The European market potential for fresh chilli peppers

European consumers are becoming more familiar with ethnic cuisines, which will contribute to the consumption of chilli peppers. Northwestern Europe offers the most potential for exotic chilli peppers, while Eastern and Mediterranean countries are more focused on traditional consumption and varieties.

1. Product description

The chilli pepper is the fruit of plants of the genus Capsicum. There are five domesticated species of chilli peppers, with different cultivars. In Europe, the mainly produced species is the Capsicum Annuum, which includes common red Cayenne pepper cultivar, and typical local varieties such as the Hungarian wax pepper (Hungary), the Pepperoncino (Italy), Piment d'Espelette (France), Padron and Ñora (Spain). More exotic peppers and other species are often imported.

Frutas Hortalizas provides an extensive overview of the Capsicum Annuum varieties.

Figure 1: Chilli pepper types and Harmonized System (HS) code

Source: Image of chilli peppers by Takeaway, CC BY-SA 4.0, via Wikimedia Commons

2. What makes Europe an interesting market for chilli peppers?

Diverse Foreign or ethnic populations have a positive influence on the demand for exotic chilli peppers in Europe. Non-European suppliers have a large share in the supply and are gradually seeing their market grow.

Rising import from outside of Europe

The supply of chilli peppers has increased by 50% in the past 6 years (2015-2020). Producers from outside Europe have a relatively large share in the supply of chilli peppers to Europe.

The European Union imported 46,000 tonnes from outside the EU in 2020, and the United Kingdom imports another stable volume of 6,000 to 6,500 tonnes annually. Morocco and Turkey are mainly responsible for this growing supply.

Imports from outside Europe are either counter-seasonal or special varieties intended for Asian and African consumers. Because the demand for chilli peppers is relatively stable and growing, you can expect the market to respond strongly to changes in supply. A short supply will result in high prices, and the other way around.

Ethnic diversity offers potential for chilli peppers

Ethnic consumption plays an important role in the demand for chilli peppers and their different varieties. The potential for chilli peppers in Europe increases due to a growing cultural diversity as well as a rising popularity for international cuisines.

Most European countries do not use chilies in their traditional dishes, except for specific regions in the Mediterranean and southeastern Europe. Such as the ‘piment d'espelette’ in the south of France or the ‘pepperoncino’ in Southern Italy.

Fresh chilli peppers are more often associated with non-European or ethnic foods: Asian, African and Latin American. European countries such as France, the United Kingdom, Spain, Portugal and the Netherlands, which have historical ties to tropical and subtropical countries, are naturally larger markets. This is due to their larger ethnic/non-European populations. Recent migrations, such as from the African continent to Italy, will also drive the growth of chilli consumption.

More than 35 million people in the European Union and almost 6 million people in the UK were born in a non-EU country. A multicultural society and different preferences throughout Europe provide opportunities for several varieties of chilli peppers and origins. The most common chilli pepper is the red cayenne chilli (Capsicum annuum). More exotic chilli peppers include, for example, the Bird’s eye chilli in Asian dishes, the African Bird’s Eye in East African dishes and the Scotch bonnet in West-African cooking (see table 1).

Table 1: Typical consumers of different chilli pepper varieties and their populations in Europe (2019)

*population data based on Eurostat (incomplete data) – actual populations are larger when including 2^nd and 3^rd generations

3. Which European countries offer most opportunities for chilli peppers?

The consumption of chilli peppers in Northwest Europe is mostly influenced by foreign cuisines, which puts France, the United Kingdom and Germany in the top five largest importers. Spain is both a producer and a consumer of chilli peppers with growing imports from Morocco. In the east, in Romania and Bulgaria, chilli peppers are part of the local food culture and get part of their supply from Turkey. Large retailers in western Europe are most strict on sustainable production and GlobalG.A.P. certification.

France: Leading importer with dominant supply from Morocco

France offers the largest market for chilli peppers from outside Europe. This supply has gradually increased from 11,300 tonnes in 2015 to 13,300 in 2020.

By far most is supplied by Morocco, with around 12,800 tonnes in 2020. There is also a smaller supply from other countries such as the Dominican Republic (215 tonnes), Laos (149 tonnes), Turkey (129 tonnes) and India (114 tonnes). Honduras is also gaining market share, from nearly no export to 67 tonnes in 2020.

Most chilli peppers are common red and green (cayenne) peppers. Cayenne pepper is a common spice in northern African cuisine and France has a large community of Moroccan people. Approximately 1 million of France’s inhabitants were born in Morocco. Another 1.4 million people came from Algeria.

In traditional French cuisine, chilli peppers are not very common, except for a local variety called the ‘Piment d'Espelette’ – a typical chilli pepper from the south of France. Other peppers include, for example, white and green peppers sold by the retailer GrandFrais. In wholesale markets and specialised stores, you will also typically find Habanero (‘piment lanterne’) and Bird pepper (‘piment des oiseaux’). On Mauritius and the French island Réunion, the bird pepper is used in many food preparations.

Despite the limited use of chilli peppers in the French kitchen, the ethnic diversity in France will keep up the demand.

Romania: Growing dependence on regional suppliers

Romania has a large consumption of chilli peppers and increasingly imports them from nearby Turkey. In Romania, chilli peppers are used in stews and goulash. The most common variety is the Romanian Hot Pepper (Capsicum annuum).

In 2020, Eurostat recorded a record import of 11,300 tonnes. Turkey is by far the largest supplier. In 2019, more than 70% of imported chilli peppers were supplied by Turkey. Proximity and price play an important role, but the varieties also probably match best with the Romanian preferences. The rest of the import is also mainly from suppliers in the region, such as Spain, Albania, North Macedonia, Greece and Bulgaria, among others.

The rising import volume in Romania shows the dependency on imported chilli peppers is increasing. Price and regional supply are important factors for the Romanian purchasing of chilli peppers.

Spain: Strong producer and consumer of chilli peppers

Spain is both a producer and importer of chilli peppers. The consumption mainly concerns red cayenne pepper (Capsicum Annuum) and a number of local varieties of the same species, although they are usually not as spicy as exotic varieties. Many of the Spanish chilli varieties are dried or preserved otherwise to extend their shelf life.

Common local chilli peppers in Spain include:

• the Padron, a green pepper with a varied spiciness,
• the Ñora, a small round sweet chilli originating in the Murcia and Alicante region and used as an ingredient in romesco sauce.
• The Pimiento Jaranda and Choricero for chorizo sausages and stews.
• Guindilla, a common term for chilli pepper, but often referred to the long (green) chilli peppers that are often pickled.

Spanish growers are an important source of chilli peppers, but Spain also increasingly uses the favourable climate in Morocco to fulfil the domestic demand.

Most non-European imports come from Morocco; 9,300 tonnes in 2020. Due to the Latin American population in Spain, there is also a minor import of (exotic) chillies from countries such as Peru (74 tonnes), the Dominican Republic (41 tonnes) and Honduras (31 tonnes). With the Latin American population in the EU growing, these chilli pepper varieties will gradually gain a bigger market share.

United Kingdom: More export opportunities after Brexit

The United Kingdom is an interesting market for exotic chilli peppers. A mixture of ethnic communities and British consumers that learned to like spicy food ensures a stable import.

Chilli peppers in the UK are used for a variety of traditional cuisines of Indian and Pakistani inhabitants, such as curries. These foods also appeal to a large number of Brits. Another large group that loves spicy food is immigrants from western Nigeria. For them, chilli peppers such as Scotch Bonnet, Cayenne or Piri Piri (African Bird’s eye) are considered essential for a high-quality life and strength.

The United Kingdom is an important buyer of chilli peppers originating from India, Uganda, Senegal and Kenya. Due to Brexit and the administrative burden, the import directly from origin will be preferred over the supply via trade hubs such as the Netherlands. This will provide more direct opportunities for suppliers in origin countries, especially when the shipments are relatively small.

Germany: Preference for nearby sources

German consumers are not known for eating spicy food, but the international population increases the potential.

In German food, the use of chilli peppers mainly consists of dried chilli, for example as a spice in meat processing such as sausages. Other than that, spicy food is rare. Much of the chilli pepper consumption could be related to the influence of international populations. Although specific data is lacking, Germany is known to have a significant number of Turkish and Asian people. Spicy peppers such as Habanero are available through Asian retailers such as Spice Village.

Turkey is Germany’s largest non-European supplier of both sweet and spicy peppers. The Netherlands and Spain are the most important suppliers within the EU. This shows that German buyers prefer to buy from sources nearby. Germany has room for growth in direct or indirect import of chilli peppers, but the preference for local will only grow stronger.

Bulgaria: Large traditional consumption

Bulgaria is a country with only 7 million inhabitants. Despite its size, the country is the sixth largest importer in Europe of chilli peppers from non-European suppliers.

Bulgaria has a number of local spicy foods that use chilli peppers, such as stews, soups and vegetable relish. The consumption per capita is high and, unlike many western European countries, related to the local eating habits.

The Bulgarian import mainly comes from Turkey (2,100 tonnes in 2020) and Greece (730 tonnes). Both countries are gradually becoming bigger suppliers. Like Romania, Bulgarian chilli pepper importers focus on regional suppliers. There is no import data for large distance suppliers.

4. Which trends offer opportunities or pose threats on the European chilli pepper market?

The increasing interest in exotic cuisines and healthy vegetables drive the market growth for exotic chilli pepper varieties. Local growers have also picked up on the cultivation, and are contributing to the promotion of chilli peppers.

More consumer interest in ethnic cuisine

A growing ethnic population in Europe is driving the consumption of chilli peppers, while at the same time their cuisines are having a significant influence on the rest of the population.

Traditional consumption of chilli peppers is most common in southern and eastern Europe, such as Spain, Portugal, southern Italy, Greece, Romania and Bulgaria. Although spicy dishes are less common in northwestern Europe, the ethnic communities and cuisines in this region offer the best potential to sell exotic chilli peppers.

Many non-ethnic consumers are willing to try ‘new’ products. European interest in cultural and fusion cuisines offer opportunities for suppliers of different varieties of chilli peppers besides the common red and green peppers, such as the Habanero, Jalapeño, Bird’s-eye (Asian and African), Madame Jeanette and even very niche varieties such as the Peruvian Rocoto and Ají Amarillo.

Asian supermarkets and international restaurants play an important role in increasing consumer knowledge and in the exposure of specific chilli varieties. As an exporter, you can also contribute to increasing the knowledge of buyers by participating in trade fairs. Companies such as Ngong Veg in Kenya have understood the importance of trade fairs and participated in the Fruit Logistica 2019.

The COVID-19 pandemic and lockdowns have resulted in lower demand from the food service industry and trade fair participation has been impossible, but this will soon change when fairs and restaurants are reopened.

European growers become interested in exotic chilli peppers

Exotic chilli peppers have also drawn the attention of greenhouse growers in Europe due to growing demand, but also to fulfil the demand for more sustainable chilli peppers. Local cultivation is considered a positive thing by retailers and consumers, but it can also contribute to the development of foreign supply. More supply can stimulate consumption.

The available varieties in Europe are increasing due to pioneering companies such as Westland Peppers in the Netherlands. Exotic chilli peppers such as the Jalapeño, Scotch Bonnet and the Naga Jolokia (Ghost pepper) are now grown in Europe. They are produced in Dutch greenhouses from April to November, and in cooperation with growers in Spain and Morocco for the remaining months.

The local cultivation may take away some of the opportunities for long distance suppliers, but authentic taste is an often heard argument of sceptic importers and traditional consumers for why they still prefer chilli peppers from tropical countries. The attention of European growers for exotic peppers can also be seen as an additional promotion for these products, which helps this niche market to grow. Thus, in the end, both suppliers in and outside Europe can benefit. The development of the local production will go hand in hand with increasing local consumption.

Greater attention to health food

Consumers in Europe are becoming more aware of healthy eating and are paying more attention to their diet. In addition to their function of adding flavour and spice to food, the health benefits of chilli peppers are gaining fame as well. Chilli peppers contain more vitamin C than oranges, and it is known to help the immune system as well.

By emphasising the health benefits, you can reach consumers that are looking to make their diet healthier. A good way to make your product more appealing to these consumers is by supplying organic chilli peppers. The demand for organic vegetables is growing every year. However, with the high risks for pests, organic cultivation will be far from easy.

Growing interest in sustainability

Environmental and social issues are becoming more and more important in the supply of fresh fruit and vegetables. Social and environmental certification schemes include actions aimed at sharply reducing and registering the use of pesticides, taking action to ensure the safety of employees and producing in a sustainable way.

Certification schemes that are recognised by the Sustainable Supply Chain Initiative (SSCI) or the Sustainability Initiative Fruit and Vegetables (SIFAV) will have a higher chance of being accepted by European supermarkets.

This study was carried out on behalf of CBI by ICI Business.

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