Entering the European market for birdhouses

Restricted chemicals: REACH

The REACH regulation (EC 1907/2006) lists restricted chemicals in products marketed in Europe.

Restricted chemicals in the production of birdhouses include:

• Lead in the paints and glazing of ceramics.
• Arsenic and creosotes as wood preservatives.
• Azo dyes and certain flame retardants (e.g. TRIS, TEPA and PBBs) for textiles.

Intellectual property rights

When you develop products, you have to make sure you do not copy existing designs. Intellectual property (IP) is protected in Europe, and products that violate IP rights are banned from the market. The European Commission’s IP action plan gives European companies easier access to fast, effective and affordable protection tools.

Packaging legislation

The Packaging Directive (94/62/EC) aims to prevent or reduce the impact of packaging and packaging waste on the environment. Buyers may therefore ask you to minimise the use of packaging and/or use sustainable materials.

According to the Circular Economy Action Plan, all packaging on the European market should be reusable or recyclable in an economically viable way by 2030. A new Packaging and Packaging Waste Regulation (PPWR) is being drawn up to help achieve this.

Europe also has requirements for wood packaging material and dunnage (WPM) used for transport, such as packing cases and pallets. The goal is to prevent organisms that are harmful to plants or plant products from entering and spreading within the EU.

Corporate Sustainability Due Diligence Directive and Forced Labour Regulation

The Corporate Sustainability Due Diligence Directive (CSDDD) and Forced Labour Regulation (FLR) are two important pieces of upcoming Green Deal legislation. In 2022, the European Commission adopted a proposal for a CSDDD. This requires larger companies to identify and prevent, end or reduce any negative impacts of their activities on human rights and the environment, in both the company’s own operations and its value chains. This means that the new rules may apply to you indirectly through your buyers. The proposed FLR bans products made with forced labour. 

As these proposed laws still need to be finalised, their exact implications are not clear yet. Nevertheless, you should familiarise yourself with them and prepare for their rollout.

Green Claims Directive

Another upcoming law is the Green Claims Directive. In a recent European website screening, many green claims were believed to be exaggerated, false or deceptive. Companies pretend to be doing more for the environment than they really are by this ‘greenwashing’.

 In 2023, the European Commission proposed a Green Claims Directive to:

• Make green claims reliable, comparable and verifiable.
• Protect consumers from greenwashing.
• Contribute to a circular and green economy.
• Help establish a level playing field.

What additional requirements do buyers often have?

Buyers often have additional requirements on:

• Sustainability
• Crystalline silica
• Labelling and packaging
• Payment and delivery terms

Sustainability

Social and environmental sustainability are becoming more important in the European HDHT market due to buyer and consumer values and Green Deal legislation. Environmental sustainability focuses on your company’s impact on the environment, for example via raw materials and production processes. Social sustainability focuses on your company’s impact on the wellbeing of your workers and the community. Key topics include fair wages and safe working conditions.

You can highlight your sustainable activities and policies in the ‘story’ behind your product and company. Buyers appreciate good storytelling that evokes an emotional response.

In addition to legal compliance, a growing number of European buyers would like you to comply with: 

• Business Social Compliance Initiative (BSCI): an initiative of European retailers to improve social conditions in sourcing countries. They expect their suppliers to follow the BSCI Code of Conduct.
• Ethical Trading Initiative (ETI): an alliance of companies, trade unions and voluntary organisations. ETI aims to improve working conditions in global supply chains through their ETI Base Code of labour practice.
• Sedex: a membership organisation that strives to improve working conditions in global sourcing chains. The Sedex platform lets you share your sustainable performance based on a self-assessment.

Figure 1: BSCI-compliant bird feeder

Source: Esschert Design @ YouTube

You can learn about sustainable options from standards like ISO 14001 and SA 8000. However, only niche market buyers demand certification.

If you adhere to such initiatives and standards, this may help your buyers comply with the proposed CSDDD and FLR, which require proof of sustainable practices.

Crystalline silica

Respirable Crystalline Silica (RCS) can cause lung cancer through inhalation. The ceramics industry mostly uses crystalline silica in the form of quartz and cristobalite. European buyers care about worker safety and may demand good handling of crystalline silica during production.

Labelling

The information on the outer packaging should match the packing list sent to the importer.

Outer packaging labels should include:

• Producer name
• Consignee name
• Quantity
• Size
• Volume
• Caution signs

Your buyer will specify what information they need on the product labels or on the item itself, such as logos or ‘made in’ information. This is part of the order specifications. EAN or barcodes are commonly used on product labels in Europe.

Packaging specifications

Importer specifications

You should pack birdhouses according to the importer’s instructions. They have their own requirements for packaging materials, filling boxes, palletisation and stowing containers. Always ask for the importer’s order specifications, which are part of the purchase order.

Damage prevention                                                                     

Proper packaging minimises the risk of damage caused by shocks. How items are packaged for export depends on how easily they can be damaged. Packaging should ensure that the items inside a box cannot damage each other. It should also prevent damage to the boxes when they are stacked inside the container. Packaging therefore usually consists of inner and outer cardboard boxes. The inner boxes are filled with protective materials or partitioned with corrugated cardboard.

If you produce wooden objects, you must properly dry the wood after production to prevent mould or cracks. Condensation inside containers during transport can also cause mould. This is due to humid air that becomes colder at night and warmer during the day. Good ventilation can prevent this, so you should inspect containers for air holes before shipment. You can also place products that reduce humidity in with the cargo. Make sure to follow the importer’s instructions.

Dimensions and weight

Packaging must be easy to handle in terms of size and weight. Standards are often related to labour regulations at the point of destination and must be specified by the buyer.

Cost reduction

Boxes are usually palletised for transport, and you should maximise the use of pallet space. Consider this when designing your products.

Packaging must provide maximum protection, but you must also avoid using excess materials or shipping ‘air’. Waste removal is a cost for buyers.

You can reduce the amount and diversity of packing materials by following these tips: 

• Partition the boxes using folded cardboard.
• Match inner and outer boxes by using standard sizes.
• Consider packing and logistical requirements when designing your products.
• Ask your buyer for alternatives.

Material

Importers are increasingly banning wooden crating and packaging. Economical and sustainable packaging materials are more popular. Using biodegradable materials can be a market opportunity. Some buyers may even demand it.

Consumer packaging

Birdhouses are usually supplied without packaging at the retail level. This allows consumers to choose between different designs, materials and sizes. You may have to provide appropriate packaging for flat-packed birdhouses and kits.

Payment and delivery terms

Payment terms are usually confirmed in the buyer’s order contract. They vary from buyer to buyer and are related to the volume and value of the order, the type of distribution partner, whether or not an agent is involved, and what delivery terms apply.

Delivery terms, known as Incoterms, depend on the type of distribution partner. HDHT importers generally prefer Free On Board (FOB) or Free Carrier (FCA) arrangements.

What are the requirements for niche markets? 

Fair-trade practices and sustainability certification are the most common niche market requirements.

Fair trade

Fair trade focuses on fair pricing and better social conditions for producers and their communities. Fair-trade certification can give you a competitive advantage, especially if the production of your items is labour-intensive. It often includes aspects of environmental sustainability too.

Common fair-trade labels are the World Fair Trade Organisation (WFTO) Guarantee System and Fair for Life certification. However, for most fair-trade oriented buyers in Europe complying with WFTO’s ten principles of fair trade is enough.

Source: Wildlife World @ YouTube

2. Through which channels can you get birdhouses on the European market?

Birdhouses reach the European market through importers and wholesalers that supply to retailers, as well as retailers that buy directly from suppliers. 

How is the end market segmented?

The European birdhouse market consists of low, mid and high-end/premium segments.

Figure 4: Birdhouse market segmentation in Europe

Source: Globally Cool, GO! Good Opportunity & Remco Kemper

Low-end market

The low-end segment focuses on accessible prices and basic designs. Typical retailers include hypermarkets such as Lidl, as well as garden centres. Since this segment is dominated by low-cost and mass-produced items, opportunities are limited for smaller manufacturers. Instead, you should focus on the mid to high-end market.

Mid-end market

The mid-end segment follows trends, combining functionality and style. Prices are reasonable to appeal to consumers who want value for money and a functional but decorative birdhouse. Craftsmanship, natural materials and sustainable values play a role in the higher mid-end segment. Bird and nature conservation organisations like the RSPB focus mainly on functionality. Their nest boxes are often made of sustainable wood or woodcrete and are designed with birds’ needs in mind. Homeware and lifestyle stores like Søstrene Grene generally provide more decorative items like ceramic bird feeders.

High-end/premium market

At the higher end of the market, birdhouses often either excel in term of decorative value or functionality and durability. For example, true birder watchers can opt for hi-tech solutions like Nestera’s PEFC-certified cedar wooden bird box with solar-powered WiFi camera system.

Through which channels do birdhouses end up on the end market?

Market access channels for birdhouses mainly follow the traditional HDHT patterns. Importers and wholesalers supply to retailers. Larger retail chains often bypass importers and wholesalers and import for themselves, while an increasing number of smaller retailers have also started buying directly from suppliers. In some cases, buying agents play a role.

Figure 5: Trade channels for birdhouses in Europe

Source: Globally Cool, GO! Good Opportunity & Remco Kemper

Importers/wholesalers

Importers and wholesalers sell products to retailers in their own countries or re-export throughout Europe. Supplying to buyers in the project market is another distribution flow for them.

Importers and wholesalers handle the import procedures. They take ownership of the goods when they buy from you, taking on the risk of the onward sale of the products, unlike agents. Developing long-term relationships can lead to a high level of cooperation on appropriate designs, new trends, use of materials, types of finishing and quality requirements.

Importing retailers

Retailers come in many sizes: large and part of a chain, or small and independent. Larger retail chains often import from suppliers in developing countries directly. Many even have buying offices in developing countries. Others – mainly smaller independent stores – order from wholesalers in Europe.

There is a tendency towards consolidation in European retail. Large retail brands are becoming more widespread and more ‘lifestyle-centred’, offering home decoration, textiles and fashion accessories.

Buying agents, buying houses and sales agents

You can encounter several types of intermediaries when doing business with European buyers:

• European buying agents represent European buyers in sourcing countries but do not import products themselves. Sometimes, they have a more limited role, like checking the quality of the products. They can work individually or as part of a purchasing company. 
• Buying houses are comparable to buying agents, but they are based in your country and usually offer more services. These can range from sourcing raw materials to designing and sampling services.
• European sales agents can help you find European buyers. However, you should be careful before entering into agreements with commercial agents because European legislation protects their position.

Agents and buying houses mostly work on commission. They may approach you, or your buyer may request an intermediary. However, you should always try to work with your buyer directly. This saves on commission and allows you to communicate directly with your buyer.

E-commerce

E-commerce has grown in recent years. The easiest way to benefit is by supplying a European wholesaler or retailer with a strong online presence. This is usually not a separate channel. Retailers often combine online and offline channels, and the way of supplying to them is the same. Companies that only sell online also need to take stock before they can sell.

What is the most interesting channel for you?

Importers and wholesalers are the main channel between exporters in developing countries and European retailers. They are interesting if you want to develop long-term relationships. These importers usually know the European market well, so they can provide you with valuable information and guidance on market preferences. They generally prefer FOB or FCA Incoterms.

Figure 6: Incoterms

Source: Globally Cool, GO! Good Opportunity & Remco Kemper

Large retailers are increasingly importing for themselves to cut out the margins involved with importers and wholesalers, reduce time to market and have more control over product design and finish. This creates opportunities. Smaller, independent retailers need to differentiate from retail chains on value-added service, specialised offers and authenticity. Buying directly from producers in developing countries is an interesting way to do so. They typically prefer small order quantities for each item, small total order volumes and delivery to their doorstep via Delivered Duty Paid (DDP) or Delivery At Place (DAP). Repeat orders are less likely.

The trend of direct sourcing is expected to continue. This may create more opportunities for you, as a growing pool of buyers could improve your bargaining position. Because importing retailers order for their own shops, they can place orders much quicker than importers and wholesalers, who may need to show their retailers samples. You need to calculate if trading with retailers directly is cost effective.

3. What competition do you face on the European birdhouse market?

China is Europe’s leading decorative object supplier. A lot of these supplies are mass-produced items for the lower-end segments. Instead of competing with mass-producing companies, your best opportunities are in the mid to high-end segments. There, you compete with suppliers from countries like India, Vietnam and Poland.

China is by far Europe’s main supplier of decorative objects, including birdhouses, making up 49% of imports in 2023. Germany follows at some distance, with 5.5%. Next on the list are India (3.9%), the Netherlands (3.9%), France (2.2%) and Vietnam (2.0%).

Which countries are you competing with?

Source: UN Comtrade

China dominates the (low-end) market

China is the leading supplier of decorative objects – including birdhouses – to Europe by far. However, its supplies plummeted from a peak of €2.1 billion in 2022 to €1.4 billion in 2023. This translated to an average annual rate (CAGR) of -0.5% from 2019 to 2023, and a direct import market share that fell from 58% to 55%. China mainly supplies the lower-end market, often with plastic objects.

China benefits from its large-scale and highly mechanised production systems, low-cost workforce, availability of raw materials, and efficient shipping to Europe compared to other Asian countries. However, rising labour costs over the last ten years have affected its price competitiveness. In the coming years, China’s trade war with the United States and other disruptions may affect exports.

To avoid competition from Chinese suppliers on costs, you should make your product offering stand out and stay away from mass-produced objects. Focus more on handmade products, sustainability, materials and the story behind your product. Smaller European importers are increasingly looking for suppliers in other Asian countries, such as India, Vietnam, Indonesia and Thailand. They want to diversify their collection and become less dependent on China as a single supplier. This is also true for importers whose designs require handwork.

India’s exports fluctuate

Offering skilled labour and transport at competitive costs, India is well-positioned to take a bigger share of the market. After peaking at €154 million in 2022, Indian supplies of decorative objects to Europe returned to €104 million in 2023. This translates to an average annual rate (CAGR) of 2.0% between 2019 and 2023. Most of these exports are metal objects.

India has a rich craft culture with an abundance of producers and easy access to natural materials. This allows India to target higher market segments than China with its mass-produced products. India also offers an effective combination of handmade and mechanised production techniques. More and more Indian suppliers are complying with standards related to social and environmental sustainability and investing in relevant certifications and labels.

As it becomes more difficult for buyers to order short runs from China, India is becoming a popular alternative, especially since European lifestyle buyers already source broad HDHT collections from India and are increasingly able to do one-stop shopping.

Vietnam is another low-cost producer

Like suppliers from China, Vietnamese manufacturers are very productive and can produce at low costs. Their exports of decorative objects to Europe peaked at €113 million in 2022 before dropping to €66 million in 2023. This resulted in a CAGR of -2.6% between 2019 and 2023. Most of these objects were ceramics and plastic items.

Vietnamese suppliers generally have a good idea of what is commercial and trendy. This is because Vietnam’s HDHT sector has been working with the European market for decades. They effectively combine handmade and mechanised production and can cater to a wide range of lower and mid-end markets. As such, they have become an effective second-sourcing alternative to suppliers from China. They are also increasingly adopting socially and environmentally sustainable practices.

Poland is an important regional supplier

As an Eastern European country, Poland benefits from being located close to the Western European market. This allows suppliers to offer short delivery times. At the same time, labour is relatively affordable compared to Western Europe. Suppliers have a good understanding of European consumers and have well-established and efficient production lines. Products that are ‘Made in Europe’ are also increasingly popular. This makes Poland an attractive partner in the move away from Chinese sourcing.

Poland steadily increased its exports of decorative objects to Europe until peaking in 2021. They returned to €53 million in 2023, which is comparable to 2019. This makes Poland Europe’s seventh largest supplier of decorative objects.

Most of Poland’s decorative object exports to the European market are made using plastic or ceramics. They mainly compete in the more price-sensitive lower and lower-middle ends of the market. Instead, you should focus on higher-end segments through natural and sustainable materials, special design value, craftsmanship and the story behind your product. Make sure you offer a high level of service to build strong, lasting relationships.

Which companies are you competing with? 

The following companies are examples of the type of competition you will face in the European market for birdhouses.

JNDP Crafts, Bangladesh

JNDP Crafts handmakes products for the home and garden. The company works according to fair-trade principles and is committed to “creating jobs for people who need these most, improving the socio-economic condition of the producers and their communities”. They use locally produced natural fibres and recycled materials – from fabric and paper to packaging materials and cut-offs from garment production. Thanks to this approach, they have been included in Messe Frankfurt’s Ethical Style Guide, featuring a range of sustainable suppliers.

Birdhouses are a core product in JNDP Crafts’ offer. Their roosting pockets come in a wide range of shapes and sizes. They are handwoven from materials like colourful recycled saris, packaging materials and magazine paper, as well as natural fibres, like palm stick, banana leaf, bamboo and seagrass. In addition to developing their own range, JNDP Crafts can also produce custom birdhouse designs for their buyers.

DivadiBoat Wood Furniture, Indonesia

Divadi Boat Wood Furniture uses recycled wood from former fishing boats to create furniture and decoration for the home and garden. This wood is mainly teak, ironwood and Nyamplung. Divadi products have a unique style because they preserve the distinctive original colours of the boat wood. Their handcrafted birdhouses come in various designs and colours, with a clear water-based finish. Like JNDP Crafts, they are included in Messe Frankfurt’s Ethical Style Guide.

Figure 8: Company profile

Source: Divadi Furniture @YouTube

Patkar, Poland

Patkar specialises in products like bird feeders and nesting boxes of wood. They also make houses and feeders for garden animals like hedgehogs, squirrels, bats and insects. As a wildlife-oriented company, Patkar is committed to sustainability. The company is FSC Chain of Custody certified, guaranteeing that their wood comes from responsibly managed forests. They also seek to minimise their impact on the environment by using renewable electricity and improving their energy efficiency, for example by using LED lighting and electric forklifts.

The company’s nesting boxes and feeders come in various shapes and styles that vary from sleek and modern to more rustic and nature-inspired. They keep the colours relatively neutral so the birdhouses do not attract unwanted attention from predators. The nesting boxes can be opened for cleaning via the roof, the front panel or a side panel. Patkar’s range also includes multifunctional nesting boxes, which also feature a seed tray for feeding.

Which products are you competing with?

Competition for birdhouses mostly comes from within the product category itself. Consumers can choose between various materials and designs, as well as between functionality and decorative value. Some prefer more camouflaged nest boxes with a natural design while others like eye-catching decorative birdfeeders.

4. What are the prices of birdhouses on the European market?

Prices for birdhouses vary across market segments. After adding logistics costs, wholesaler and retail margins, and Value Added Tax (VAT), European consumer prices are about 4 to 6.5 times your selling price.

Table 1 gives an overview of birdhouse prices across market segments. Be aware that these are just an indication, as prices vary depending on technique, size, material, design, brand and other ways of value addition, including a strong sustainable concept.

Table 1: Indicative consumer prices of birdhouses in Europe

Consumer prices depend on the value perception of your product in a particular segment. This is influenced by your marketing mix.

Figure 9: Marketing mix: the 4 Ps

Source: Globally Cool, GO! Good Opportunity & Remco Kemper

The European consumer price of your birdhouses is about 4 to 6.5 times your FOB price. In addition to energy, labour and transport costs, FOB prices depend heavily on the availability and cost of raw materials. Occasional cost increases are not directly passed on to the consumer, so they put pressure on margins in the supply chain. However, recent disruptions have resulted in longer-term cost increases. This continuing pressure has made many retailers raise their consumer prices. When costs drop again, consumer prices may follow.

Consumer prices are generally made up of:

• Your FOB price
• Shipping, import, handling costs
• Wholesaler margins
• Retail margins
• VAT; this varies per country, about 20% on average

Figure 10: Price breakdown indication for birdhouses in the supply chain

Source: Globally Cool, GO! Good Opportunity & Remco Kemper

For example, the FOB price in Table 2 is set at €10. Depending on the segment your product is designed for, the consumer price will range from €41 (low-end) to €65.50 (high-end).

Table 2: Example of the price breakdown per market segment

The FOB price of €10 includes your own margins. These depend on your efficiency and price setting. Margins in the lower segment are generally smaller than in the middle and higher segments.

Examples of consumer prices are:

• Stoneware bird feeder, Søstrene Grene, €8.98
• Birdhouse in farm design, BirdSupply, €24.95
• Copper birdhouse or feeder with mango wood roof, The Worm that Turned, about €87

Globally Cool carried out this study in partnership with Remco Kemper and GO! GoodOpportunity on behalf of CBI.

Please review our market information disclaimer.