1. Identifying and Overcoming Challenges to EU Market Penetration A Self-Evaluation Check List Kacer Project Conference Belgrade 14 June 2011 0

2. Agenda Opportunities & Challenges EU Market Profile EU Market Entry Check List How CIAA & Partners can help 1

3. Opportunities An attractive and lucrative EU food market – High income ( GDP/Capita - 2009) : EU : 31.213 $ vs. Serbia : 11.700 $ – A large well organized and well structured market – High and stable demand: high added value and discount products – Honey consumer price : 7 to 35 €/kg Successful presence of remote exporters – Commodities : oilseeds (Brazil), fruits & vegetables (Egypt), meat (Thaïland), … – Value added products : seafood (Costa-Rica), wine (Chili), honey (Mexico)  Why not a stronger Serbian presence ? 2

4. EU Honey Market Opportunities Consumption : 320.000 Tonnes/yr or 0,9 Kg/hab ; Imports : over 170.000 Tonnes/yr, mostly from China, Argentina, Mexico, …. Main opportunities for added value: Consumption rather than industrial Health and nature claims Monofloral Regional label By-products as well: gelly, propolis, pollen Source : CBI Survey (2009) : www.cbi.euwww.cbi.eu 3

5. Assets of Serbian Producers Production cost Quality – Serbian honey standards – the Kacer quality management set up “Regional” products: – growing EU tourism to Serbia – potential appeal of the Kacer label Ethnic segment, including Balkan “diaspora” Geographically proximity to EU: rail, truck 4

6. Challenges A highly competitive market : strong industry and heavy retail pressure A uniform yet diversified market : specific national & regional tastes Retail delivery procedures & standards Regulatory framework : – Food Safety standards ! – Consumer information 5

7. The EU Consumer About 400 million consumers Two high density, high income regions: the “yellow and blue bananas” Food : about 15% family budget in contra-cyclical spending Uniformity and yet national/regional taste differentiation Increasing importance of “service” : packaging, convenience, portioning, prepared meals, … Segments : BIO, ethnic, regional products, delikatessen, discount, up market, etc… Out-of-home versus home consumption Information requirements: contents, nutrition, health, traceability Increasing concern for health, nature, sustainability 6

8. Food distribution in the EU Retail dominance : – Over 80 % market share – Some 30 to 50% private label Several “secondary”, more capillary, channels : – BIO, – Ethnic, – Gaz stations, – Franchises, – Pop & Mom, – Hotels, restaurants & collectivities, … – Etc… 7

9. EU Retail Specifications Price : retail practices modulated by local legislation Quality : – Manufactured products : GFSI : BRC, SQFI, IFS – Agricultural Commodities : GLOBALGAP (EUREPGAP) Delivery : JIT, Back hauling, common stock, … IT 8

10. The EU Regulatory Environment The EU “Food Law”: focus on food safety – Horizontal Directives : ex. Dir. 178/2002 and the “Hygiene package” (Dir. 852, 853 and 854/2003) – Vertical Regulation : e.g. Animal Products, Fruits & Vegetables, Mineral Water, Chocolate, etc…. Consumer information: labeling, traceability, … Packaging : contamination, formats, recycling, Reach Import authorization procedures & trading policy: taxes, quotas, etc… 9

11. A Comprehensive Approach to the EU Food Market Successful entry into the EU market requires consideration of : – Target market : country, segment (income, taste,..) – Product positioning : image, attributes, pricing – Production: technology, capacity, flexibility – Distribution & logistics – Regulatory standards  A full blended export strategy ! 10

12. How CIAA & Partners can Help Providing support in : – EU Regulation monitoring and compliance – Retail procedures and standards – Market analysis – Distribution system design & assessment – EU trading policy intelligence – Setting up national or sector F&D trade associations – Accessing EU R&D and incentive schemes Links – CIAAwww.ciaa.bewww.ciaa.be – Cadmos/Arcadiawww.cadmos.bewww.cadmos.be 11

13. Thank you for your attention ! 12