The Spanish market potential for fresh fruit and vegetables

Fresh fruit and vegetables is an important industry for Spain and their growing professionalisation in trade gives Spain the potential to take on a larger role as trade hub. Imports from non-European countries have been increasing, offering opportunities for products such as avocados, berries, fresh beans, lemons, mangoes and watermelons.

1. Country description

Located in the Mediterranean region on the Iberian Peninsula, Spain has an ideal climate for the production of a great variety of fruit and vegetables.

Spain is the fifth-largest country in terms of number of consumers, but in purchasing power per inhabitant it is 16% below the European average.

Table 1: Characteristics of Spain
    
 

Sources: CIA World Factbook; Eurostat; ITC Trademap

Doing business in Spain requires time in building interpersonal relations. Your negotiation and success are based on a sound relationship.

Keep in mind that Spain is a country that has many regional differences. Doing business in one region is not a guarantee that you will have a national coverage.

In the fresh fruit and vegetables sector Spanish buyers may not be as strict regarding paperwork as their northern-European counterparts. And while interpretations of European rules sometimes differ, buyers will appreciate fresh products with a good taste that fit the preference of Spanish consumers.

2. What makes Spain an interesting market for fresh fruit and vegetables?

Spain is a large producer of fresh fruit and vegetables. Their dominant role in the fresh sector has resulted in increasing imports with a larger volume from non-European countries.

Spanish supply is complemented by more imports

Spain has potential to become a trade hub for fresh produce from non-European countries. Most of the current exports concerns nationally produced fruit and vegetables, but with imports increasing Spain can develop additional commercial activities in international distribution and re-export.

Fresh fruit and vegetables is a very important sector in Spain, but also for supplying the rest of Europe. Spain holds 40.1% of Europe’s area of fruit cultivation and 17.3% of the vegetable cultivation area. Because of this large area Spain has the highest production share in Europe in oranges (54%), and small citrus fruit (67%), avocados (91%), watermelon (35%), peaches (37%), peppers (48%) and lemons (65%).

Because of its dominant position, Spain is a popular place for large European buyer groups. These buyer groups combine sourcing in Spain more and more with imported products. But also for national suppliers and cooperatives it is an advantage to be able to offer a year-round supply, for which they need foreign partnerships and import fruit and vegetables from other origins. This provides opportunities for non-European exporters.

The import value of fresh produce has increased significantly over the past years, especially in fresh fruit from non-European suppliers where value increased with 90% in the last five years.

Spain increases imports from non-European countries

Over the past years Spain has increased its imports from non-European suppliers faster than any other large European market. Up to 2018 Spanish imports continued to grow while most other countries stagnated. With this continuous growth Spain is likely to become more relevant for external suppliers.

Currently Spain is the fifth-largest importer of fresh fruit and vegetables from non-European countries. In 2018, Spanish import value was 1.9 billion euros, while the Netherlands was the largest with 3.9 billion euros (mainly for re-export), followed by large consumer countries United Kingdom (3.3 billion euros) and Germany (3.2 billion euros).

Spain has a strong growth of fresh fruit and vegetables from counter-seasonal country Peru, with increasing import value from 104 million euros in 2014 to 251 million in 2018. The Spanish season is also complemented with a higher trade value with Morocco, which reached 650 million euros in 2018. The most significant growth came from Egypt, from 0.3 million to 11 million euros (2014-2018; mainly oranges).

3. Which fresh products offer most opportunities in Spain?

Most commonly traded products are fruit and vegetables that are familiar to Spanish consumers, for example beans and lemons. But Spain also follows European consumption trends in healthy fruit, therefore avocados and berries are becoming more popular. Tropical fruits such as mangoes are also on the rise.

Table 2: Most relevant products exported to Spain, from non-European suppliers, in million euros and growth percentage

Source: ITC Trademap

Avocados

Avocados have not only become very popular with Spanish producers, but also with consumers. Avocados represent the highest value in the Spanish imports of fresh fruit from non-European suppliers. The continuous growth will maintain an optimistic market.

Spain consumes around 82,000 tonnes of avocados (based on recent statistics up to 2018). Spanish growers produced 61,000 tonnes and net avocado imports in 2018 were 21,000 tonnes (129,000 tonnes imported and 108,000 tonnes exported).

Over the course of five years Spain’s import value of avocados from avocado-producing countries increased with 152 million euros. Trade statistics show that these imported avocados are not only destined for Spanish consumption, but also distributed to nearby countries such as France, the Netherlands and Germany. This means that you can use Spain to reach other European markets for avocados.

Berries (raspberries/blueberries)

Europe has gotten a taste for berries such as raspberries and blueberries. The popularity of berries has boosted production in Spain, but is supported by imports. This has been most beneficial for growers in Morocco.

In 2018 24,200 tonnes of raspberries were imported, from which 19,700 tonnes came from Morocco. The export volume reached 54,700 tonnes.

Berries of the Vaccinium genus (mainly blueberries) were good for 17,400 tonnes import and 57,800 tonnes export. Morocco (12,500 tonnes) and Peru (2,300 tonnes) were the main suppliers.

Although their volumes are not great compared to other imported fruit, berries represent a high value in trade and some of the highest growth figures. The end of this growth is not yet in sight, but you can expect increasing competition from Spain, Morocco and integrated growers. For example, Spanish companies such as the Fresh Royal manage their own blueberry plantations in Morocco.

Beans

Fresh beans of the Vigna and Phaseolus varieties show a stable growth in Spain. Countries close to Spain are best positioned to supply the Spanish market. Beans other than the common green beans (produced throughout and nearby Europe) have most potential for producers further away.

Non-European fresh bean imports in 2018 had a value of 158 million euros, 60 million euros more than in 2014. Morocco dominates the fresh bean supply to Spain. The increase in value of Moroccan fresh beans (such as the long Perona beans) is much more significant than its quantity, which means that the prices for these beans have been going up. Most of the imported beans are destined for the local market.

Lemons

In the lemons and limes segment, lemons are mainly responsible for a regular large influx in imports. Spain is one of the world’s largest producers of lemons with more than one million tonnes annually. However, fluctuation in production determines the demand for imported lemons.

Spain is responsible for 75-80% of the European supply of lemons. Because of this dominant position you will encounter strong competition. But you will also find potential cooperation as an off-season supplier and when there are shortfalls in the Spanish supply. The demand for imported lemons was exceptionally high in 2016 and 2018. In these years Spanish lemon production was far from optimal.

Mangoes

Mangoes are both produced and imported in Spain. With these volumes combined, Spain is the second-largest distributor of mangoes in Europe (after the Netherlands). But you can also find opportunities as a mango supplier in local Spanish consumption.

With 36,000 tonnes Spain reached a record production of mangoes in 2018. In the same year a total of 53,000 tonnes were imported. Around two third of the total volume was distributed to mainly Portugal and France.

Spanish consumers have also grown a taste for mangoes and consumption almost tripled between 2014 and 2018. There is a preference for local tree-ripened mangoes (mainly Osteen variety), but also the amount of imported mangoes is increasing. The more expensive ripened, air-freighted mangoes from abroad can please the Spanish consumer, but due to its price has a much smaller target group. The total import value of mangoes with non-European origin doubled from 41 to 82 million euros (2018) in five years’ time.

Watermelons

Watermelons are a summer fruit showing strong growth in consumption across Europe. Spain is a major producer of watermelons, but complements its production with imports from other sources to meet the increasing European demand.

More than a million tonnes of watermelons are produced in Spain. Normally the Spanish export volume is between 60-70% of the production volume. In 2018 this increased to 80%. A higher production, as well as imports, contributed to the larger export volume. However, there is a still a steep contrast between the production of 1.1 million tonnes and the 95,000 tonnes that were imported.

Morocco and Senegal are the main suppliers of watermelons to Spain. Minor volumes between one and three thousand tonnes were imported from Brazil, Italy and Mauritania. The main window of opportunity is between April and June, just before the main production season in Spain.

4. What trends offer opportunities or pose a threat on the Spanish market for fresh fruit and vegetables?

Spain is growing an appetite for less traditional fruit and vegetables, which increases the need for imported products. Meanwhile the fresh sector and its distribution are becoming more professional, making the country more attractive for international trade and as an access point into Europe.

Shift from traditional demand to consumption of new fruits

The traditional consumption in Spain is expanding towards new and tropical fruits. Local growers have seen this as an opportunity and increased production, but foreign suppliers can also expect growing interest in imported fruit on the Spanish market.

According to industry sources Spain is traditional in its consumption, and this is still the case for the majority of Spanish consumers. People are most familiar with fruit and vegetables that are produced locally such as citrus fruit and sweet fruit including stone fruit, strawberries, figs and watermelons. However, as a large producer Spain also follows the wider European trends. For that reason the demand for new and tropical fruit is gradually increasing. For foreign companies, such as the South African Halls, it is a reason to have a sales office in Spain.

Price and quality (taste) are still leading purchase factors for consumers and until recently consumption was hampered by the increasing price level for fresh fruit and vegetables. But higher prices also gave way to a premium market in Spain and product innovation such as freshly cut fruit. Latest studies reveal that, besides affordable and tasty fruit, health and convenience have become important drivers for Spanish consumption.

Among the healthy fruits that are growing in demand are avocados, kiwis, pomegranates, blueberries and lemons. Tropical fruit that are increasingly purchased for their taste include mangoes, papayas and passion fruit. For some of these fruits Spain has a good production climate. The most exotic fruits are still often traded through specialised companies in the Netherlands such as pitahaya or physalis – these are niche products in Spain. However, you can expect export opportunities for different varieties to continue to increase in the years to come.

Professionalisation of the fresh sector

The fresh sector in Spain is professionalising at a fast pace to maintain their position in Europe. Besides its production power, Spain is advancing in well-structured logistics and the expansion of services and packaging solutions. This enables Spain to play a bigger role in international trade and will consequently offer better trade opportunities for suppliers from abroad.

According to some companies Spain is still lacking experience with imports and international sourcing, but with the arrival of several large buying centres for European retailers, Spain is becoming a trade hub for both Spanish and foreign fruit and vegetables.

On a national level the market share of large supermarkets with organised distribution is increasing and also here fruit and vegetables are much better represented than before. The challenge now is to keep focus on affordable prices without compromising the quality. This means over time the quality standards for imported fruit and vegetables will also become more important.

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

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