and are sold by all the major UK supermarkets.
Exotic Fruit
Fresh Rambutan and Mangosteens
A remarkable increase can be seen in the consumption of exotic fruits
and off-season products like mangoes, papayas, passion fruits and
avocado. The increase in ethnic minorities living in the UK is
responsible for the initial increases in sales of all kinds of exotic and
tropical fruits. Once the products were on the shelves, other groups
became attracted to buy them. Major importers in the UK are now
promoting lesser-known exotics like rambutan and mangosteen.
The UK consumers of today are demanding for a more variety of fruits
in their marketing basket. People now travel far and wide and are very
much exposed to exotic fruits. The retailers are also willing to sell
exotic fruit to diversify their products and lure customers. Rambutans
can be found in big oriental supermarkets or local corner shops and
greengrocers but the mainstream supermarket like Tesco and Asda are
yet to sell them. However, Harrods is selling a large selection of exotic
fruits from all over the world and rambutans from Thailand are sold in
the exotic fresh fruit section.
For convenience these products are in easily recognisable packages,
containing small amounts and practical information. These make it
easier for UK consumers to become familiar with new and unknown
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products. UK supermarkets are increasingly interested in selling
exotics in these standardised packages.
4.0 Distribution
The most effective distribution channels for Malaysian exporters of
fresh fruit and vegetables are importers. These specialised Importers,
not only have the experience and knowledge of the market, they also
have strong relationship with suppliers and buyers all over the UK.
Malaysian exporters are advised to contact and network with
specialised importers for the distribution of their products. This applies
especially to cases where it concerns tropical fruit varieties and off-
season products.
The UK importers also do not only focus on the demand of the home
market. Because of their favourable, geographical location, many UK
importers have the possibility to export imported products to all other
European countries.
a) Wholesale Level
Importing wholesalers deal directly with exporters and they trade
on a large scale. As such they demand uniform quality and
volume on the side of the exporters. Buyers at this level are
increasingly developing partnership with preferred suppliers, in
order to ensure availability of produce, which meets their
specification on a week-in, week-out basis.
One of the main accesses to the whole sale trade in UK is to sell
to wholesalers in big market such as the New Covent Garden
Market. The Market is the country’s leading horticultural
wholesale market. One of their main activities is fruit and
vegetable wholesaling. Thousands of tonnes of fresh fruit and
vegetables from all corners of the world are delivered to the
market each day. Some 70 per cent of produce sold in the
Market is imported. Prices are mainly made on a free market
basis negotiated face-to-face and responding quickly to
demand. The Bulk of the produce sold is to the catering trade
which means that there is always a demand for high quality
supplies
b) Retail Level
In UK the traditional trade channels, i.e. the markets and the
greengrocers, continue to sell a significant share of the
fresh products in most key markets. In UK the specialised fruit
and vegetables shops, hyper /supermarkets are the forefront,
selling directly to the public. Mainstream supermarkets in the UK
have also increasingly penetrated the function of the specialised
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wholesale trade for fruit and vegetables and increasingly seek to
ensure their supplies through direct contact with growers,
especially for bulk tropical fruit and vegetables, which have a
considerable market in the UK. UK consumers increasingly
prefer one-stop shopping and superstores and fruit and
vegetables is increasingly channelled through large and
sophisticated handling companies, skilled in all aspects of
importation and distribution.
Many importers of fresh fruit and vegetables have in-house
distribution networks and warehousing facilities. Many importers
of fresh produce have controlled atmosphere warehousing
facilities and even packaging houses, responding to the growing
retail demand for pre-packed and sometimes trimmed fruits
and vegetables.
In the UK, 50 per cent of fresh produce is sold through retail
outlets, the remainder through the wholesale trade and for
processing. Around 75 per cent of total trade at retail level is
sold in supermarkets. Supermarkets such as Tesco,
Sainsbury and ASDA, dominate the distribution of fresh
produce.They do not buy direct, but from preferred
suppliers in the UK, who source and deliver the produce
according to the supermarkets’ requirements.
Small retailers such as greengrocers and independent stores,
tend to buy from the wholesale markets as they are buying in
smaller quantities
5.0 Regulation and Legislations
a) EU Quality Standards
The UK and EU sets high demand for quality. Quality is the key to
successful exports to the EU. The marketing standards for quality and
labelling of fruit and vegetables are laid down in basic regulation
EC 2200/96, in the framework of the Common Agricultural Policy
(CAP). For detailed description of UK standards for products subject to
regulation EC 2200/96, please refer to
www.defra.gov.uk/hort/hmi/common/standard.htm
Besides the EU regulations, UK importers of fresh and fruit vegetables
have their own quality standards. The EU requirements must therefore
be seen as indicative for the quality that is demanded by the European
importers
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b) Certificate of Origin
All imports consignments of fresh fruit and vegetables from outside the
EU and subject to EC marketing Standards will require recognised
Certificate of Conformity before they are allowed to enter the EU
market. For more information about the Certificate of Conformity,
please refer to www.defra.gov.uk/hort/hmi.htm
c) Environmental and safety issues
Environment aspects of products have become a major issue in UK
and EU in recent years. Exporters of fresh and vegetables to the EU
must be aware of health and environmental considerations of UK
customers by offering products which comply with both legislative and
market requirements. Imports of fresh fruit and vegetables to the UK
have to comply with regulations for Maximum Residue Levels (MRLs)
of a large number of pesticides.
The maximum levels for pesticides residues in and on certain products
of plant origin, including fruit and vegetables, are laid down in Council
Directive 90/642/EEC. To promote environmentally sound products the
EU award tariff preference or the levying of so-called ‘environmental
taxes’ on products. An example of preferential systems is the General
System of Preference (GSP) encouragement regime. To discourage
the entrance of polluting products to the market, ‘ecotax’ is levied.
Products of environmentally sounds are normally labelled with
Ecolabels. Ecolabels will guarantees the organic origin and quality of
agricultural products. EU standards for organic food production and
labelling are laid down in Council Regulation (EEC) 2092/91. The
Ecolabelling procedures are purely aimed at the products and indicate
that the product with a label has reduced impact on the environment.
d) Health and Safety Issues
Phytosaniatary regulations and plant protection
The international standard for phytosaniatary measures was set up by
the International Plant Protection Committee (FAO) in order to protect
the import agricultural goods which might have carry with them plant
diseases or insects. The plant Protection Service will inspect large
number of fruit and vegetables upon arrival in the EU. The inspection
consists of a physical examination of the consignment on
phytosaniatary risk, identification and validity of the covering
phytosaniatary certificate. The phytosanitary certificate is an official
document which certifies that the products described have been
inspected according to appropriate procedures, are considered to be
free from quarantine pests and conform to the current regulations of
the importing country.
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HACCP and ISO 9000
The need for good quality management takes on increasing
importance. Two systems to demonstrate reliability of quality control
system are:
HACCP – The Hazard Analysis Critical Control Point
(HACCP) system is applicable to companies that
process, treat, pack, transport, distribute or trade in
foodstuffs. Although exporters to UK are not obliged to
have an HCCP system and their systems will not be a
subject to control by the food inspection service in the
UK, the fact that they have approved HACCP system, or
work following a similar quality control, will be a very
positive argument in export business.
ISO 9000 – Manufacturers which have obtained an ISO
9000 series certificate, possess an important asset. The
certification may be a vital factor in the selection process
applied by trade partners in UK and Europe.
e) Packaging and labelling
There are no important statutory obligations at UK and EU level for the
packaging of fresh fruit and vegetables. Nevertheless, it is recommended
to comply with the wishes of the importer, who knows the demands of his
buyers. This goes for the packaging material, as well as for the sizes of the
packaging. Where the size of the packing are concerned, the general
standards, which are common practice, should be taken into account.
Malaysian exporters should adapt to the generally accepted sizes of the
cartons:
- 60 by 40 cm; and
- 40 by 30 cm
Member states of the EU are required to process between 50 and 65 per
cent of packaging waste. Malaysian exporters targeting UK and other
EU countries have to be aware of these requirements. That means that
packaging (transport packaging, surrounding packaging and sales
packaging) material should be limited and be re-usable or recyclable.
Otherwise the importer will be confronted with additional costs, thus
reducing the competitiveness of the exports.
Labels for fresh fruit and vegetables should at least contain the country of
origin, date of packaging and the name of the producer, so as to ensure
full traceability back to the grower.
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For more detailed information concerning packaging, marking and labelling
for various fruit and vegetables species, please refer to:
www.defra.gov.uk/hort/hmi/common/standard.htm
6.0 Import
Competition facing Malaysia and other developing countries are
very stiff as only 10 per cent of fresh fruit vegetables and around 30
per cent of fresh fruit imports into the UK was supplied by
developing countries. According to trade statistics, developing
countries have strong position in the trade of fresh fruits like
tamarind, lychess, bananas, guavas, mangoes , dates, pineapple,
and passion fruits, all of which more than half of imports is supplied
by developing countries.
In the trade of fresh vegetables, developing countries play an
important role in the supply of peas and beans, sweet maize and
baby corn, although asparagus is also increasingly supplied by
developing countries. From the ASEAN countries, Thailand seems
to be Malaysia’s major competitor. Thailand, for example, is the
largest exporter to the UK for sweet corns, fresh or chill. In 2004
Thailand exported £10.4 million, representing around 45 per cent of
the share of the market. Thailand is also the dominant exporters
from the ASEAN region in other vegetables such as spinach,
onions, mushrooms and Asparagus. Thailand is the third largest
exporter of asparagus after Peru to the UK. In 2004, Thailand
exported £1.7 million or 13 per cent of the market.
Imports of fresh fruits to the UK are mainly from the neighbouring
EU countries such as Spain, the Netherlands, France and Italy.
Bananas are the leading fruit product imported into the UK,
representing a share of 20 per cent of total fruit imports. Leading
suppliers are Costa Rica, Cameroon, Dominican Republic,
Colombia and Jamaica. Pineapples represent only a small share of
UK total imports although imports of these products increased
considerably in terms of value and volume in the past three years.
In 2002, UK imports of these fruits were £18.9 million but increased
to £37 million in 2004. Costa Rica is the main suppliers but
Malaysia’s main competitor from the ASEAN region is Thailand,
exporting £0.203 million in 2004. Malaysia’s export was negligible
and did not register in the imports statistics.
Mango and guava is another popular import from the developing
countries. Pakistan was the top exporter in 2004 with £6.5 million.
From the Asean region, Philippines and Thailand were the main
suppliers exporting £0.487 and £0.077 million respectively in 2004.
Malaysia’s export registered at £ 0.011 million in 2004. The Asian
ethnic communities in the UK prefer very sweet Indian and
Pakistani mango varieties. For example, Indian Alphopnse
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mangoes are popular with the South Asian community, while Julie
mangoes from St. Lucia appeal to people of the Caribbean descent.
Some ethnic fruits such as watermelons, papayas, durians,
tamarinds, Cashew apples and passion fruits and carambola (star
fruit) are becoming popular choice for both local and ethnic minority
in the UK.
Fresh watermelons are imported mainly from Spain and Brazil but
Thailand , China and Malaysia have also managed to have a share
albeit small, of the UK’s imports. Thailand, China and Malaysia
exports to the UK in 2004 were recorded around £0.001 million
each
Papayas are mainly from Brazil, India and Pakistan but Thailand
was the fifth largest exporter to the UK in 2004. Thailand’s export
was £0.375 million representing around 4 per cent of the market.
Malaysia’s exports were minimal with a total of £0.015 million in
2004
Thailand dominated the export market of durian to the UK. Thailand
share of the market was 99 per cent in 2004.Thailand export to UK
was valued at £0.080 million in 2004.
South Africa, Netherlands and Thailand were the top exporters to
the UK in 2004 for fresh fruits of tamarinds, cashew apples, lychess
and jackfruit. They exported £1.7 million, £1.22 million and £1.22
million respectively in 2004.
Malaysia is the 7th largest exporter to the UK of passion fruits and
carambola. Malaysia’s export increased by 115 per cent in 2004.
Malaysia’s export in 2003 was £0.059 million compared to £0.128
million registered in 2004. Thailand was the 11th exporter with
export of £0.016 million in 2004.
7.0 Opportunities
Opportunities of exports to the UK for Malaysian exporters lie in the
exports of tropical and subtropical fruits and vegetables, which are
hardly grown in the UK. There are a number of products, which will
find only limited opportunities in the UK fresh produce market. In
general this is applicable to leafy vegetables, with the exception of
the specific, so-called Asian vegetables. Other products varieties
which have hardly any change on the European market are for
instance tomatoes, cabbage verities, cauliflowers, cucumbers and the
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like. The self-supplying degree of the UK and the EU for these
products is very high. When there are problems in production and
harvesting in certain regions in the EU, neighbouring EU countries
will be the first suppliers to fill the gaps.
Opportunities for Malaysian exporters could lie in the trade of exotics
and off-season fresh fruit and vegetables. The exotics products have
become well known in the UK market during the past twenty years.
UK consumers have become familiar with these products and now
have common place in the shops, such as pineapples, bananas,
avocados and mangoes. These products are mostly subject to zero
or relatively low levels of import duty and do not face local
competition.
In addition, there is a group of ‘exotic’ products such as fine green
beans, baby courgettes and corn, sweet potatoes, pomegranates and
star fruit, some of which may be grown in the EC but are more
suitable to warmer, sub-tropical and tropical climates. The supply of
other exotic verities such as Durian, Rambutan, Guava, Carambola
and Star Fruit is also increasing but usually sold in specialised
greengrocers and oriental supermarkets such as Wing Yip, Hoo Hing
and Loon Foong. Wholesale market such as the New Covent Garden
Markets also sells these exotic fruits. Malaysian fruits such as
Rambutan, Carambola and Star Fruits are sold daily at this
wholesaler market.
The presence of large ethnic minorities in the UK also contributes to
the popularity and marketability of exotic fruits. Lesser-known exotic
products such as Durian, Rambutan and Langsat are available in all
the big oriental supermarkets, though most Durians are imported from
Thailand.
Developing countries play a major role in the supply of papayas,
tamarinds, lychess, bananas, guavas, mangoes, dates, pineapples
and passion fruits to the EU. In 2003, more than half of the imports
were supplied by developing countries and Malaysia could be one of
the leading suppliers of some of these products.
The quality of the product is the key to successful penetration of the
UK market and the UK sets high demands on quality. The Malaysian
government’s commitment to strengthen the industry by implementing
the ‘Malaysia’s Best’, which aims to highlight the quality of Malaysian-
produced fruits, should help Malaysian exporters to penetrate the UK
market.
The emphasis given by the Malaysian government in promoting the
agro based industry will in the long run resolved the problem of
supply of the products to the marketplace. It will also be addressing
the institutional framework addressing requirement such as quality
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and standard, which are the main criteria of market entry. Malaysian
fruits and vegetable would have the demand, as evidence in a lot of
fruits being imported from our neighbouring to the UK. The oriental
outlets are the niche outlets that carry most of these products and
these outlets are indeed expanding in terms of number and sizes.
Malaysia has been exporting Carambola to the UK and the amount is
still insignificant. The fruit has to a large extent being used as a
garnishing/decoration and not as a normal ‘eating fruits’. There is
therefore the need to promote Carambola, not as a mere fruit used
for garnishing but as a proper eating fruits. As in Malaysia, the fruit
could also be promoted as a beverage and riding on the fad of health
food, Carambola could be another addition of exotic juice in the UK.
Hence, awareness programme should be organise to promote the
fruits, to the buyers as well as consumers. Similar story line happens
to kiwi fruits, where in yester year, the fruits were used for garnishing
but today, kiwi fruits rival that of apple, pear and oranges in the fruit
basket of any consumers. With a maximum usage of the fruits, it will
in the long run result in the increase in demand of Carambola.
8.0 Exhibition
International Food and Drink Exhibition (IFE)
Frequency, date: biennial, March 2007
Email: ife@freshrm.co.uk
Internet: www.ife.co.uk
Fruit Logistica, Germany
Frequency, date: annual/ February 2006
Email: central@messe-berlin.de
Internet: www.fruitlogistica.com
9.0 Useful Addresses
- Department for Environment, Food & Rural Affairs
(DEFRA)
Nobel House
17 Smith Square
London
SW1P 3JP
Tel: 020 7238 6000
The Helpline email address is: helpline@defra.gsi.gov.uk
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- Covent Garden Market Authority
Covent House
New Covent Garden Market
London SW8 5NX
Tel: 0207 720 2211
Fax: 0207 622 5307
Website: www.cgma.gov.uk
- The wholesale Fruit and Produce Merchants’ Association of
Ireland
Tel: 353 0 1 289 7959
Fax: 353 0 1 288 6406
- Fresh Produce Consortium
Email: info@freshproduce.org.uk
Internet: www.freshproduce.org.uk
- Organic Food Federation Official
The Tithe House
Peaseland Green
Elsing, East Dereham
Norfolk NR20 3Y
MATRADE LONDON
3 May 2005
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