The Nordic region (Scandinavia plus Iceland) has a population of about 25 million, most of whom share tastes in food, have high incomes and long life expectancies. With the Swedish market for food alone being worth about $1-billion, there clearly are incentives for African exporters to sell their products into the region.
But barriers for entry into the European Union are high. Health and safety standards are high and consumers are discriminating in terms of quality. However, the rewards are great for farmers and food manufacturers who can get their products accepted.
Swedes spend about 14% of their income on food, and many of them, about 34%, live alone so there are that many more people buying the groceries than might be the case in a society where large families are the norm.
Charlotte Kalin is the CEO of Chamber Trade Sweden. Speaking at an investment conference in November, Charlotte pointed out that every kilogram of coffee consumed in the country is imported, as are large percentages of the country’s fruit (95%) and vegetables (60%).
“That represents a big opportunity”, says Charlotte. She noted that a delegation of South African stone fruit producers had recently visited Sweden. “They know what Swedish companies are looking for when they import from SA”.
And what Swedish companies are looking for apparently is high-quality goods, and choice. She pointed out that shoppers in South Africa have great variety when it comes to fruit and vegetables. “In your shopping here, you have a very sophisticated diversification in what consumers can buy. Shopping here is so much fun, there is so much to buy, you could really revolutionise the consumer choice, be it in spices, be it in fruits…”
Charlotte expanded on the shopping experience for a Swede in South Africa - which was something of a surprise for the South Africans in the audience! Said Charlotte, “Shopping here is like in California, you just have it all, I am very impressed actually“.
Charlotte made a specific call to African exporters, “There is a lot you can do in engaging the Swedish consumer in persuading them to buy new brands.”
Trends in Swedish food retail
In encouraging African agri-producers to export to Sweden, Charlotte pointed out that there are certain key trends that are guiding the food market now. These trends are for;
• Exotic foods (including spicy sauces)
• Organic foods
• Gluten-free foods
• Energy bars and drinks
• Ready-to-eat dishes
A member of the audience at the conference, a Swedish manufacturer, suggested that exporters had a real chance to make inroads into the ready-food market, what with lower input costs for the packaging of food in Africa. South Africa, with excellent refrigeration facilities, has a particular advantage.
Retail specialist Nils Tunebjer, of strategic brand and design agency BAS, pointed out that exporters must also have something to distinguish them from the rest of the pack.
“There must be something more,” said Nils. “If you just come with a product and regular packaging, you will have a tough time!”
“South Africa is a premium country for fruit and vegetables and food and you can answer the question, ‘What should I use when I step in?’”
He stressed that Swedish consumers are very quality-aware and urged potential exporters to tell their story, be it of the process that goes into making the product or the story of the people involved in the making the product.
“Be transparent and open about what you are doing, tell your history,” says Nils. “It can be online, or it can also be in the packaging, which is an important touch point between the retailer and the customer.”
Sweden represents really ‘tough competition’. “The big retailers appreciate if you give them something more: how you merchandise in the store, how you interact with the consumer, how you give information. There must be something more!”
Continuing on the theme of trends as mentioned by Charlotte, Nils pointed out that there is a pizzaria and a sushi store in just about every village in Sweden. “There is great interest in foreign foods and new ways of consuming.”
He mentioned Asian and Thai speciality stores that sell spices like cardamom and saffron. In the health market, South African tea brand Rooibos is very popular. Nils loves Rooibos but complains because he can’t get his favourite tea in the morning. “In our office, even though we have 50 different kinds of tea, I can’t get English Breakfast! Swedes love lots of green teas, red teas, all sorts …”
Other trends highlighted by Nils that are driving customer choices in Sweden are:
• fair trade
• ecological quality
• openness and information
• interesting back stories.
Nils pointed out that South African wines had created a lot of trust in the Swedish consumer, and generally Swedish consumers were very educated about the country they are importing from.
Price is still important according to Nils, but if producers are able to differentiate their product in one of these ways, then they will increase the chance of success.
Free export advice
Open Trade Gate Sweden is a section of the National Board of Trade of Sweden that offers a one-stop information centre for exporters interested in the Swedish market. It helps traders and aims to increase exports from developing countries to Sweden. Open Trade Gate Sweden specialises in trade rules and regulations, covering areas such as labelling, packaging, health and sanitary requirements and customs procedures.
The organisation has its headquarters in the Swedish capital, Stockholm.
If problems occur in the process of exporting, Open Trade Gate Sweden investigates and acts to overcome the problem. Open Trade Gate Sweden’s services are free of charge.
In 2003 the Swedish parliament decided that the entire government shares the responsibility to contribute to the objective of achieving an equitable and sustainable global development. All future policies would take into account the effect of policies on developing countries.
As outlined by Open Trade Gate Sweden, ‘within the area of international trade it [the policy] specifically says that the Swedish government should work for improved market access for developing countries and remove trade barriers to facilitate trade and try to increase exports from developing countries to Sweden.’
Information about Open Trade Gate Sweden services and general information about exporting to Sweden and the EU can be found on the website www.opentradegate.se
Visit www.frontiermarketnetwork.com to access a database of distributors, agents, importers and exporters in Africa.
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