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Report050801_Food and Beverage

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FOOD AND BEVERAGE


                                                                    Report
By Letizia Gallacci (ICE),
eMarket Services Italy

www.emarketservices.com

August 2005
Abstract
The Food and Beverages sector is one of the most important industries in the world
economy. It is worth approximately US 4.22 billion and employs about 4.4 million people
working in Europe Union alone. The bipolar structure of the sector is composed of large
multinationals on the one hand and a mass of small and medium companies on the other.
The diffusion of ICT solutions and e-commerce is less pervasive than in other sectors, but
this is expected to change in the near future as e-commerce provides producers of niche
products a way to meet global requests and reach new foreign markets.




Contents
1. Industry definition and characteristics
    1.1. Definition of the Food and Beverages industry
    1.2. Industry characteristics and trends
2. Food and Beverages Industry e-business
    2.1. Introduction. Diffusion of ICT in the industry
    2.2. Statistical usage estimates for e-commerce tools and new technologies
    2.3. Prospects and challenges of e-commerce tools adoption and usage within the
         industry
3. Food and Beverages industry e-marketplaces
    3.1. Geographic distribution and focus
    3.2. Product and client profiles
    3.3. Industry e-marketplace directory
    3.4. Significant electronic marketplaces in the industry
4. Sources and References




1. Industry definition and characteristics

1.1. Definition of the industry
According to NACE, the classification of economic activities in the European Community,
the food and beverages sector includes;
     Manufacture of food products and beverages
     Manufacture of tobacco products




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Food and beverages are further subdivided into nine groups covering meat, fish, fruit and
vegetables, fats, dairy products, grain mill, starch products and prepared animal feeds.

1.2. Industry characteristics and trends
In 2004, the global Food and Beverage industry was valued at US 422 billion dollars.
The European Union is the world's largest producer of food and beverages with Food
representing more than 75% of the value of the sector, beverages accounting for 15%, and
Tobacco 8%.
The European food and beverage industry transforms more than 70% of the agricultural raw
produce in the EU and employs 4.4 million people.


WORLD'S EXPORT OF GOODS

                        1997     1998      1999     2000    2001      2002    2003      2004

World's Exports of      5.310    5.273     5.475    6.153   5.918     6.156   7.170     8.631
goods (billion $)

% change                -        -0,7      3,8      12,4    -3,8      4,0     16,5      20,4


FOOD, BEVERAGES AND TOBACCO INDUSTRY


                        1997     1998      1999     2000    2001    2002      2003      2004

World's Exports of      314.358 308.336 298.376 291.832 302.532 320.097 376.406 421.783
the sector(million $)

% change                n.d.     -1,92     -3,23    -2,19   3,67      5,81    17,59     12,06

Sector's share in       5,9      5,8       5,5      4,7     5,1       5,2     5,2       4,9
World's exports
Source: Italian Institute for Foreign Trade, 2005

After a crisis in 1999, the index of production for the manufacture of food products,
beverages and tobacco rose by 0.9 % in the EU-25.




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The Food and Beverage sector is fragmented and characterised by a bipolar structure.
On the one hand there is a relatively small group of multinational companies that lead the
industry and operate globally, and on the other there are a large number of small and
medium-sized firms producing for local markets.




Despite the fact that multinationals such as Barilla (IT), Danone (FR) and Unilever (NL) play
a lead role in the international performance of the industry, over 80% of the companies in
the European Food and Beverages sector are small and employ less than 50 employees.
This is most evident in Italy and Spain, where the percentage of small companies is 87.7%
and 81.5% respectively.

2. Industry e-business

2.1. Introduction. Diffusion and use of ICT in the industry
As a general rule the adoption of Information and Communication Technology (ICT) by
companies has grown considerably over the past few years, with more and more firms
connecting to the Internet. Firms use ICT to automate internal office and production
processes, for customer relations and supply chain management, or for the management of
distribution and logistics networks. Internet usage may mean a simple website presence or
the complete integration of business functions. However, the usage of ICT is less
widespread in the Food and Beverage sector than in other industries.
While small firms find it difficult to fully utilise ICT, large technologically advanced
multinational companies have, and the result has been the creation of big industrial groups
operating interconnected networks. The main factors that motivate companies in the food
sector to use ICT solutions include greater efficiency in internal processes (productive,
administrative, delivery of orders, etc.) and integration of internal processes with external
organisations to improve logistics and reduce costs.
According to a survey by eBusiness Watch in March 2003, computers were used by 82% of
companies who in turn provided 90% of employment. The most widely used network
applications were the Internet (70%) and e-mail (55%). LAN networks (25%), Intranets
(13%), EDI systems (8%), WAN networks (6%) and Extranets (3%) were used less often.




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The percentages rose for larger companies and dropped significantly in the case of smaller
ones.

Food, beverages and tobacco: Availability of IT infrastructure (2003)




2.2. Statistical usage estimates for e-commerce tools and
new technologies
Until recently, companies in the Food and Beverages industry have used e-business mainly
to improve their internal processes and procedures, but the growing complexity of the sector
is pushing companies to adopt more effective solutions as they face new strategic
challenges. Large companies use e-business solutions mainly to integrate their supply
chains and improve relationships with partners in the retail and distribution network. By
using e-procurement solutions, companies are driving down costs, improving logistics and
gaining a competitive advantage in the sector.




Source: e-Business W@tch (2003)




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In 2003 e-Business W@tch interviewed a sample of companies regarding their use of e-
business solutions. On the basis of the results online selling is less prevalent than e-
procurement. Though in a number of countries (including France, Italy, Spain), more
companies are enjoying online export sales for niche and specialty products.




Source: e-Business W@tch (2003)



2.3. Prospects and challenges of e-commerce tools adoption
and usage within the industry
Compared with other industries, e-business activity in the Food and Beverages sector is
quite low, except for the large international companies.
On the whole, the majority of companies from the sector rarely participate in e-commerce
and B2B electronic marketplaces. The main factor restricting the development of e-
commerce in the sector is a cultural one. 'Traditional' purchasing behaviours don’t fit neatly
into e-procurement models as the need for personal interaction with suppliers is still strong.
In addition, the number of suppliers who actually sell online is still limited due to the fact that
not every product in this sector is suitable for online selling.
There is also a significant lack of trust between users with regards to the reliability of their
‘partners’ and the security of transactions. For this reason, some e-marketplaces have
developed a code of conduct with the intent of building confidence in online exchanges. In
other instances companies push their smaller suppliers and trading partners to use
technology (don’t give them a choice) essentially driving SMEs to adopt e-business
solutions.

3. Industry e-marketplaces
Currently there are 51 active Food and Beverage e-marketplaces in the e-market Services
directory (June 2005).
All the e-markets in the Food and Beverages industry require a registration to join their
platforms.




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3.1. Geographic distribution and focus
The majority of e-markets are located in Europe (52%), North and Central America (35%)
and Far and Middle East (13%). The USA is the country with the largest number of
headquarters.


Geographical distribution of e-marketplaces

                                                                         Headquarters      N°

                                                                         USA               15

                                                                         Spain             7

          18                                                             Italy             6

                                                                         France            5
                                                        27               Belgium           3

                     7                                                   China             3

                                                                         Denmark           2

                                                                         Canada            2
      Europe    Far and Middle East   North and Central America



Geographic Focus


The geographic focus of Food and Beverages e-marketplaces (in other words geographical
areas where are located their buyers and sellers) is mainly worldwide (28%). In addition to
their global scope , many e-markets also focus on a particular country (23%).




                             2   2                                               Usa
                 3                                                               Spain
                                                                  15
         3                                                                       Italy
                                                                                 France
                                                                                 Belgium
         5                                                                       China
                                                                                 Denmark
                         6                         7
                                                                                 Canada




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Product and client profiles
Some e-markets specialize in a sub-sectors like fish and seafood, wine and spirits or dairy
products. Others are more horizontal and trade in a wide range of food and beverage
products such as olive oil, meat , cheese, pasta, bakery products and beverages. A small
number of e-markets concentrate on one product only such as sugar, eggs, and tomatoes.
The participants in Food and Beverages industry e-marketplaces are producers,
wholesalers, retailers and distributors of food and beverages products. Among sellers there
are farmers, bakers, dairy farms, fishing companies and wineries. Buyers include hotels,
restaurants and cafès.

3.3. Industry e-marketplace directory
The Food and Beverages e-marketplaces from the e-market Services directory are listed
below in alphabetical order. Information is presented on name of the e-market, headquarters
location, URL and available languages.
Name                    Country HQ URL                                 Languages available

Agrelma                 Italy         www.agrelma.com                  English, French,
                                                                       German, Italian,
                                                                       Portuguese, Spanish

Agribuys                USA           www.agribuys.com                 English

Albaris                 Italy         www.albaris.it                   Italian

Bakery Online           USA           www.bakeryonline.com             English

BevAccess               USA           www.bevaccess.com                English

Beverage Online         USA           www.beverageonline.com           English

BrandXchanges.com       Belgium       www.brandxchanges.com            English

Bravofood               Italy         www.bravofood.it                 English, French,
                                                                       German, Italian,
                                                                       Spanish

ChinaFeedOnline         China         www.chinafeedonline.com          Chinese, English

CPGmarket.com           Switzerland www.cpgmarket.com                  English, French,
                                                                       German

Dairy Network.com       USA           www.dairynetwork.com             English

dairy.com               USA           www.dairy.com                    English

ecMarkets               USA           www.ecmarkets.com                English

eFoods                  USA           www.efoods.com                   English




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Enonet.it               Italy     www.enonet.it                English, French,
                                                               German, Italian,
                                                               Russian, Spanish

EquipNet Direct         USA       www.equipnetdirect.com       English

eSugarIndia Lmtd.       India     www.esugarindia.com          English

Ex-trade                Denmark   www.ex-trade.com             Danish,Dutch,English,
                                                               French,German,Polish,
                                                               Spanish

FishRound               Korea     www.fishround.com            English, Japanese,
                                                               Korean

Fishtel                 Italy     www.fishtel.it               Italian, Spanish

Food and Beverage       Canada    www.foodandbeverage-         English
Network                           network.com
Food Market Exchange Thailand     www.FoodMarketExchange. English, Thai
                                  com
FoodChina.com           China     www.foodchina.com            Chinese, English,
                                                               Japanese

FoodExnet               Turkey    www.foodexnet.com            Arabic, Chinese,
                                                               English, French,
                                                               German, Italian
                                                               Japanese, Korean,
                                                               Portuguese, Russian,
                                                               Spanish, Turkish

FoodIT                  Denmark   www.foodit.net               English

FoodOnline              USA       www.foodonline.com           English

FoodPacific             China     www.foodpacific.com          Chinese, English

Foodservice             USA       www.foodservicecentral.      English
Central.com                       com
Foodtrader              USA       www.foodtrader.com           English

FrenchFoods             France    www.frenchfoods.com          English, French

Global Wine & Spirits   Canada    www.globalwinespirits.com English, French,
                                                            German, Italian,
                                                            Spanish

Greekproducts.com       Greece    www.greekproducts.com        English




Published     August 2005         Page 9 of 12          www.emarketservices.com
Greentrade              France    www.greentrade.net          English, French,
                                                              Spanish

Horeca-net.com          Spain     www.horeca-net.com          Spanish

Il-vino                 Italy     www.il-vino.com             English,French,German
                                                              ,Italian,Spanish

JCommerceRetail.com Belgium       www.jcommerceretail.com     Dutch, English

Meat and Poultry        USA       www.meatandpoultryonline. English
Online                            com
mundocatering           Spain     www.mundocatering.com       Spanish

PEFA.com - Pan         Belgium    www.pefa.com                Danish, Dutch, English,
European Fish Auctions                                        French, German,
                                                              Italian, Spanish

Pesca2.com              Spain     www.pesca2.com              English, Spanish

Pescastocks.com         Spain     www.pescastocks.com         English, Spanish

Pro-Wine                France    www.pro-wine.com            English, French, Italian,
                                                              Spanish

Quiminet                Mexico    www.quiminet.com            English, Spanish

Seafood.com             USA       www.seafood.com             English

soloalimentacion        Spain     www.soloalimentacion.com Spanish

SoloVending             Spain     www.solovending.com         Spanish

Tomatoland              France    www.tomatoland.com          English

Transora                USA       www.transora.com            English

Uvine                   UK        www.uvine.com               English

verticalwine            France    www.verticalwine.com        French

World Fish Site         Spain     www.fis.com                 English, Japanese,
                                                              Spanish

ZDI Online Marktplatz   Germany   www.zdi.de                  German




Published      August 2005        Page 10 of 12        www.emarketservices.com
3.4. Significant e-markets in the industry
To follow are Food and Beverage e-markets that are classified by e-market Services as
significant.

TRANSORA
www.transora.com
More than 50 large multinational companies are owners and users of Transora. These
include Unilever, Kraft, Pepsi, Coca-Cola, Mars, Kelloggs, Danone, Procter & Gamble, and
Bush Brothers. Operating in 7 languages, Transora has interoperability projects underway
with the e-markets CPGmarket and GlobalNetXchange (GNX). Transora customers include
GS1 Member Organizations, manufacturers, and retailers of all sizes. The e-market was
launched in 2000 in Chicago and has offices in Brazil, Mexico, France, and the United
Kingdom. On May 13th 2005, Transora and UCCnet agreed to form a single organization to
more effectively service companies seeking to realize the value of data and information.

AGRELMA
www.agrelma.com
Agrelma was established in 1999 by the European Commission DG XIII and now has over
3500 registered users. The Agrelma site not only lists food products but also agricultural
machinery and equipment. Agrelma provides logistic support and ratings of suppliers as a
supplementary services to their customers. In 2004 and 2005 Agrelma and the Italian
Institute for Foreign Trade (ICE) worked together to promote olive oil producers from the
various regions of Italy on the e-marketplace.

GLOBAL WINE AND SPIRITS
www.globalwinespirits.com
Global Wine and Spirits, based in Canada, is one of the largest e-marketplaces for wine and
spirits in the world. Created in 2000, the site counts hundreds of daily visitors and most of
them have regular transactions. GWS has been Webtrust certified. In 2003 Global Wine and
Spirits and the Italian Institute for Foreign Trade (ICE) signed a partnership agreement to
promote 100 wine producers from the various regions of Italy on the e-marketplace.

DAIRY.COM
www.dairy.com
Created in 2000, Dairy.com is a leading platform for the Dairy industry.
Representing over 80% of annual USA dairy sales, their member companies include
industry leaders Dairy Farmers of America, the Dannon Company, Dean Foods, Dreyer's
Grand Ice Cream, Kraft Foods, Land O'Lakes, Leprino Foods and Schreiber Foods.

TOMATOLAND
www.tomatoland.com
This B2B information and exchange site was designed by industry leaders in Europe, Asia
and the USA. With more than 1000 active members from 75 countries, it covers ‘everything
tomato’ from seeds to processed tomato products. The e-market is aimed at tomato growers
and processors, their suppliers and their retail and industrial customers.




Published   August 2005              Page 11 of 12            www.emarketservices.com
4.Sources and References
    The European e-Business Market Watch (www.ebusiness-watch.org). “E-Business
    in the Food and Beverages industry”
    Italian Institute for Foreign Trade (www.ice.gov.it)
    Eurostat, " Quarterly Panorama of European Business Statistics" and "European
    Business-facts and figueres 1998-2002" (www.europa.eu.int/comm/eurostat)
    Confederation of EU Food and Drink Industry (www.ciaa.be)
    UNCTAD, "E-commerce and Development Report 2004"
    e-market Services. Directory of electronic marketplaces
    (www.e-marketservices.com)




Published   August 2005         Page 12 of 12         www.emarketservices.com

				
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