How to do business in the Iberian Market. Spain & Portugal

How to do business in the Iberian Market Spain & Portugal Marketplace International 2015 Growing the success of Irish food & horticulture AIDAN COTT...
Author: Jade Dalton
0 downloads 0 Views 1MB Size
How to do business in the Iberian Market

Spain & Portugal Marketplace International 2015

Growing the success of Irish food & horticulture AIDAN COTTER

Growing the success CHIEF EXECUTIVE

BORD BIA

of Irish28food & horticulture JANUARY 2009

Contents •

Spain - Market Facts



Market Dynamics



Spain - Export Performance



Product Suitability



Spain - Retail Overview



Pricing



Spain - Foodservice Overview



Routes to Market



Portugal - Market Facts



Challenges in the Market



Portugal - Export Performance



Targets for MP2015



Portugal - Retail Overview



Bord Bia Madrid



Portugal - Foodservice Overview



Sustainability

Growing the success of Irish food & horticulture

Spain - Market Facts 2014 GDP: €1,086 billion Real GDP growth forecast as 1.3% in 2014 and 1.7% in 2015 Population (2014e): 46M (including 5.5M non-nationals)

Low birth rate / aging Population: 75% over 25 years Urban society: >70% living in towns over 20,000 inhabitants Unemployment rate: 25% at 5.4M & 728,300 households with no income Strong regional identities and administrations (17), diff eating habits/gastronomy, diff purchasing power, regional nationalism/ local produce Languages: Castellano, Catalan, Galician & Basque VAT Rates: Basic food products 4%; Food 8%, Alcoholic 18%, Services 21%

Growing the success of Irish food & horticulture

Spanish Consumer Big into Fresh Produce: 50% of consumption Huge Enhancement of the Mediterranean diet: Olive oil, Fruit & veg, fish, dairy products Health/ obesity concern

Great interest in functional foods: Omega 3, folic acid, iron, cholesterol free… Little GMO/ organic & environmental issues concern 63% of Spanish consumers believe in buying local products Buying less more often- small packs Knowledgeable and demanding but…

VERY PRICE SENSITIVE

Growing the success of Irish food & horticulture

Spanish Market Relevance to Ireland 7th export market 3rd for Seafood

1st for Fresh Fish: 100% Irish megrims go to Spain 4th for Livestock Irish Beef sold in 4 main retail chains

Growing the success of Irish food & horticulture

Spain – Irish Exports Performance Irish Food and Drink Exports to Spain 2013: 198 mill €

Top Exports

Growing the success of Irish food & horticulture

Beef

62,935,744

Seafood

52,646,501

Dairy

49,710,837

Irish Presence in Spain 2 Meat companies with offices: AIBP, Dawn – another 3 represented 2 Seafood via agent 3 Dairy: IDB, Dairygold, Kerry Alcoholic Drinks : Baileys, Guinness, Murphy´s, Jameson…

8 Active Livestock Exporters 10 CFI companies exporting to Spain (with no market presence) Irish Retail Presence: Musgraves España & Dunnes Stores (2)

Growing the success of Irish food & horticulture

Spain - Retail Overview Grocery retail valued at €93.8 billion in 2014 (e) /consumer spent €1,894 per capita (-2.2%) The market remains very price-sensitive. PL accounts for 36% of sales. Supermarkets outperforms hypermarkets, as consumers seek convenience and proximity. Daily supermarket openings via franchises (18,000) Discounters are the only format growing sales together with internet

Retailers are investing extensively in their fresh ranges, counters and “price” image. Costco and Poundland (Dealz) first openings Regional retail chains outperforming national retailers

Source: IGD/Euromonitor 2014

Growing the success of Irish food & horticulture

Spain - Retail Overview Top 10 Grocery Retailers 2013 Retailer

Grocery sales 2013 % Change in IGD grocery retail (€m) grocery sales 12-13 market share 2013

Number of grocery stores 2013

Mercadona

18,395.4

3.9%

19.6%

1,467

Carrefour

8,174.9

-2.5%

8.6%

456

Eroski

5,160.0

-0.9%

5.5%

1,564

Alcampo (Auchan)

4,396.7

0.2%

4.7%

349

DIA

4,378.1

1.4%

4.7%

3,004

El Corte Inglés

4,066.9

1.9%

4.3%

370

Lidl

2,646.5

6.2%

2.8%

526

Consum

1,840.3

4.3%

2.0%

625

AhorraMas

1,404.0

2.1%

1.5%

251

SPAR

1,306.0

4.6%

1.4%

1,133

Note: excludes Cash & Carry and Members Club operations Source: IGD/Euromonitor 2014

Growing the success of Irish food & horticulture

Spain - Foodservice Overview Foodservice sector valued at €73.6 billion in 2013. Forecasted to decrease to €72.2 billion in 2014 due to ongoing crisis, however showing some recovery lately

Very fragmented- Approx 295,200 foodservice establishments in Spain (-1% vs 2012). Big percentage made of family owned independent restaurants and bars. Sector led by fast food chains and a couple of strong foodservice groups, followed by big hotel chains.

Trend towards reduced-price items (ie. McDonald’s, Pans & Company and Telepizza extending their offerings of €1items) and attractive low cost menus. Vouchers and loyalty cards to attract customers

Source: Euromonitor 2013

Growing the success of Irish food & horticulture

Burger King, lines of €1

Spain - Foodservice Overview Top 10 Foodservice Companies 2013

Rank

Company

Gross Sales 2013 (€m)

1

Mc Donald’s España (Grupo)

999,00

2

Burger King España, S.L.U.

520,00

3

Telepizza – Foodco Pastries Spain, S.L. (Grupo)

500,00

4

Áreas, S.A. (Grupo)

420,00

5

Grupo Zena - Food Service Project, S.L.

375,00

6

Grupo Vips – Sigla, S.A. (Grupo)

293,77

7

The Eat Out Group, S.L.

290,00

8

Casual Beer & Food, S.A.

274,00

9

Restauravia Grupo Empresarial, S.L (Grupo)

210,00

10

Comess Group de Restauración, S.L.

193,00

Source: Euromonitor 2013

Growing the success of Irish food & horticulture

Portugal - Market Facts Portuguese GDP 2014 – €194.9 billion Population: 10,813,834 people Unemployment rate: 16.8% (2013) Age Structure: 0-14 years: 15.9% 15-24 years: 11.4% 25-54 years: 42.2% 55-64 years: 11.9% 65 years+: 18.4% Languages: Portuguese (official), Mirandese (official, but locally used) New VAT rates 2014: Foodstuffs 6%; Alcoholic 23% Wine – 13%, Services 23%. *Special rates apply in the Azores and Madeira.

Growing the success of Irish food & horticulture

Portugal - Export Performance Irish Food and Drink Exports to Portugal 2013: 23.7mill €

Top Exports Beef

Growing the success of Irish food & horticulture

9,820,000

Beverages

4,410,000

Seafood

3,360,000

Dairy

2,290,000

Portugal - Retail Overview Highly concentrated: top 5 retail chains have 60% of market share Still strong hypermarket channel lead by Sonae and Auchan, however convenience stores expected to grow Highly competitive discount market: Aldi & Lidl expanding and DIA Minipreço fighting to remain market leader Consumers have become more frugal and cautious Local economy support: local buying strategies, highlighting provenance Fresh ranges will remain a key differentiator for retailers

Source: IGD/Euromonitor 2014

Growing the success of Irish food & horticulture

Portugal - Retail Overview Top 10 Grocery Retailers 2014 IGD grocery retail market share 2013

Grocery sales 2013 (€m)

Number of grocery stores 2013

Sonae MC

21.9

4,142.9

378

Jerónimo Martins Auchan Portugal (Jumbo)

17.3

3,261

429

8.0

1,511.5

32

ITM

7.1

1,363

285

Lidl Portugal

5.5

1,039.1

259

Leclerc

4.8

917.8

20

DIA Portugal

4.0

882

576

Aldi Portugal

0.6

107

80

Coviran SCA

0.4

96

250

Grupo El Corte Inglés

0.3

80.6

8

Retailer

Source: IGD/Euromonitor 2014

Growing the success of Irish food & horticulture

Portugal - Foodservice Overview

Foodservice sector valued at €6 billion in 2013

Over 80,000 foodservice establishments in Portugal. Portuguese consumer foodservice dominated by independent players, but facing increasing competition from leading brand chains Foodservice VAT rate went from 13% to 23% in 2012, the majority of players directly passed on the rise to end-consumers, resulting in a more expensive average ticket Social media revolution playing a crucial role in consumer foodservice with operators increasingly investing in digital marketing and solutions to engage consumers and improve customer experience.

Source: Euromonitor 2013

Growing the success of Irish food & horticulture

Portugal - Foodservice Overview Top 10 Foodservice Companies 2013 Brand

Global Brand Owner

Outlets

Lojas Tangerina

Galp Energia, SGPS SA

251

McDonald’s

McDonald's Corp

135

TelePizza

Telepizza SAU

112

Bom Bocado

Sonae SGPS SA

98

Pizza Hut

Yum! Brands Inc

96

Pans & Co

Agrolimen SA

57

Vitaminas

Multifood Lda

55

Eurest

Compass Group Plc

54

Loja Das Sopas

Starfoods SA

48

Companhia das Sandes

Starfoods SA

44

Happy Grill

Grill store Portugal

41 Source: Euromonitor 2013

Growing the success of Irish food & horticulture

Sustainability Private initiatives: Instituto para la producción sostenible: increasing consumption of products derived from renewable, recyclable and biodegradable raw materials Marketing tool: energy efficient outlets, recycling, reusable bags… Known due to “small fish” protection campaigns CSR Departments becoming more relevant as the consumer is starting to hear about it…

Growing the success of Irish food & horticulture

Market Dynamics: 2 Different Markets in one TOURIST

DOMESTIC • National brands, few imported products

• National brands + many international brands

• Large retail chains

• Local and independent retailers

• More traditional Spanish/Portuguese products

• More convenience products

• Lower margins • Supply directly from manufacturers, few distributors

• Higher margins

• Supply of imported products from distributors and International Cash & Carry/wholesalers

Growing the success of Irish food & horticulture

What are Retailers looking for? DOMESTIC RETAILERS

TOURIST RETAILERS

• QPS (Quality, Price & Service)

• Leading brands from key markets

• Innovation

(UK,Germany, Russia…)

• Convenience food (chilled)

• To cover a good product selection from several countries

• International cuisine's • Private label products

• Differentiation from national retailers and specialization.

• Competitive pricing

• Guarantee of regular supply

Growing the success of Irish food & horticulture

Routes to Market RETAIL SECTOR

FOODSERVICE SECTOR

• National Retailers

• National Market

- negotiating directly with national buyers

-directly with foodservice chains

- national listings

-via national distributors/Cash & Carry’s

- via national distributors

• Tourist Market

• Tourist Retailers

- negotiating directly with local buyers - via regional distributors

Growing the success of Irish food & horticulture

-via regional distributors -Cash & Carry’s

Retail- the cost of doing business Margins:

• •

Vary from 20-50% depending on product & retailer New supplier needs to be 10-15% cheaper than current supplier

Listing fees:

• •

Depend on margins, product & retailer. All expect a % of sales to be reinvested in promotional activities.

Promotions:

• •

BOGOF or free gifts are common % discount of next purchase

Growing the success of Irish food & horticulture

Things to know for the Iberian market Best time to pitch to buyers: February - March; (when the Christmas Campaign is over & they can start to make the plans for the rest of the year) Existing supplier negotiations: contracts are normally from Jan to Dec (legal requirement) “Seasonality” - Summer/Hot V´s Winter/Cold & its affect on Menus, Gastronomy, Consumer demand. Long lead times to get a listing (12-18 months) Branded products need local salesforce to visit all stores as planogrammes are rarely enforced

Growing the success of Irish food & horticulture

Potential Hurdles In Spain & Portugal Fragmented & expensive logistics in both markets – lack of centralised distribution for certain products Strong national food industry & preferences for national/local products Strong competition from other imported products

Pricing – Irish products not always priced competitively for the market High listing fees and promotional activity expected Products with short shelf-life can be problematic due to transport times

Spain & Portugal are unfamiliar with leading Irish brands

Growing the success of Irish food & horticulture

Recommendations for Doing Business in Iberia Research the market/analyse the category and competition Find the right partner/distributor Logistics solution in place before meeting the buyers and delivered price to market incl. agent /importers margin when required

If direct business, a Spanish/Portuguese speaking person to deal with the customer Patience: long lead times and small first orders Payment terms longer in Iberia (over 60 days, cash flow flexibility key) Personal contact important - develop relationship: visit market/ invite to Ireland Need to invest behind the product: positioning, promotions, tastings, etc

Growing the success of Irish food & horticulture

Targets for MP 2015 Over 50 buyers will be targeted in Spain/Portugal: Importers/Distributors: Tourist Areas & Mainland Spain Key Retailer buyers in your categories Key foodservice players Gourmet/Fine food retailers Organic/Speciality Distributors

Growing the success of Irish food & horticulture

For more information & services… Cecilia Ruiz, Manager – Meat & Livestock – [email protected] Roisin O’Sullivan, Consumer Foods – [email protected] Tel + 34 91 435 65 72

Growing the success of Irish food & horticulture