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

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 important to be selective when choosing different partners and countries for your market entry, and show excellent compliance and reliability.

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. It is important to gain trust with a buyer relation in Europe, 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. 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.

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 as a supplier.

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 Coop Cooperative, 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.

Figure 1: Finding unique selling points

Figure made with wordart.com 

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

4. Samples: Send representative samples and laboratory tests

Samples are a good way to show the quality of your products and your compliance with the market requirements. When your buyer asks for a sample, make sure the sample is well-packaged and representative for the lot you have reserved for the particular buyer. It is useless and even considered fraudulent to send samples that do not correspond to the quality of the rest of the lot.

A representative sample is generally taken by trained people and from different parts of a lot. You can use an independent agency such as SGS or Bureau Veritas to take the sample to assure it is done properly and according to standards (such as ISO 7002).

For sampling you can take the following summarised steps:

1. Defining sample: Define the product specifications and sample size your buyer is looking for and select the product lot.
2. Sampling: Take the sample and register it (make it traceable to the right lot)
3. Adding data: Add a technical data sheet with a detailed product description and parameters on analytical, nutritional and microbiological properties.
4. Labelling: clearly state it is a sample with negligible value (for example by adding a pro-forma invoice with zero value and stating it concerns a ‘sample for testing or trade promotion purposes’ to claim exemption from import charges.
5. Packaging: Package and seal the sample properly (clearly state it is a sealed sample so customs do not open it).
6. Confirmation: Confirm whether the buyer has received the sample and follow up on it.

When you (also) share a laboratory test to measure residue levels, make sure the test is done by an accredited laboratory. Be aware that testing methods and results can vary between laboratories and countries. Therefore it is best to have samples tested by the buyer as well, or by a their laboratory of their preference.

5. 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 if 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. The tailored programmes also include training on doing business in Europe. You can find relevant projects on the 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.

6. 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.

Prove to be reliable and respect agreements

Once in business, you want the business relation to continue. That means you have to respect your agreement and supply according the deal you have closed. You must not change the conditions or the agreed price once they are established, even when market prices have increased. Your buyer expects you to supply the quality and price that you have agreed on, just as much as you expect your buyer to pay for the product according to the contractual obligations.

Preferential treatment

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

7. 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.

8. 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: what you will be selling, how, where and to whom. First make sure you have a clear product focus. Take on the products that you are really good at in terms of volume and quality. For buyers it is impossible to understand your proposition when you offer too many different products.

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 the type of buyer that fits your company’s ambition.

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.