Nienhuis, J.T.

Poot, E.

English

Wageningen Yield 

Untitled Document
DUTCH FRUITING VEGETABLE GROWERS PREPARE 
THEMSELVES FOR FUTURE DEMANDS OF FOREIGN 
RETAILERS
British Retailers In Particular Expect Co-operation In The Supply Chain
Within the British food-retail trade, buyers of potatoes, fruit and vegetables (PFV) require that 
these meet high quality standards. In Germany, the emphasis was always more on quality for 
the lowest possible price until now. The competition that Dutch growers experience on the 
British market is mainly from British growers and Spanish growers. Owing to a competitive cost 
price and efficient logistics, The Netherlands as yet occupies an excellent market position on 
the nearby German market. Italy and Morocco are not serious competitors on the British and 
German markets compared to the fruiting vegetables from The Netherlands.
By Jaap T. Nienhuis and Eric H. Poot,
LEI, The Hague and Applied Plant Research, Naaldwijk, The Netherlands May 2001
 
Germany And United Kingdom The Most Important Export Destinations
In 2000, The Netherlands exported approx. 465 million kg tomatoes, 250 million kg sweet peppers and 
300 million kg cucumbers. Germany is the most important export destination for Dutch fruiting 
vegetables and the British market takes second place. The market share of Dutch tomatoes is 40% in 
Germany, that of sweet peppers 34% and that of cucumbers 51%. In the United Kingdom, the market 
share of Dutch tomatoes is 25%, that of peppers 67% and that of cucumbers 28%.
Scope of the German and British market for fruiting vegetables; market share Dutch product in 
both countries (1999)
Germany United Kingdom
Population 82 million 59 million
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Spending on fruiting 
vegetables
Market 
share*
Dutch 
product
Spending on 
fruiting vegetables
Market 
share* 
Dutch 
product
- Tomatoes
- Sweet 
Peppersas
- 
Cucumbers 
Total
NLG 1.480 million 
( 51%)
NLG 800 million 
( 28%)
NLG 620 million 
( 21%)
NLG 2.900 million 
(100%)
40%
34%
51%
NLG 1.250 million 
( 60%)
NLG 450 million 
( 21%)
NLG 400 million 
( 19%)
NLG 2.100 million 
(100%)
25%
67%
28%
*market share (based on volume) = import from The Netherlands / (total import + domestic production)
 
In Germany, the market for tomatoes and sweet peppers is expected to grow by approx. 2% in the 
next five years. In the UK, the demand for tomatoes will increase by 4%, while the demand for sweet 
peppers may increase by as much as 20%. The demand for cucumbers will decrease by 1% in both 
the UK and Germany.
 
British Food Retail Sets The Tone With Added Value
Supermarkets anticipate the wants and needs of consumers and can often function as a pioneer when 
new product varieties are introduced. Double-income families, single households and senior citizens 
are important target groups in both the United Kingdom and Germany. Consumers in the United 
Kingdom in particular are very interested in convenience food, health food and new varieties of 
products. In the course of time, people have become less and less apt to eating at home and at a 
certain time and more inclined to ‘grazing’ at any time of the day. In addition, consumers consider 
dining out or buying ready-to-eat meals or parts of meals as good alternatives for preparing a complete 
meal themselves. In Germany, consumers pay a lot of attention to the prices in the supermarket. One 
can observe on all points that supermarket chains in the United Kingdom are strongly focussed on 
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supplying the customer with as much added value as possible. In Germany, on the other hand, dis 
 
Germany United 
Kingdom
Market 
share Top-
10 
food retailers
84% 60%
Largest food 
retailers:
Edeka/AVA, Rewe, 
Aldi en Metro
Tesco, 
Sainsbury, 
Asda
Most 
important 
shop 
formulas
l     discount markets 
with limited 
shop floor space
l     ‘Verbrauchermarkten’ 
(1500 m2 or more)
large-scale, 
somewhat 
luxurious 
supermarkets
Investment 
level
relatively low relatively 
high
Opening 
hours shop
traditionally limited shops open 
in the 
evenings as 
well
Dominant 
competition 
strategy
price competition added value-
competition
A few characteristic features of the food-
retail sector in Germany and the United 
Kingdom
Therefore, they sooner offer possibilities 
for introducing new products and types of 
packaging on the German market. On 
average, supermarkets in the United 
Kingdom are open during more hours 
compared to Germany. British 
supermarkets offer a lot of convenience 
goods, ready-to-eat salads and they also 
carry organic products in their assortment. 
Furthermore, these supermarkets may 
offer vegetables that have already been 
washed and cut, and ‘value packs’ (various 
products for a meal in one package). The 
PFV department is clearly the frontpiece of 
British supermarkets. The assortment of 
PFV generally consists of a greater 
number of varieties compared to the 
German supermarkets, where the 
assortment is generally narrow and ‘basic’.
British supermarkets allow for product 
innovations within the PFV-assortment. 
Examples include tomatoes offered in 
various flavours.
 
Which Competitive Countries Do 
Dutch Growers Have Reason To 
Fear?
If we consider the amount and quality of 
the fruiting vegetables produced, then 
Spain is the country that The Netherlands 
should take seriously in terms of 
competition. British growers are only a 
competitor on their own domestic market.
The competitiveness of production 
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Homogeneity 
shop 
formulas
many different shop 
formulas; 
sometimes less 
recognisable formulas
clearly 
recognisable 
shop 
formulas 
Role of PFV 
in total 
assortment
relatively little attention 
paid to the
PFV assortment
much 
attention is 
paid to an 
appealing 
presentation 
PFV
(approx.15% 
sales floor)
Attention 
paid to 
organic 
products
relatively little relatively a 
lot (a 
maximum 
of 5% of the 
PFV-sales)
Nature of 
the PFV-
assortment 
- discount markets: pre-
packaged 
- ‘consumer markets’ 
and super-
markets: also sell 
unpacked products
emphasis on 
pre-
packaged
large 
number of 
varieties 
and types of 
packaging.
countries is determined by 1. the country’s 
ability to adapt to new market 
requirements, 2. the strength of the 
distribution chain (the extent of co-
operation within the distribution chain, 
among other things), 3. the degree of 
efficiency (price-performance ratio) and 4. 
the strategic potential (the ability to remain 
competitive in the long term as well). 
Regarding these four aspects, Dutch 
experts award the Dutch fruiting vegetable 
growers the highest score compared to the 
competitive countries. British supermarket 
chains, on the other hand, are much more 
positive towards what the Spanish growers 
(organisations) have to offer. The British 
appreciate the innovating ability of the 
Spanish growers, as well as the short lines 
between the buyers and the Spanish 
producers. Germany speaks well of what 
the Dutch growers have to offer. The 
Germans appreciate the flexibility the 
extensive know-how and the efficiency 
(cost price). The co-operation wit 
The German market has so far been 
served hand and foot where it concerns 
quality at a low price. Unlike the United 
Kingdom, Germany scarcely produces any 
fruiting vegetables of its own. While The 
Netherlands is an additional supplier for 
the English retailers, the country is the 
most important supplier for the German 
market during the growing season, 
allowing The Netherlands to acquire the 
position of preferred supplier in this cost-
conscious market. In the future, one will be 
able to observe the need for growers who 
have specialised themselves in their 
regular retail-buyers in Germany as well. 
Being able to meet the specific needs of 
buyers more adequately – quality, 
packaging and reliable logistics – is also 
important for the product traceability (food 
safety!). 
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PFV-
assortment 
in key words
low prices, no frills and 
‘basic’
convenience, 
health, 
grazing, 
special
Use of PFV-
cooling 
equipment
limited frequent
Spain is an important competitor of the 
Dutch fruiting vegetable growers on the 
British market. It is important that the 
Dutch growers develop a more permanent 
relationship with the British supermarkets 
by supplying these throughout the year.
The export of tomatoes, sweet peppers 
and cucumbers from Spain has seen a 
sharp increase in the 90s. In the five years 
to come, this increase will continue to a 
somewhat lesser degree: between 3% for 
cucumbers and 8% for tomatoes and sweet peppers. The export of tomatoes from Italy has strongly 
increased in the course of the 90s, which is especially due to the success of the truss tomato. Italy’s 
export of tomatoes appears to have stabilised and no further increase is expected in the years to 
come. The production area for tomatoes and cucumbers is decreasing in the United Kingdom, as many 
small enterprises have ceased to exist. Not surprisingly, one may expect a decrease in the production 
of between 5 and 10% up until 2005. The sweet pepper production, the extent of which is as yet quite 
modest, is expected to become more important.
In the United Kingdom, the larger production enterprises in particular are already focussed on 
supplying one or a few of the large supermarket chains. In terms of cost price, the British are no match 
for both Southern Europe as well as The Netherlands, whereas the quality of their products is not 
distinguishably better either. The market risk of niche products is often too high. Which is why the 
significance of the market focus strategy can be expected to increase even more. Product innovation is 
a strong point of the Italians by tradition (e.g. truss tomato). This will most likely remain the case. The 
cost price strategy will probably become less important for Italy: particularly due to the higher labour 
costs. The Italian export is not very efficiently organised at present, but this is expected to change 
under the influence of the European supermarkets.
Spain has acquired a strong competitive position in the past ten years on the basis of the low cost 
price strategy. Some Spanish co-operations are meanwhile capable of adequately meeting the high 
demands of European supermarkets. Not only with high-quality products, but especially with a high 
level of service. The years to come will see an increasing number of these companies operating on the 
basis of a market focus strategy. This is due to the increasing demand for such an approach on the 
one hand, and because competitors from Morocco or Turkey, for example, can supply the same at 
lower costs, therefore undercutting Spain and forcing it to abandon the cost price strategy.
 
Choosing a Competitive Strategy: Price, Quality, Chains And Niche Markets
Being an entrepreneur means making decisions. When making decisions, it is wise to follow a strategy 
of one’s own. The following strategies may help in determining a strategy to suit your company.
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1.  Cost price strategy. Growers who follow this strategy produce and market products of an 
acceptable quality at low costs. 
2.  Quality strategy. Growers who follow this strategy produce and market products of a high 
quality at an acceptable price. 
3.  Chain strategy, or market focus strategy. Growers who follow this strategy try to meet the 
requirements of their buyers as best they can. The participation in a closely organised chain is a 
prerequisite in this respect. 
4.  Niche strategy. Growers with this strategy focus on a special part of the chain and try to serve 
small, special market segments, or niches, with innovating products. 
Dutch growers of tomatoes, sweet peppers and cucumbers enjoy a strong competitive position on the 
European market. In order to maintain this position in the years to come, it is important that 
entrepreneurs opt for a favourable strategy, one that suits their own company. One option that holds 
perspectives appears to be the strategy of being of optimal service to a limited number of large buyers. 
A decision in favour of a strategy of this kind does entail having to give up part of one’s freedom in 
making decisions concerning the production and sales. In exchange, the entrepreneur will be given 
guarantees regarding the sales and the prices and can participate in a strategic co-operation with 
possibilities for growth.
The shift towards the chain strategy is the strongest in the UK. Due to the strong position of the 
discount markets, the cost-price strategy remains very important in Germany. But a shift to the chain 
strategy can be expected in Germany as well, in response to problems with BSE, for example.
Because the standard of living has increased, there will be an increasing demand for higher quality 
products for example, while the price becomes less important. Another development is the increasing 
demand for food that is guaranteed safe. Supermarkets will only be able to meet this demand if they 
are certain of the origin of the products. This can be more easily organised if a chain strategy is 
followed in realising the production.
 
Strategic options for individual Dutch Grower-Entrepreneurs
There still remains a considerable market for fruiting vegetables at an acceptable (low) price. The 
(German) discount markets in particular will continue to demand this type of product. Some of the 
Dutch growers will be in an excellent position to supply these products. Particularly the larger 
companies, which are able to make the most of the economies of scale of their company with a good 
labour organisation. By increasing production and saving on energy and labour in particular, they 
control the cost price. The relatively short lines to the market and the efficiently organised logistics 
ultimately result in a competitive chain cost price. 
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British retailers have initiated the market focus strategy. On the British market, Dutch growers meet 
with competition from the local production and from a few Spanish co-operations in the spring and 
autumn. All the same, expectations are that there will still be enough room for products from The 
Netherlands. The growers who wish to operate in accordance with this strategy adapt their production 
planning to the wants and needs of the buyer. An important aspect of this is that they offer products of 
a constant quality all year round. This can be realised with assimilation lighting or production abroad. 
The daily production activities and sales activities are directed from the chain. The quality of the 
product and the production process must come up to the needs of the buyer; Eurep-Gap norms are 
standard in this respect. Comparatively speaking, the cost price is less important with close chain 
relationships and made-to-measure added value. It is essential that one is associated with an 
The grower who opts to operate in an integrated chain must be flexible and extremely customer-
oriented. His freedom of decision concerning production and sales decreases. In exchange, he will be 
given guarantees regarding the sales and the price. And perhaps at least as important: he will be part 
of a strategic co-operation, with a clear growth potential for the future.
In short, the Dutch growers will have to stay alert if they are to continue to adequately respond to the 
current demands of their international buyers in the future.
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Dutch fruiting vegetable growers prepare themselves for future demands of foreign retailers: British retailers in particular expect co-operation in supply chain May 2001

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Dutch fruiting vegetable growers prepare themselves for future demands of foreign retailers: British retailers in particular expect co-operation in supply chain May 2001

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