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

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Takes 15 minutes to read

If you want to enter a new grain, pulse or oilseed 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.

Risk avoidance

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.

Personal contact for niche products

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).

Communication in different business cultures

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.

Tips:

  • Keep your first contact moment short and to-the-point. The goal of your first contact moment is to create initial interest and secure a follow-up. First contact can be an introduction by email or a short phone call. Do not give up too easily. People have different ways of turning you down. This does not mean that they are uninterested – it may be because of a lack of time or low priority.
  • Make sure you find a decision maker, or at least someone that is involved in purchasing your product. In some cases, this will be one of the purchasers, but in the more formal companies, your product will be approved by the top management.
  • Find out what kind of company you are dealing with and what needs they have. Try to meet in person to get to know your counterpart and exchange further information. Be yourself and help your potential buyer in taking away the risks of doing business with you by showing the good conduct of your company. Ask if they have questionnaires for new suppliers and/or if they want to visit your establishment.
  • Be on time for meetings. Punctuality is important, and meetings are often scheduled weeks in advance and have a clear objective. Greet with a firm handshake and make eye contact.
  • Gain an understanding about how to do business in Europe by reading about the different European business cultures in Passport to Trade 2.0 or their etiquettes in the Kwintessential Etiquette Guides.

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.

Explain why you are a reliable supplier

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.

Find and use your unique selling points

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 of Nature Bio Foods Limited 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, a division of the supermarket Coop, the foundation managed to get their product into European supermarkets. Another example is the Designation of Origin and brand marketing for Royal Quinoa (“Quinoa Real”) in Bolivia, which has given producer associations such as Anapqui and Cabolqui 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.

Tips:

  • Highlight what makes your product special for the international market, including aspects with a competitive advantage or with which you can attract specific buyer groups. For example, a separate gluten-free processing line for amaranth, quinoa, teff and fonio, superior quality or high-grade chickpeas or sesame, or chia seeds with a high level of omega3 fatty acids.
  • Show your social engagement. If you have activities that benefit your farmers, families and communities such as educational programs or health services, talk to your buyers about them and promote them on your website or social media.
  • Apply basic processing to your products. While most grains and pulses are traded as bulk products, basic processing into grain flakes or flour (for example quinoa flakes or lentil flour) can give you a competitive advantage with a select number of buyers.
  • Specialise in specific products or market channels. Specific focus and experience can improve your reputation as a supplier and help your company stand out from generic suppliers.

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.

Pricing

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.

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 largely determined by the international commodity exchange market. In this case, it is more about the moment at which you sell than your negotiation skills, either through future contracts or on the spot market, for example.

Know your buyer

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. Find out what your buyer considers most relevant and emphasise this in your quote. Hard selling techniques, such as sending unsolicited quotations, often do not work.

Information to include in your offer

When sending your quotation, be to-the-point and be complete in your information. See table 1 as an example of which information you can include in your offer. Make sure you are also familiar with your buyer’s purchase conditions, if they have them – see for example the purchasing conditions of LDC for the EMEA region. Always make sure you get your offer confirmed and signed.

Table 1: Example of information to include in your quotation

PRODUCT (Product and product specifications)

Organic sesame seeds, white, natural

Premium quality (purity 99.7%)

(add a technical product sheet)

PRICE (Product price per weight and incoterm)

US$1,250 per tonne FOB

CERTIFICATIONS (Product certifications)

EU Organic by ECOCERT

(add a copy of the certification)

PACKAGING (material and size)

 

25kg polypropylene or multilayer paper bags

Stacked with protective liners, no pallets

SHIPMENT (total weight / shipments)

3x 20” FCL (Full Container Load) / 19.700kg

1 FCL per calendar month

DURATION OF CONTRACT

3 months until 31-12-2020

ORIGIN

India

SHELF LIFE (packaging date or shelf life)

12 months

TERMS OF DELIVERY (Incoterm)

FOB (CIF possible on request)

TERMS OF PAYMENT

25% advance payment, 50% CAD (Cash against documents), 25% within 21 days of delivery, T/T (Telegraphic Transfer)

PORT (port and estimated date of shipment)

Mumbai, first week of October (2020)

EXPIRY DATE OF OFFER

September 25th 2020

Tips:

  • Before sending a quote, know the buyer and their needs. Ask questions on what is important to them and personalise your quote (Dear Mr/Mrs <last name>; if your business relation addresses you with your first name, you can do the same)
  • Try to make long-term deals with your buyers by making it interesting for them to negotiate multiple shipments. This way, you get commitment from your client, but make sure you can complete your part of the offer as well.
  • Help your offer stand out by highlighting your strengths or unique selling points. Be flexible in your terms of delivery and packaging.
  • Include the technical product data in your offer to avoid different expectations.

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. The examples below are European organisations that support exporters in developing countries, but you can also check in your own country of there are support organisations.

Centre for the Promotion of Imports from developing countries (CBI)

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)

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)

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.

Tips:

  • Check the current and upcoming projects of CBI. See if any of these might be interesting for your company.
  • Contact IPD if you think their services match your needs in increasing your knowledge on doing business in Europe.
  • Subscribe for free or paid online courses with the ITC SME Trade Academy.
  • Find Business Support Offices (BSOs) in your country and see what they can do for you. Many government agencies also offer space in country pavilions at major trade fairs in Europe.

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.

Patience

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.

Good communication and problem solving

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.

Preferential treatment

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

Tips:

  • Invite your potential buyers and plan on-site visits to your farm and facilities. It is a good way to get to know each other better and give your buyer a better impression of your company and its capacity to export the required quality and volume.
  • Implement good after-sales service and be proactive in your communication. The way that you communicate with your buyer is key to maintaining a good business relationship: Inform your client proactively about any possible delay or problem, check if the product has arrived and if the quality is as expected. Ask what you can do to further improve your service.
  • Take any quality issue or claim from your buyer seriously and help investigate the source of the problem. Solve the problem together, even if it is not a mistake on your part.
  • Make it a habit to reply quickly and consistently to emails, phone calls or any other form of communication. Not getting back within one business day shows lack of interest. Use several communication tools such as a direct mobile phone, personal email address, WhatsApp and Skype so you are easy to reach for your business relations.

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.

Tips:

  • Keep your records up to date and send the annual renewal certificates to your clients before they are due.
  • Show that you care about the environment by implementing good farming practices. For example, promote the programmes that you implement at your farms related to crop rotation, integrated pest management, waste management, reforestation and carbon footprint reduction.
  • Find out what types of certifications are most relevant for you and your target markets. Check the CBI study on buyer requirements for grains, pulses and oilseeds and the ITC Standards Map.

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.

Tips:

  • Choose the countries that offer the best opportunities for your product. Use the CBI product studies for different types of grains, pulses and oilseeds. Also consider the countries that you are most familiar with, possibly through existing trade contacts or because they speak a language you master well.
  • Make potential buyer lists and prioritise. Select buyers according to your profile (for example: buyers with contacts in the bakery sector for ancient grains, or specialised buyers of organic ingredients or grains and seeds with health benefits, or buyers with extra attention for social responsibility). Use trade fairs to meet these companies.
  • Decide the level of integration you want to have with your supply chain. With trusted partners, you can work on consignment basis or choose to organise your own warehousing in Europe. Let your marketing budget and financial power be decisive factors for supply chain integration.

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.

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