10 tips for doing business with European Buyers of Grains and Pulses
What needs and wishes of European buyers should I take into account if I want to build a fruitful business relationship with them?
When you want to enter a new country, it is key to understand the way that people there do business. Since you will be dealing with people from different countries in the EU, it is recommended to adjust to their culture, requirements and expectations. It is also important to be selective when you choose the countries to penetrate, and tackle them one by one.
Contents of this page
- Try to build long-lasting relationships
- Be aware of differences in business culture and communication
- Keep your certifications up to date and comply with legal requirements
- Make sure you have a good sales agreement
- Work on your product differentiation
- Get ready with the best product conditions
- Be selective when targeting your export market(s)
- Implement a good after-sales service
- Identify the business model that suits you best
- Promote your social and environmental efforts
Making the effort to build strong and long lasting relationships is critical in order to remain in the market. Hard sell techniques do not always work.
Do not expect to get orders on the first meeting or discussion, as this can take a couple of months. Instead, build trust over a period of time, be patient, keep promises and be honest.
- Be aware that buyers can sometimes be opportunistic, in the sense that they will only buy your product when it is convenient for them. This can mean they are not looking to build a long-term relationship. If the conditions are not favourable for you, you can decide to protect your business by declining to sell to this buyer.
- Buyers tend to do an initial trial prior to importing your product regularly. This is done before they trust you. They want to know more about you, your quality, consistency and commitment. Plan on-site visits to your farm or facilities and invite your potential buyers. This might help to get to know each other better and show that you have a stable business environment and the capacity to export the quality and volume required.
A good communication style is necessary in order to avoid misunderstandings. Each country is different in Europe. Be flexible and adapt to the circumstances. Understand the business culture and try to adapt to the local way of doing business. This does not imply that you have to do what the buyers ask you to do, but instead means that you should follow their business etiquette.
Dealing with more than one language in Europe can make negotiations challenging. However, English is the main business language. It is not uncommon for your buyer to have knowledge of your country’s language too.
- Europeans tend to be formal in doing business. Meetings are scheduled weeks in advance, and run according to a set agenda. Greet with a firm handshake and make eye contact. Punctuality is important.
- Be sure that you and your office members have a good command of English to be sure that nothing gets lost in translation.
- It is important that all your business documents are written in English. Should you have labels on your products (in case of consumer products), it is very important to have them written in the language of the country you are selling to. There is also the possibility to create a multi-lingual label.
- If you want to know more about business culture in each of the European countries, see resources such as the Kwintessential Etiquette Guides.
Compliance with European quality and safety standards is a must. In addition, Europeans are very keen to protect the environment, and are concerned about climate change as well as social and human rights. Therefore, certifications concerning environmental and social issues may also be useful.
For quality and food safety, HACCP, ISO22000, BRC and IFS are the most important standards in grains and pulses. For environmental and social issues, individual company standards are often used, but general standards such as BSCI, Utz, 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.
- As certifications are renewed each year, keep your records up to date and send the renewal certificates before they are due to your clients.
- Show that you care about the environment by implementing good policies. For example, promote the programmes that you implement at your farms related to crop rotation, waste management and carbon print reduction.
- There are different types of documents that you might have to prepare when you start exporting your products. Check this beforehand to avoid delays on deliveries. Typically, you will need your commercial invoice, bill of lading, shipping notes, pro forma invoice, transit documentation and last but not least, pre-shipment inspections which are specific to your products. For more information, see Documents for customs clearance.
- For more detailed information on certifications and requirements, see our study on buyer requirements on the European grains and pulses market. Find out which types of certifications are more relevant for your target countries. Please check Standards Map.
As in any business relationship, both parties should be happy with each other. It is therefore important to have the right contract terms that will protect you and your business. You should have laid down a consistent legal framework, clear payment terms, terms of delivery, trade currency and so on. Some buyers prefer to have long-term (annual) contracts and even are able to help with financing your crop production. However, when you fix prices in advance, you should be aware of the (price) risks involved: the prices of either your raw materials or of the product you sell are likely to change during the course of the contract, complicating its fulfilment.
Contracts can be closed verbally with a firm order which is accepted by the other party, or by signing a contract. In any case, make sure that your agreements are properly confirmed in writing and are legally signed.
- Before closing a deal, it is important that both parties agree on all conditions; this way you will avoid misunderstandings during trading.
- Payment terms vary widely, ranging from ‘advance payment upon signing of the contract’ or ‘cash against documents’ to ‘open account’, when the payment is only effected after delivery and acceptance of the goods. Try to negotiate advantageous terms of payment for your company, but be realistic. Trust is also a major issue. If you do not know your buyer yet, be careful in granting terms such as open account where the risk is largely on your side.
- Fulfil any sale conditions in your contract. It is not considered correct to break a contract due to increase in sale prices, for instance.
Selling grains and pulses in Europe is a competitive business because of the vast offer of commercial commodities which have been traditionally traded. In this competitive market, niche products will have greater chances of success for small and medium-sized exporters from developing countries. In general, grains and pulses that are organic or fair trade certified are very attractive for niche markets.
- Highlight what makes your product special for the international market. The special attributes of niche products offer exporters the possibility to gain market share and attract specific consumer groups. For example, amaranth, quinoa and cañihua are interesting as gluten-free products, and sesame and chia are high in omega-3 fatty acids.
- Apply basic food technology to your products. Although most grains and pulses are traded as bulk products and there is little room for end products, which are normally processed in Europe for the local needs and taste, basic food technology is sometimes applied at origin. This includes grain-flaking processes or flour making from both grains and pulses (e.g. quinoa flour, lentil flour).
- Generally, semi-processed or processed grains and pulses will be packed in Europe for retailer sizes. It is certainly good to find out first from your buyer any requirements before performing food processing. See CBI Buyer Requirements for more information.
European buyers and consumers are very stringent and expect your product to comply with quality and safety standards. Be sure that you can supply the level of quality as expected by your buyer and as agreed in the sales contract. This way you will avoid the risk of goods being rejected upon arrival to Europe. The presence of contaminants such as pesticide residues, heavy metals and aflatoxins present an especially large hurdle for imports into Europe, and both the competent authorities and private operators exercise strict controls.
- Implement good traceability and quality control systems at your facilities, which assure that your food products are safe and produced to the European standard.
- Submit on-time laboratory results for pesticide residues, mycotoxins, fungi or any other substances required.
- Each product category within Grains & Pulses has its own quality requirements. Check this ahead of time. For more information see CBI Buyer Requirements.
- Keep in mind that your customers need your products to arrive on time, as they also have agreements with their clients to fulfil. Therefore, it is important to allow plenty of time to get your products ready to be shipped. If there is any problem with your harvest, packaging, shipping and so on, inform your clients in advance. This way both parties can look for alternatives and you can avoid losing your buyers.
Start small. The European Union is very large and diverse, and it will be very challenging to enter several countries at once. For instance, in North-western Europe people are concerned about their health and prefer to choose natural and highly nutritious food. Traditionally, pulses have been consumed in Southern Europe as a great source of low-fat protein and as an alternative to meat. They are very well received, and now are becoming more popular in the rest of the EU. Gluten-free grains that are substitutes for wheat are also in high demand.
- Try to get to know the country you are targeting first, for instance by travelling there on business or on holiday. Take your time to observe the market and exchange information with locals.
- Choose which countries to export to. It is advisable to select the countries before developing a sales strategy, for example based on your preferences, the results of your market research, trade statistics or connections you may already have. See more details on CBI Market Trends for Grains and Pulses.
After your product has been shipped, maintain good communication with your buyer. This is not only to ensure the product has arrived without any problems, but also to know whether there is room for improvement on quality or service. The way that you communicate with your buyer is key to maintaining a good business relationship.
- Have people in charge to answer technical questions at your company, such as a quality manager to answer questions about any part of the process or quality issues that may arise. Follow up on any queries diligently.
- Quick response time and consistency: in order to keep the business running, it is important to get in the habit of replying quickly to emails, phone calls or any other form of communication. Not responding within one or two business days shows a lack of interest. Even if there is bad news, it is advisable to inform buyers of what is happening in a timely manner.
- Use social media and online tools which help to keep your business sales running round the clock.
Ideally, how you manage your sales in a foreign country should be defined before starting to offer your product. Your options include appointing an agent, choosing a sole distributor, selling directly from your country of origin to many customers, or opening a sales office. Often, this market entry strategy will also take shape over time. Generally, your potential customers are traders/distributors and (food) manufacturers. Retailers in Europe buy from wholesalers, distributors or importers.
- Setting up your selling force in a country does not necessarily mean that you need to establish your own company there. You can have your own distributor or agent to do the sales for you. If you decide to contact buyers personally, the best way to do so is while exhibiting your products at a trade show or through networking. See more information on CBI Market Channels and Segments for Grains & Pulses.
- Discuss with your buyer the Incoterms and the best means of transportation to deliver your goods on time in the EU. Although you may be selling on FOB conditions, it is common to receive help with the coordination of sea transport to a European port.
- To deliver your goods on schedule, allow plenty of time for the preparation for shipment. As grains and pulses are dry products, there is also the possibility to obtain a storage facility in a warehouse in Europe and distribute to other countries within the EU from there.
More and more European consumers are aware of social, ethical and environmental schemes. Therefore, implementing Corporate Social Responsibility (CSR) at your company will be rewarded at the end of the supply chain.
- If you have implemented your own programmes at your farms that benefit your farmers, families and communities (e.g. educational programmes, health services), talk about them with your buyers and promote them on your website or through social media.
- In general, all practices in the area of sustainability will improve your international performance and make your company stand out from your competitors, thus helping you gain market entrance.
‘International trade has multiple challenges, and there is no silver bullet to master them. However, there are two main dimensions to consider: first, make sure you are well prepared and, second, be prepared to solve problems in a fair and flexible manner.’ Freek Jan Koekoek, CBI Sector Expert
‘Take the time to look for your clients, one by one, contact them and invite them to have a tea or a beer. Call them every now and then and ask them what shows they are attending to meet them in person.’ Alan Burgos, importer.