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6. Target Market Analysis Summary
As we have appreciated in the charts previews showed, Europe represent 25% of the worldwide honey market, for 2009 the market came up to 390,00 tonns of honey and 10,000 tonns of wax. It shows that Europe it’s a stable and constant growing maeket.
Taking in consideration that the Biggest Buyers of honey in El Salvador in the past years are:
Germany, Belgium and Costa Rica. We had chosen Germany and Belgium for our target market.
Even though Costa Rica is one of the biggest importer for our product and is closed to our country, we had excluded as target market because the past years Costa Rica had boosted their inner honey production, having as consequences the decline of El Salvador’s honey production import.
And in the other hand the export from El Salvador to Germany and Belgium has been increasing during the past few years. And if take in consideration that only Germany represent the 25% of the honey market in European Union which 48% comes from Developing Countries as El Salvador. We are heading to a big market that it will always be expanding.
We have to mention that El Salvador is between the 39 countries contemplated in the “Council Directive 2002/99/EC”. In which stipulate the regulation for products from animal that can be exported to UE.
In that section explain the ones that the income from “Honey is allowed in the EU” in which among others, El Salvador under the scheme GSP (Generalized System of Preference ) + with 0%
tariff rate, those countries that do not appear under that list cannot import honey to any country of the EU. And In the case of the source rule, El Salvador followed because the manufacturing and production of honey is wholly obtained in the country, on forms of monitoring specification to third countries see: Commission Decision 2004/432/EC.
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These specifications on the honey production are most worldwide standards in order to export the product. So it won’t effect on the expenses on the production of the honey.
6.1. Country Market Segmentation
Germany
8As the present chart shows, Germany has been a big market for El Salvador Honey productiont.
During the years Germany has been increasing the importation of honey to their market either for the industrial honey as well for the local direct consumes.
In the previews charts we can see that also some countries from Centro America has been a big customer for El Salvador Honey Production, but in the past few years they have increase they had boosted the local honey production, in order to get in to the worldwide honey market. Even though Germany it’s a big producers of honey still the consumption is too big in order to be held by their own production. Only Germany represents the 25% from the European Union total Consumption and 48% of their total import it’s from Developing Countries as El Salvador.
Germany Honey Consumtion
2005-2009 Respectively in thousand tonnes and kg
2005 2007 2009
Total Per Capita Total Per Capita Total Per Capita
312,071 0.64 324,923 0.66 309,933 0.63
8 Source European Union Minister of Economy 1,717,78
2005 2006 2007 2008 2009
US Dollars (in US Dollars Thousands)
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In the German Market it shows in the past few year and Stable Honey Consume. In the period 2005-2009 Germany have been one of the biggest Which indicate the market is constant and the Product is demanded in Bolk Consumer in the Eruope Union.
At the same time by been one of the biggest consumers in the region, it the best option to start the exportation on the conutry in order to get into the market and later on expand to others countries in the European Uion as: United Kingdome, Belgium among others.
Germany is by far the leading EU market for honey, with consumption amounting to 96 thousand tonnes in 2007 (30% share in the EU). Followed by United Kingdom, France and Spain. Per capita consumption differs greatly between EU countries.
6.2. Type of Product Market Segmentation
9Almost all the data found for the honey market in the Europeans countries it´s found as one big market and not an individual market per country.
But still we can observe that in the honey market we can find to type of segmentation. The main one which is the domestic use or direct, this one is represent in a 85% of the total honey market. This honey is the one you use at your home for your toast, sweet your coffee, tea or the ones that the Restaurants use for their salads, vegetables or prepare different types of food. The other segment we call it the industrial honey. Which is use in the food industry segment, this honey is the one you use in big industries and they use it to sweet their cereals, candies or bread.
This industrial honey is mainly used in the bakery, confectionery and cereal industries. It is particularly useful in baked goods. The moisture-absorbing quality of honey helps breads, cakes,
9 SOURCE. European Union MInister of Economy
85%
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cookies and candies stay fresh longer. Finally, honey also has a use in honey wine and several after-dinner liqueurs. Honey was tradinioally used in food preparations, but is now often replaced by sugar and sugar syrups. The honey which is used by the food industry is often of a lower quality than the honey used by households. Other industries using honey include the tobacco and pharmaceutical Industry, although these account for only a small part of the total demand for honey.
6.3. Market Trends
6.3.1. Natural Health Food EU consumers are increasingly intered in a healthy life style and, consequently, in the consumption of health food.Health food refers to food products, which are low in fat or even have calorie-burning properties and which have limited sugar and salt content.
This includes functional foods, which have specific health – promoting properties (e.g.
antioxidants) and food products with added vitamins and mineral, or bacteria supporting the intestinal function.
The increasing awareness of the importance of diet and nutrition, particularly among Western European consumers, has been accompanied by increasing concerns about the safety of food.
Recent food scandals and critical food research have led to a negative image of synthetically manufactured food (ingredients). Together with a higher appreciation of products from nature and a growing environment consciousness, this has made natural products more popular.
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Honey fits in well with the natural health trend. It is a completely natural product which has several health –promoting properties. Nevertheless, honey consumption does not expand under influence of the health trend. Honey has always been appreciated for its natural origin and its therapeutic as well as medicinal properties. The health trend emphasizes the value of honey again and strengthens sales to existing consumers, but does not cause significant increases in total sales.
It mainly helps to prevent substitution of honey by other bread spreads and sweeteners, such as jams, which are continuously improved and for which the assortment continues to expand.
6.3.2. Organic Food
Increased concerns about the effects of intensive farming on the countryside, as well as on the environment in general, have intensified interest in organic foods. Furthermore, organic food products also profit from the general interest in natural products , as they are perceived to be purely natural products. The organic trend has increased demand for organic honey. It is a trend which covers almost the entire natual product range of the food industry.
6.3.3. Fair Trade
Consumers are becoming more aware of the poor labour conditions in many conuntries which supply products to the EU. They are increasingly taking on the responsibility for fair prices. Fair Trade products guarantee that producers receive fair prices and are therefore in higher demand.
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Monofloral honeys, such as acacia, are becoming more popular in the EU. Especially in the leading EU markets, demand for these monofloral honeys is increasing at the expense of blended honeys (David Wainwright of Topical Forest Bee Products LTD, 2007). The largest growth in consumption is expected for these types of honey. However, there are significant differences in consumer habits and preferences in the various EU countries.
This type trends that we can find in the European Market are one of the reason that the European Market is suitable for our product. To start the exportation of a Industrial Type of Honey and then continue to a High Quality Gourmet Honey. The conscience on the benefits of honey as a natural sweeter in the European market, had raise the importation of the product. The Fair Trade policies that many European Union had adapted , had allowed to our countries to have a better trade with them and most of the time with a 0% tariff to enter the products, if they qualified with the specification off course. And By boosting the Monofloral Honeys, becomes a push forward to ide to pass next into the a High Quality Gourmet Honey with one type of blosson, the mango and the coffee one.
6.4. Target Customer Industrial Honey
For the Industrial Honey that we will be exporting the principal customer to target will be the:
Importers as:
o Fuersten-reform in Germany o Meli in Belgium
Packers
o Packers –Cooperative Bioland o Packers Walter Lang
o Apicola Chezelles Packers – Producers.
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This channels will use or honey for their best convenience. To them the honey will be sale by barrels. And the price will be settle depends on the market price of the honey at the moment of the transaction.
They use the honey for their own supplies or to offer our honey to other industries so they can use as a final product.
The importers,
usually combine the functions of import of honey in the EU processing, blending and packaging of honey. The Packers, most of the time they blend the most polyfloral honey into a honey acceptable table. Most low price honey end as private label products on the shelves of supermarkets.6.5. Target Costumers for Organic Gourmet Honey
In European Union we can find many stores, which import finish products from Developing Countries for the final consume. For the normal home consume honey as well for the Gourmet honey type. We have chosen this store in particularly due the experience of previews Beekeepers in dealing with them for their business.:
Germany Metro
Ahold
REWE in Germany
Delhaize Group in Belgium.
This are Whole Store located in those two countries that have experience in introducing honey made in Developing Countries. To this stores for example will be offering the Organic Gourmet Honey. At the same time by the use of a website we can export honey to different countries not only to those two countries in specific.
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6.6. Competitors
The numbers of Beekeepers in El Salvador is about 1,235. Eventhough this number tend to change depending on the source we use. There is not a exact number of companies or informal producers in the market. But still any iniciative in getting in the business have to be coordinated with CONAPIS (National Beekeepers Comission of El Salvador) and the MAG/IICA. Between the big companies that have the exportation quality, we can mentione:
Grupo VAPE
EXAGROLI
San Julian Export.
SCAES: (El Salvador Beekepers Cooperative)
Joyas de Cerén Honey.
Acapil
According to CONAPIS, there are about 9 honey export companies in El Salvador. They use almost 70% of their production to export. Therefore these companies still use small producers in order to cover their honey demands. By example, Joyas de Cerén only the 40% is from their own production the other 60% is from small producers.
These companies are representative by CONAPIS which will be one of our key partners, in order to get in touch with this companies and can export our honey thru them.
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