7 tips for doing business with European buyers of grains, pulses and oilseeds

If you want to enter a new market, it is key to understand how people in that market do business. Since you will be dealing with people from different countries in Europe, you will have to adjust to their culture, requirements and expectations. It is also important to be selective when choosing different partners and countries for your market entry, and to tackle them one by one.

1. Business culture: Use a personal approach

The products in the grain, pulse and oilseed industry are diverse and so are their different business cultures, ranging from a traditional business culture in the main commodities to a more personal approach in specialty ingredients and products that require more attention in sourcing and quality control.

A common denominator in the European trade of food ingredients is the risk avoidance by buyers (see also building relations below). Quality assurance is a big issue, and buyers do not want to risk receiving a product that does not comply with the market standards. One of your main tasks is taking away that risk. Your relation to the buyer is important to gain trust, and this is best realised by a personal approach and by being open and honest about your intentions. Honesty will get you more information and time from your business relation.

Large commodity buyers will use more formalities such as purchase contracts and supplier’s declarations, sometimes without much interest in the person behind the product. For products that require extra attention in terms of traceability, food safety and quality, you can personalise your approach much more. Buyers will often want to see the production facilities for themselves and meet the person behind the product. The personal contact helps your buyer to mitigate risks, for example when the product involves many small farmers (such as quinoa, teff, fonio), or is difficult to source (such as organic chia seeds).

A good communication style is necessary to avoid misunderstandings. However, each European country is different. Be flexible and adapt to the circumstances. Understand the business culture and try to adapt to their way of doing business. This does not mean that you have to go along with every wish of your buyer, but to follow their business etiquette.

For example, in Germany, the business culture is formal and hierarchical, and you should focus on the facts and use rational arguments. Rationality is also an important part of Scandinavian business culture, although their style of doing business is much more informal and done through consensus. In the Netherlands, people will appreciate a direct communication style, while in the United Kingdom, indirect communication is considered most polite. In the Mediterranean countries, business partners value their relationships and spend more time in maintaining them.

2. Your sales pitch: Create and explain your unique proposition

Your value as a trade partner is mainly determined through compliance and price. In the trade of large commodities, businesses tend to be traditional and you will be dealing with a structured and efficient supply chain. Products that are more specific usually require more paper work, quality control and negotiation, which provides more room to stand out.

Instead of telling your potential buyer that you are competitive and that you are compliant with product requirements, explain what makes you a reliable supplier and how you manage your business. This creates trust and gives your potential buyer a positive impression on reliability and seriousness. Tell your buyer about your organisation, your track record and show your production process. Certifications are important to add in your marketing, but your company values and how you apply them in practice are more personal and therefore add more character to your offer.

Thoroughly analyse what makes your company different from other suppliers. What are your unique selling points? Try to differentiate and link your proposition to the needs of your potential buyer. For example, show your work with small farmers when targeting companies with fair-trade products; mention your production power to ensure supply reliability to large buyers; separate production and processing lines for specialised buyers of gluten-free grains; adopt organic farming for typical health-related grains and seeds; or add value with basic processing for specific buyers.

For example, the Fair Farming Foundation in India successfully helped to market fair-trade Basmati rice from a large group of small producers to Europe. By organising the supply in cooperation with Reismühle Brunnen and supermarket Coop, the foundation managed to get their product into European supermarkets, which you can see in an online video of the project. Another example is the Designation of Origin for Royal Quinoa (“Quinoa Real”) in Bolivia, which has given producer associations such as Anapqui the advantage to market a specific quinoa variety from a specific geographical environment. This Royal quinoa has successfully been introduced to the European market with brands such as the French Priméal.

3. Quotation: Know your buyer before quoting your offer

Well-known buyers regularly get offers from potential suppliers with price information, and many buyers will tell you to email your quotation after your first introduction. However, your buyer is not looking for a price, he is looking for a good and reliable deal. Whether this deal is with you depends on your relation to the buyer and the level of trust you have gained.

Do not make price your only selling point. Realise that before becoming a supplier, you will often need to fill in forms and send copies of your certifications. Price quotations will merely provide the buyer with market information and potential input to re-negotiate his deal with his preferred supplier. Note that for wheat, soybean and maize, the value is determined by the commodity exchange and traded on future contracts or on the spot market.

Know your buyer when you are sending a quotation. The buyer is more likely to accept your offer if you have met them before, for example at a trade fair, or at least after he has shown genuine interest in your company. Also try to get more details of their needs when asked for a quote. Hard selling techniques, such as sending unsolicited quotations, often do not work.

When sending your quotation, be to the point and mention product characteristics, volume, price, packing, incoterms and date of expiry of your quote. Listen to your buyer on what they find most relevant and emphasise this in your quote. For higher volumes or long-term contracts, you can decide to offer more competitive prices and secure a longer relationship. When you are working with products such as wheat, maize or soybean, the prices are for a large part determined by the international commodity market. In this case, it is more about the moment at which you sell than your negotiation skills. Make sure you are familiar with your buyer’s purchase conditions, if they have them – see the purchasing conditions of LDC in Germany as an example.

4. Support agencies: Find collaboration of support agencies

Being part of an export support programme gives you access to trade assistance, trade fair promotion, export training and sometimes financing for certifications. These activities increase your chances with potential buyers.

Centre for the Promotion of Imports from developing countries (CBI) provides small and medium-sized enterprises with market intelligence and trade support in export coaching programmes. Their tailored programmes also include training on doing business in Europe. You can find relevant projects on their website.

Import Promotion Desk (IPD) establishes contacts in the European Union for exporters from partner countries and provides them with market information and capacity building. One of the sectors they operate in is natural ingredients, which includes grains and seeds (quinoa, amaranth, rice) and pulses (kidney beans, pinto beans, white beans, peas).

International Trade Centre (ITC) is a development agency for sustainable trade with publications and an SME Trade Academy that provides online courses (some are free of charge). Courses such as ‘Export Sales and Negotiation’ and ‘Helping SMEs Generate Export Business’ may be relevant if you want to develop yourself as an exporter of grains, pulses or oilseeds.

5. Building business relations: Try to build long-lasting relationships

Making the effort to build strong and long-lasting relationships is critical to remaining relevant in the market. In order to realise this, you will have to use your networking skills and face-to-face contact.

Do not expect to get orders on the first meeting; this can take a couple of months. Instead, build trust over a longer period of time, be patient, keep your promises and be honest. Showing reliability and consistency over time will help convince your buyer of your value as a supplier. Be aware that buyers can sometimes be opportunistic, in the sense that they will only buy your product when it is convenient for them.

Once you have established your first buyer relations, make sure you maintain efficient communication by responding quickly to emails. Cooperate and think together on how to solve problems or benefit together from market opportunities.

In a later stage, you can choose to give preferential treatment such as open account selling (goods are shipped and delivered before payment is due), offer better payment terms or explore cooperation in new projects.

6. Compliance: Keep your certifications up to date and comply with legal requirements

Compliance with European quality and safety standards is a must when doing business. Make sure to keep your certifications up to date and regularly discuss new developments with your buyers. In regular business relations, you are expected to continue your good practices and look ahead for new requirements rather than downgrading your current level.

For quality and food safety, HACCP, ISO22000, BRC and IFS are the most important standards in grains, pulses and oilseeds. For environmental and social issues, individual company standards are often used, but general standards such as GlobalG.A.P., amfori-BSCI, Sedex, Ethical Trade Initiative (ETI) and Rainforest Alliance may be used as well. Certifications such as organic, Fair Trade, non-GMO, gluten free, halal and kosher open the door to specific niche markets.

7. Export strategy: Be selective and focused when targeting your export market(s)

How you manage your sales in a foreign country depends on your company and your market entry strategy, and must ideally be defined before you start offering your product. But you must also remain flexible, because the reality may be different from your expectations and export strategies will often take further shape over time.

The main decisions you have to make are: how you will be selling, where and to whom. You have the option to sell indirectly, for example through a broker, or do business directly with importers, processors or even food brands and retailers. The more direct your sales, the more resources and local marketing it will require. The type of buyer can also vary in size, specialisation and market segment. Remember that buyers may select you as a supplier, but you can also try to select your buyer.

Start small: the European market is very diverse and large, and it will be very difficult to enter several countries at once.

Read our Tips for Finding Buyers and Tips for Organising your Export, these can help you further understand how to enter the European market and what it takes to become a successful exporter to Europe.

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