Growing up

The EU
Savid Fresh-cut Fruits and
Vegetables Market

London, 15 June Cindy van Rijswick, Food & Agribusiness Research and Advisory

Rabobank International
After a period of strong organic growth, clear decisions
are needed to (re)position yourself

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Rabobank Food & Agribusiness bank

•  Rabobank is a cooperative
•  Rabobank is the largest financial services
corporation in the Netherlands

•  Rabobank is an AAA rated financial institution

•  Rabobank has an international food & agri
focus

•  Rabobank delivers financial solutions through

a network of branches in 41 countries
 Food & Agribusiness Research and advisory: Global
network of research professionals

Over 80 people
in 12 countries

Focus areas:
•  Animal Protein London
Utrecht

•  Beverages
Beijing
•  Clean Tech New York
Shanghai
New Delhi
•  Dairy Hong Kong

•  Farm Inputs Mexico City Mumbai

•  Food Retail Singapore

•  Fruits & Vegetables

•  Grains & Oilseeds Sao Paulo

•  Sugar & Sweeteners Santiago de

Sydney
Melbourne
Christchurch

Chile
Buenos Aires

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Despite the health trend, fruits and vegetables
consumption per capita is rather stable…

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 …in particular in western Europe

Source: Rabobank FAR based on Euromonitor, 2010

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 Fruit is predominantly bought fresh

EU fruit market by segment (based on volume and excluding B2B, 2010)

Source: Rabobank estimate, 2010.

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Vegetables are more often bought prepared or processed

EU vegetables market by segment (based on volume and excluding B2B, 2010)

Source: Rabobank estimate, 2010.

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Salads are the largest and earliest fresh-cut segment

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Fresh-cut has been one of the most interesting fruit and
vegetable segments in recent years

Source: Rabobank FAR estimates based on Amadeus and Euromonitor, 2010.

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Wide differences in market growth pace among EU
countries

Growth index prepared chilled salads in selected markets

Source: Rabobank based on Euromonitor, 2010

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Fresh-cut fruit market has left its childhood behind

Source: Euromonitor, 2010.

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 Long term consumption trends still prevailing, but
consumers have become more critical

Well-being
(healthy, ethically
produced)

Value for
money

Indulgence Convenience

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Retail and foodservice environment has become more
challenging

  Further growth opportunities for food retail:

  Multi-channel approach
  New locations
  Expansion abroad

  Assortments regularly revised

  Sensitivity to “ethical issues” to remain high

  Fresh produce is key

  Front of retail store
  High margins
  Differentiation

•  Food retailers are reconsidering sourcing strategies

Source: Rabobank FAR

Slow recovery of foodservice turnover

Growth foodservice versus consumer confidence

Source: Rabobank, CBS, 2010

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Sourcing will become more critical

The fight for food, feed, fibres and fuel

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Competitive playing field in fresh-cut fruits and vegetables
still very fragmented and diverse...

EU competitive playing field in fresh-cut fruit and vegetables

Large dot = company with over EUR 100 mln

turnover in Fresh-Cut

Source: Rabobank.
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...with large differences in profitability

EBITDA levels and margins among EU fresh-cut fruits and vegetables producers

Source: Rabobank based on Amadues, 2010.

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Companies have to get ready for a new era of growth

- Players (mainly Private Label) with close often long term

relationships with retail and/or foodservice customers
- USPs are product range, service level, innovation

Customer
intimacy

- Players with a cost focus ,

mainly providing discounters,
B2B market, or varying buyers
with limited product range.
- USPs: low product price but
Product Cost good basic quality products
leadership leadership

- Branded players or players specialised in a niche

- USPs are brand, marketing, unique product

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 There will be fewer but larger and stronger players in
the future fresh-cut industry

Continuing market
Branded

growth

Various opportunities:,
CSR, product portfolio,
distribution, quality

To gain opportunities:
-  Sourcing
-  Efficiency
-  Tailored products
private label

Scale and/or financial

strength more important

National market presence versus European

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