Entering the European market for speciality grains with added value

2. Through what channels can you get speciality grains with added value on the European market?

There are several uses for the different speciality grains with added value. They can be sold directly to the consumer as flour, flakes or puffs to make various preparations. These products can also be used as an ingredient for the food industry, especially in the gluten-free segment. The HORECA (Hotel, restaurant and catering) sector also uses these products, including bakeries, healthy and ethnic restaurants.

How is the end-market segmented?

Figure 2: End market segments for speciality grains with added value in Europe

Source: Globally Cool

Food processing industry

The food-processing industry is a key segment for speciality grains with added value in Europe. The largest users within the food-processing segment include repackers, who repack flours, flakes and puffed grains in smaller packages for the retail market. The German company Ziegler Organic, for example, sells organic quinoa with added value (flour, puffs, flakes, etc) in different presentations and packaging, including 500gr consumer units with private label, 2.5 kg/5.0 kg units for catering, and 25kg and even 750kg big bags for industry.

Manufacturers specialised in healthy foods sometimes repack the product like packers do, to sell the puffs, flakes and flour under their brand. They also use the speciality grains with added value as an ingredient to manufacture other products. The German company Davert, specialised in organic, dried foods, uses quinoa flakes as an ingredient in their quinoa burger mix, and also sells quinoa flakes and amaranth puffs.   

Manufacturers of gluten-free products are key partners for flour suppliers since they use these as an ingredient. They might also repack the speciality grains with added value, such as puffs, flakes and flour, to sell them under their own brand name. The British company amisa, for example, sells quinoa flour, flakes and puffs, and also uses quinoa, amaranth, teff and millet flour as ingredients in other products, like their pancake mix, porridge or their crispbread.

Multinationals such as General Mills, Kellogg’s and Heinz Kraft sell gluten-free products in Europe and play an important role, as they are present in the main retail chains. Other key European gluten-free companies are: Dr. Schär, Damhert, Glutafin and Amy´s Kitchen.

Cereal manufacturers can also be interesting, as they often have several cereal variations that might include puffs and flakes of speciality grains. For example, the French manufacturer of organic breakfast cereals Favrichon currently has one muesli reference in their portfolio with quinoa. 

In this segment, packers and gluten-specialists offer the most opportunities for exporters of speciality grains with added value.

Retail

Physical retail is still dominant in food sales in Europe. Big supermarket chains are key actors, as consumers usually make their food purchases in this type of outlet. Today, you can find quinoa and amaranth products in the supermarket, as these are already popular enough to be relevant for these retailers. This will not be the first stop for newer products like teff or fonio, as they might not sell as much at the beginning.

The main retail chains in Europe are: Schwarz Group (Lidl and Kaufland, Germany), Aldi (Germany), REWE Group (Germany), Edeka (Germany), Tesco (UK), Carrefour (France), E-Leclerc (France), Les Mousquetaires (France), Sainsbury's (UK), and Auchan (France).  

For speciality grains with added value and products containing them, specialised retail might offer more opportunities. On the one hand, drugstores are increasingly widening their range of food products, focusing on healthy brands. The German drugstore chain Müller, for example, has several products with amaranth, quinoa and millet with added value, ranging from pre-cooked meals to puffed grains.

Many drugstores sell food products from brands specialising in organic or healthy products, and often carry their own private label, which might include puffs, for example. The private label is probably produced by a packer or a manufacturer that has its own brand and also offers private label. The drugstore chains do not import directly but work with suppliers in Europe.

Drugstore chains are strongly represented in Germany with DM, Rossman and Müller the biggest ones. Both DM and Rossman have sale points in several other countries, especially in Eastern Europe. Other chains are Drogisten Associatie (DA) in the Netherlands.

Figure 3: Healthy food section in a small outlet of the German drugstore chain DM

Source: Globally Cool

Independent stores, including organic and stores specialising in health products are also interesting outlets for speciality grains with added value. They need to differentiate themselves from bigger chains, and offering different or new products is a way of achieving this. As they are independent and small, you need a local partner to supply these companies.

Online retailers might have a small share in relation to physical retailers, but they play an interesting role in the retail of speciality foods, including speciality grains with added value. There are several vendors on Amazon offering speciality grains with added value, some of which were produced and packed in their country of origin.

Some online retailers that specialise in health products have a much wider product range than physical stores and have the chance to include several speciality products that fall into the health category. The Spanish company AMCORE BALANCE, S.L (Naturitas) currently offers value-added products from teff, quinoa, amaranth, millet and sorghum, from different brands. This company ships to 19 countries in Europe.

Online retailers will not import directly. You might need a partner to sell to them. In fact, some of them might not even carry any stock at all, but will pass the order to the importer so that they can ship it to the end-consumer (dropshipping). Other online retailers might carry the stock of the items that sell the most, while others might keep some of your stock in inventory.

Ethnic stores are interesting for suppliers of speciality grains with added value, as they cater to people interested in buying ethnic foods. These consumers might already know the traditional uses of your product and might be interested in buying it. The shops are independent and usually import directly. You can supply them through a distributor specialised in ethnic shops.

Food service

The foodservice channel (hotels, restaurants and catering) is usually supplied by specialised importers, wholesalers or Cash & Carry’s. The foodservice segment often requires larger packaging sizes of flour or puffs, such as 2,5 kg or 5,0 kg bags.

These companies are sometimes the same as the brands that supply the retail segment.

World cuisines and healthy food are the major drivers in the foodservice channel in Europe that affect speciality grains with added value. African restaurants might be interested in purchasing teff and fonio products, while organic or speciality bakeries might be interested in the flours.

Nevertheless, it is fair to say that this channel is not the most crucial in Europe for the sales of speciality grains with added value.

Through what channels do speciality grains with added value end up on the end-market?

Importers represent the most important channel for specialty grains with added value in Europe. The importers can be specialised in ethnic products or in healthy products. When the product is popular enough to be sold in bigger volumes, sometimes processors and packers might import directly.

Figure 4: Trade channels for speciality grains with added value in Europe

Source: Globally Cool

Importers / Wholesalers

Importers and wholesalers are usually specialised in ingredients for the food sector. Some importers might deal with a broader range of products including other dried products such as milling goods, grains, seeds and nuts.

These importers purchase directly from the producers outside the EU to supply various customers, ranging from processors and packers to manufacturers of finished food products.

In some cases, the importers might offer private label services to retailers. They might offer this service with their own infrastructure, or they might team up with a packer.

A significant trend involves the increasing demands that retailers place on their suppliers, including importers and food producers. These expectations set the tone for how the supply chain operates, starting from the top and going down to the producer. This pressure often leads to lower prices and more value, like making primary production more sustainable.

To be able to deliver goods under those conditions, importers are forced to find long-term suppliers in developing countries that can guarantee continuous supply and social and environmental sustainability. This is only possible through long-term cooperation. This is an opportunity for exporters that are willing to invest in productivity and sustainability.

Examples of bulk importers of speciality grains with added value are Nutriboost (the Netherlands), Naturkost Übelhör (Germany) or Haudecoer (France).

On the other hand, there are specialised importers selling ethnic foods. These are very interesting, especially for grains that are not as popular, such as teff and fonio, in comparison to quinoa. Very often these specialised importers import goods directly from origin or want to leave the added value in the country as part of their company values. Companies like Racines in France, specialised in ethnic food from Africa and Oceania, have processing plants in Senegal, Benin and Madagascar and import several flours directly.

Processor/ Packer

Processors and packers sometimes import the raw materials directly to further process or pack them if the quantities justify the operation. In the case of speciality grains with added value, some processors and packers might opt to buy the quantities needed from an importer instead of importing directly.

These processors offer private label services to retailers or other brands. Since private label goods perform very well in Europe, this is indeed an interesting market for speciality grains with added value. Nevertheless, direct contact with processors might only make sense for quinoa or amaranth products, as these are more popular at the moment.

Erbacher Food Intelligence is a German packer specialising in extruded products and grains and cereals with texture. Markal is a processor and packer of organic products in France, which also has several speciality grains with added value.

What is the most interesting channel for you?

Importers and wholesalers are key partners for the export of speciality grains with added value because they can handle the volumes needed. Importing at least a full container is fundamental to reduce the logistic costs to a minimum. Other actors in the value chain might not be willing to do so, because the volumes they use are too low.

You can combine flours and flakes in the container, but not all producers have both or not all buyers will necessarily order the two products.

In addition, the shelf life of flour or flakes is lower than the shelf life of grains. The storage of grains with added value is more difficult. Flour, for example, can absorb moisture and spoil or become hard. It is therefore not necessary to import a full container. You must also sell it timely to avoid any quality issues.

To what extent the importers might import the grains with or without the added value might also depend on the product. Pops, for example, are currently being produced in Europe because their transportation cost would be too high if shipped directly from origin.

Flour and flakes are feasible to transport by ship, and in fact, some importing companies are already doing this. Nevertheless, feasibility depends highly on the food safety and quality management of the exporting companies in the countries of origin. The facilities at the places of origin need to guarantee that the product is produced and stored properly so that it arrives in good condition. Potential problems are that the product absorbs moisture or becomes mouldy or rancid due to poor storage conditions.

Another consideration beyond safety is guaranteeing that the goods are gluten-free. If the importer is targeting the gluten-free segment, it must guarantee that the flour or flakes are not contaminated with any traces of gluten. If the company in the country of origin is milling other cereals in the same facility, the product will most probably be contaminated during production or storage.

The price is also a consideration. The processing of the grains to flakes and flour for direct export can be more price effective for the importer than importing the grains and processing the grains in Europe. This saves the potentially higher cost of electricity and labour in Europe plus the transportation of the grains to the processing company. To achieve this cost effectiveness, the companies in the countries of origin must have facilities and processes that allow them to produce effectively.

In conclusion, it is certainly viable to export flour and flakes to sell to importers, as long as your company is able to guarantee that the goods are processed, stored and shipped in a way that is safe, that maintains the quality and fulfils the requirements of the buyer, such as being gluten-free.

3. What competition do you face on the European speciality grains with added value market?

The leading suppliers of added-value grains form a diverse group with the main exporter being Thailand with 16.0 thousand tonnes in 2022, followed by the United States of America (5.86 thousand tonnes), Türkiye (5.37 thousand tonnes), India (5.08 thousand tonnes), Ukraine (3.71 thousand tonnes) and Serbia (2.96 thousand tonnes).

Source: UN Comtrade (2022)

Which countries are you competing with?

Since the HS codes for speciality grains with added value might include products from other grains different from those researched, the main competitors according to the statistics are not necessarily direct competitors. Thailand, for example, is a key supplier of rice products with added value, including puffed rice, rice flour and even pre-cooked rice, all in organic and conventional quality.

Key suppliers for the analysed grains with added value are:

• Quinoa products: Bolivia and Ecuador
• Amaranth products: Peru, Bolivia, India, EU
• Teff products: EU, Ethiopia, India and South Africa
• Sorghum products: India
• Millet products: India, EU
• Fonio products: West Africa

Leading suppliers export mainly products from non-speciality grains

The imports of speciality grains with added value from Thailand to Europe have been rising since 2018 with a CAGR of 17.25%, reaching over 16 thousand tonnes in 2022. Thailand is a big producer of rice products, which are an important product because it is gluten-free and low-cost.

Thai companies are currently able to supply good quantities of puffed rice, rice flour and even pre-cooked rice, all in organic and conventional quality.

Speciality grains with added value have a very different price point than rice products. Usually, manufacturers tend to use more rice and maize products and less speciality grains to maintain a low price of the finished good.

The case of the United States is similar. The imports of specialty grains with added value coming from the United States have been growing at 4.27% per year between 2018 and 2022, reaching 5.6 thousand tonnes. Nevertheless, the products being imported are mainly corn flakes.

The imports coming from Türkiye are mostly pre-cooked rice, while Ukraine and Serbia supply mainly corn flakes.

India supplies several products of sorghum, amaranth and millet

India is the third-largest supplier of European imports of specialty grains with added value. These imports peaked in 2021 at over 6 thousand tonnes and declined in 2022 to five thousand tonnes. From India, Europe mainly imports flours from speciality grains, which include flours from millet, teff, sorghum and amaranth.

India currently enters the European market with ethnic products such as sorghum and millet flour used for traditional preparations. On top of this, Indian suppliers are also tapping into the trend of healthy ingredients, especially with organic amaranth.

Good volumes and organic certification are key advantages of Indian suppliers over other countries.

Peru is a key supplier of quinoa and amaranth

Peru is very well known as a supplier of quinoa products in Europe. Peruvian companies also supply amaranth products, but in smaller quantities, simply because there is more demand for quinoa products.

Peru is well known in the European market for its “superfoods” which include several food products that belong to this category of “healthy ingredients” such as turmeric, chia seeds or maca. Quinoa and amaranth are key components of “Peruvian superfoods” and are well recognised in the market.

Peruvian companies have organic certified production and can supply to the “healthy ingredients” segment.

Bolivia is the quinoa pioneer

Bolivia was the pioneer exporter of quinoa to Europe and this has extended to quinoa and amaranth products with added value. As the Bolivians introduced quinoa to Europe, they are still sought-after as a supplier of quinoa products. This has also translated to amaranth.

The quinoa and amaranth industry in Bolivia is composed of a large indigenous population involved in the cultivation of the grains. In some cases, the producers are associated in cooperatives and might even be fair trade-certified. This is very compelling to European buyers that might be looking for a socially responsible supply chain.

On top of that, a lot of the quinoa and amaranth cultivated in Bolivia is certified organic, which matches the requirements of several buyers in the segment of “healthy ingredients”. 

Ethiopia is the main producer of teff

Ethiopia is the main producer of teff worldwide but this is not necessarily reflected in European imports. There are some Ethiopian teff products on the market, but European teff is slowly gaining market share, especially because European companies offer certified organic teff.

The government of Ethiopia had a ban in place for non-processed teff to avoid the price rises that happened in Bolivia and Peru with quinoa. This partially explains why teff products are not widespread in Europe. The ban has been lifted and companies can export teff with an export licence. Teff is generally being sold as dried grain to be prepared at home. The product is still mainly in the African cuisine niche.

Teff is a staple food for Ethiopians, so the main demand for the product is internal. For this reason, the production of teff products corresponds mainly with the local demand, which might be less demanding in terms of food safety management as compared to Europe. Nevertheless, some companies are exporting teff products, such as flour.

West Africa is the origin of fonio

Fonio is produced in West Africa, mainly in Guinea, Nigeria and Mali. The fonio products on the European market come from multiple West African origins, such as Guinea, Mali, Senegal and Benin.

As Guinea produces around 76% of the fonio worldwide, this country has the potential to increase exports of the product.

Nevertheless, as the product is still very unknown on the market, the volumes needed are still small and the opportunities are limited to companies that have a good food safety system in place and ideally are certified organic, so that they can tap into the “healthy ingredient” niche. 

EU has local production of all speciality grains except fonio

Currently, there is local European production of all the speciality grains discussed in the study except fonio. There are several millet products in Europe that come from local agricultural production and are preferred by consumers, who trust and support European agriculture.

There are also several companies in Europe selling teff flour and flakes from European teff, as well as from sorghum flour. Some European milling companies are processing the grains and selling the flour, puffs or flakes to the industry or retail. European production is still quite low in comparison with the production of teff in Africa or sorghum in India. Nevertheless, since the market for these products is so small, European production is a strong competitor.

Which companies are you competing with?

The main competitors change depending on the product. While India is a key exporter of sorghum, millet and amaranth products, Peru and Bolivia are the leaders in quinoa and amaranth. Ethiopia is the main teff supplier to Europe while several West African countries sell small volumes of fonio. 

Companies from India

Companies in India exporting millet, sorghum and amaranth products are very often trading companies selling a wide variety of other products. Om Shree International, for example, is a trading company selling a wide variety of Indian foods, including millet and sorghum flour among many other products.

This company is ISO22000 certified and currently sells to multiple countries in Europe including the United Kingdom, Belgium, Denmark, Germany, the Netherlands, Norway, Spain and Sweden.

The company Sakaria Trade Corporation is specialised in the trade of oats and oat products but also sells puffed amaranth, millet flakes and quinoa flour as well as other grains and flours. This company is ISO9000 certified and is currently exporting to Spain, Germany, France and the United Kingdom.

Very often trading companies might not be certified with a food safety management system, as they might not even come into contact with the goods. As long as the processor is certified, the buyer might agree to it. 

The company Organic Tattva is different from the other two, as it is a processor and exporter of a wide variety of organic products including millet flour. This company is not only certified organic but also BRCGS certified.

Competition among the many companies is considerable, which gives buyers an advantage when it comes to price negotiations. Also, European companies are more interested in direct trade with processors instead of having traders and brokers in between.

Companies from Peru

Exporters of quinoa and amaranth products in Peru are often medium-sized companies specialised in “Andean grains” and other food products. On the other hand, some international companies have sourcing operations in those markets for organic quinoa and amaranth products, among others.

The company Solid Food Global, for example, specialises in quinoa products, including puffs and flour. This company is vertically integrated from production to sales in Europe, where they have their headquarters.

The German importer Naturkost Übelhör also has a subsidiary in Peru, from where they source quinoa and amaranth products. The subsidiary produces a whole range of quinoa products with added value. Products leaving the Peruvian manufacturing facility are exported to France, Germany, the Netherlands and Spain, among others.

The company Consorcio del Valle on the other hand, is a 100% Peruvian company processing and selling a wide variety of foods, including quinoa and amaranth products. This company is Global Gap and HACCP-certified. Even though there is no standard HACCP certification, some auditing companies offer these audits, which are the minimum standard for processing foods.

Companies from Bolivia

Quinoa is one of the most important export products of Bolivia and the companies selling their products usually specialise in quinoa and amaranth, and products made from these grains.

The company Irupana Andean Organic Food S.A. is a processing company producing various types of food products based mainly on quinoa and amaranth in organic and conventional quality.

The company SumaJuira processes and sells organic quinoa and quinoa products, including flour, flakes and puffs. This company is ISO22000 certified and has been audited under the SMETA methodology to guarantee social responsibility.

Companies from Ethiopia

The company Lovegrass was established in 2016 with the purpose of exporting teff products. Currently, the company sells several types of teff mainly on the British market, where they have a sales and distribution operation.

The company G-link sells injera, a typical Ethiopian pancake used in traditional dishes and made of teff. This company also exports coffee beans and sesame seeds.  

Companies from West Africa

There are several companies from various countries in West Africa exporting fonio products. La Petite Damba from Guinea, for example, sells pre-cooked fonio through Saveurs du Pays, an importer in France specialised in African products. This company aims to sell Guinean products locally and internationally. Besides fonio, La Petite Demba exports palm oil, dried mango and powdered chilli.

Figure 6: Company video from La Petite Damba

Source: La Petite Damba YouTube Channel

The company Ets POULHO from Benin currently supplies the French retailer Vegg’Eat, specialised in plant-based foods with several fonio products.

La Vivrière is a Senegalese company producing fonio, millet and other products. This company currently sells several products, including millet flour and pre-cooked fonio to the Dutch company Unidex Holland, an importer and distributor specialised in ethnic foods. The product is packaged for the end consumer with the original branding of the company, targeting consumers with Senegalese roots.