10 tips for doing business with European buyers of natural ingredients for health products

As an exporter of natural ingredients for health products, you must take certain steps and pay close attention to particular characteristics to ensure your export activities to Europe are successful. This study highlights 10 characteristics and also 10 tips that will help you achieve them. If you and your staff master these characteristics you will have a better chance of becoming and remaining a successful exporter to the European market.

1. Be aware of the differences in business culture

You need to know the culture in the European health products sector. A key advantage of following this tip is that it will help you in your dealings with European buyers. As a newcomer to the market, this is crucial for creating and maintaining business relationships with buyers. European buyers are used to a high standard of professionalism when dealing with suppliers. You must therefore ensure you always maintain high standards of professionalism with buyers.

Your natural ingredients will be used in the pharmaceutical, nutraceutical and complementary and alternative medicine industries. Adapting to these industries is not always easy for exporters from other industries. You should decide which industry to enter, and then familiarise yourself with regulations, standards and industry practices.

Ensure you are well prepared in advance of any negotiations with European buyers. You can increase your chances of success by researching specific topics, such as payment terms, minimum volume requirements, relevant legislation, logistics and export insurance. Although you cannot always predict the direction your negotiation will take, you must show potential clients you have done your research. You should ensure your body language is open and confident.

You should ensure you familiarise yourself with all the technical language of specifications in addition to that of sector-specific regulations, terms and certifications related to your ingredients. The natural health products industry is focused on corporate social responsibility and environmental responsibility. You should therefore also familiarise yourself with the commonly-used regulations and terms in the industry. For further information, see the CBI Study on the requirements that natural ingredients for health products must comply with to be allowed on the European market. Table 1 shows commonly-used terms in the European natural health products industry.

Table 1: Commonly used terms in the European natural health products industry

Technical language of specifications	Sector-specific regulations and terms	Regulations and terms concerning corporate social responsibility and environmental responsibility
Technical Data Sheet (TDS)	European Medicines Agency’s (EMA) community herbal monographs	Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). Also known as the Washington Convention.
Safety Data Sheet (SDS)	General Food Law	Nagoya Protocol
Certificate of Analysis (COA)	Hazard Analysis Critical Control Points (HACCP)	Access and Benefit Sharing (ABS) compliance
	Physical, chemical and biological contamination	Supplier Ethical Data Exchange (SEDEX) membership
	EU Organic Certification	Fair Trade, Fair For Life, FairWild and UEBT certified
	Certification of Inspection (COI)

Although personal meetings are always preferred, most European buyers like to communicate with their suppliers over the phone and/or by email. However, be aware communicating via email can sometimes lead to misunderstandings. Thus, to reduce the likelihood of this happening, you should try to keep your message clear and brief. Setting up conference calls is also a good way to discuss more complex issues. Documents can be sent electronically. Buyers often request samples and, if they are interested, may request a company audit.

Keep in mind that European buyers are frequently approached by new suppliers. Attending trade shows and buyer meetings can increase your success rate.

2. Set your prices carefully when making a quote

Only go to market after carefully calculating your prices and pricing strategies. Failing to do this could result in you incurring financial losses because you could be selling your natural ingredient for less than its production costs. Furthermore, it is essential that you have your carefully calculated pricing information ready before approaching European buyers, as they are likely to ask you about pricing. These are the key reasons to follow this tip.

Meanwhile, in addition to incurring financial losses, failing to provide buyers with pricing information will lower your credibility in the European market. Thus, you should ensure you follow this tip.

Setting your prices

When preparing the pricing information about your natural ingredients, you should start by preparing accurate cost information. You must therefore answer the following questions when doing this:

• What does it actually cost to procure, process and deliver your goods to a certain point in the supply chain?
• What is the break-even point for your entire business? This is the number of products you need to sell to at least cover your costs. 
• What margins have you attributed above break-even?

Not knowing the answers to these questions and in turn failing to have accurate pricing information could result in you incurring financial loses, as you could be selling your product for less than its production cost.

Familiarise yourself with the different international commercial terms (Incoterms®) for your products. Buyers usually want to know the FOB (Free on Board) price for your goods, where the carrier is decided by the buyer. Know how to calculate this price. Additionally, also prepare price points for other Incoterms such as CIF (Cost, Insurance and Freight) and DDP (Delivered Duty Paid).

Natural ingredients for health products are sold by weight, not volume, usually in units of 25kg and container loads. Thus, set your prices on a per kg or per tonne basis. European buyers expect discounts when they purchase larger quantities. For example, a 10 percent discount on a 100kg order. You should accurately work out discounts based on the higher or lower unit price for handling, transporting and warehousing the goods.

Making a quote

European buyers generally require prospective suppliers to provide them with quotes when determining whether to do business with them. Quotes will contain information which they will use to determine whether they want to do business with a particular supplier. Quotes should be short and to the point, and should not contain any spelling errors or grammatical errors. The following information should be included in quotes:

• Product description and/or range (if you export a range of natural ingredients) – This should contain the basic grade (conventional and/or organic), quality and certification information about your natural ingredient. You do not need to send a complete product specification, because you can send it as an attachment, something you should do as it gives your business credibility.
• Shelf life – Industry experience is often used as its basis. This is defined as the typical shelf life of an ingredient when it is correctly stored and handled. This is only offered as a guideline and should therefore not be used as an expiration date.
• Price – This should be in euros (EUR) because you are targeting European buyers. You must state which Incoterms are used for the price along with the unit used (generally, on a per kg or per tonne basis). This is applicable to liquid natural ingredients for health products such as essential oils as well as solid natural ingredients for health products such as turmeric.
• Estimated delivery / lead time – This is the estimated delivery time from the developing country you are exporting from to the European buyer. You should keep in mind that delivery times may be longer due to the global COVID-19 pandemic and that this is expected to remain the case for the foreseeable future. The reasons for this including forced quarantine measures and restrictions on the movement of goods. This is something that has been highlighted by European buyers of natural ingredients for health products who have been interviewed on behalf of CBI.
• Capacity to export – This concerns information about quantities of natural ingredients you can supply and over what period. Note, production of some natural ingredients in developing countries has been restricted and/or completely stopped due to governmental lockdown measures. This may affect the quantities you are able to produce and export. 
• Packaging – Information about the type of packaging (for example steel drum or kraft paper bag) and size (for example 25 kg per batch) of your natural ingredient should be included here.
• Payment – Payment terms can be indicated, however they can be negotiated later.
• Quote expiry – This does not always have to be provided. However, to avoid frequent price fluctuations you can indicate that your price is not your final offer.

Figure 1: Example of a quote in the natural ingredient for health products sector

Source: Ecovia Intelligence

3. Be professional when dealing with European buyers

Ensure you uphold a certain standard of professionalism when doing business with European buyers. By following this tip and behaving in a professional manner, you can gain respect from prospective buyers. It will also add to your credibility and help you build a positive reputation in the European health products sector. These are reasons to follow this tip. Meanwhile, not following this tip is likely to have the opposite effect, with European buyers losing interest in your business. You are therefore urged to follow this tip.

When dealing with European buyers there are several ways to demonstrate professionalism, they include:

• Dressing and behaving appropriately – Dressing in appropriate business attire and behaving and speaking in a polite and courteous manner and tone.
• Punctuality – Being on time for meetings and discussions as agreed. Being late is often viewed as  unprofessional.
• Being transparent – Taking responsibility for any mistakes made in relation to your natural ingredient. Take full ownership and apologise to European buyers immediately of any errors you are responsible for. Following this, implement measures ensuring similar mistakes are not repeated and inform buyers about them as this provides them with reassurance.
• Being honest – Do not make false claims about your natural ingredient as you will have to substantiate them later. For example, do not claim to have certification, such as organic or fairtrade when you do not.
• Meeting agreements – Meeting contractual agreements made with buyers. For example, quality, quantity and delivery agreements. Quickly and clearly communicate any changes to buyers. Additionally, constructively work with buyers to find solutions to any unexpected issues.

The importance of professionalism cannot be highlighted enough. Competition is fierce in the European natural health product ingredients sector and European buyers are inundated with requests from potential suppliers. It is therefore important that you go the extra mile when doing business with European buyers, especially when it is your first time doing business with them.

4. Provide organised documentation

Ensure you have well-prepared and structured technical dossiers available because European buyers increasingly require exporters to provide them with these dossiers in order to verify whether you meet their requirements. Technical dossiers should be ready before you approach buyers, as this will show that you are reliable and add credibility to your business. These are key reasons to follow this tip. If you opt not to follow this tip, it might put you at a disadvantage when trying  to enter the European market and successfully trade in it.

European buyers of natural ingredients for health products expect exporters to provide them with well-prepared and structured technical dossiers. This is because these will help demonstrate that you meet their requirements, such as specific quality specifications.

For example, a buyer stated in an interview that “we require a lot of documentation from the suppliers to make sure that goods meet our specifications”. Additionally, when asked about the need to have technical dossiers, one buyer said that “documentation is important”, with another buyer stating “we need to have these”, while another buyer said: “yes, 100 percent”.

Your natural ingredients dossier should contain up-to-date information about your ingredients. This includes information about the effectiveness, safety, patents, claims, sustainability, production methods, health and safety and traceability of your ingredients.

A technical dossier contains documents such as Technical Data Sheets (TDS), Safety Data Sheets (SDS) and Certificates of Analysis (CoA). Table 2 lists what is contained in the SDS, TDS and CoA to help you prepare these three important pieces of documentation.

Table 2: Contents of SDS, TDS and CoA

Safety Data Sheet (SDS)	Technical Data Sheet (TDS)	Certificate of Analysis (CoA) which corresponds to
Product description	Product description	Data mentioned in the TDS
Product classification	Product classification	Pre-shipment samples approved by buyer
Hazard identification	Quality analysis	Contractual agreements with buyer
Information on safety measures	Information on applications
	Certificates

Other important documentation includes the certificate of origin in addition to documentation containing information on the application of your ingredients in the health sector. European buyers often require their suppliers to complete questionnaires to check their compliance with EU regulations. You must answer questionnaires honestly and truthfully.  

It is important to note that you will have to invest time and resources into preparing the documentation European buyers require. Strict EU regulations and increasing quality standards put a lot of pressure on buyers to meet their customers’ needs. It is therefore essential that your documentation is organised and well-prepared.

5. Meet common buyer requirements

As an exporter of natural ingredients for health products, you need to comply with various mandatory and additional requirements of European buyers. This depends on whether you want to supply your ingredients to the nutraceutical industry, the pharmaceutical industry or the complementary and alternative medicine industry.

One reason why you should follow this tip is that it is likely to give you an advantage in your journey to enter the European market because buyers are your main entry points into the European market. Conversely, if you opt not to follow this tip, it will be to your disadvantage as it will have the opposite effect.

Quality

European buyers are mainly interested in the quality and safety of your ingredients. Indeed, one buyer of natural ingredients for health products stated in an interview, “it ultimately really it comes back to quality… quality, quality, quality… we need to be convinced that this partner is able to provide the quality”. According to another buyer, the “most important factor is quality”, while another buyer stated that exporters “need to meet our standards, and our quality standards are the main thing”.

Additionally, when asked what they look for in a new supplier from a developing country, one buyer answered, “first it’s the quality”, with another buyer commenting that “quality is the main focus”. Information concerning your natural ingredients’ quality and safety is generally presented in Safety Data Sheet, Technical Data Sheet and Certificate of Analysis. See tip four of this study for further information about this. As such, you should provide buyers with well-prepared copies of these three documents for every product you are offering.

European buyers often have specific requirements for natural ingredients as this determines their use in health products. One buyer stated “there is a whole range of things” concerning the quality requirements they have. For example, European buyers of turmeric seek turmeric with higher levels of curcumin, as curcumin content is connected to turmeric’s anti-inflammatory properties – which are important when formulating a health product. You should therefore find out if buyers have specific requirements and only agree to meet them if you can.

Consistent quality is central to the manufacturing of health products and, as a result, it is very important to European buyers. You should therefore provide buyers with a standardised high-quality product across all orders in suitable packaging as per order volumes. For example, high-quality moringa powder in in kraft paper bags that can hold 25 kilograms for an order of that size.

Having certification demonstrating your compliance with a food management system based on standards has several advantages. Among these is the fact that it gives your company credibility, as it shows your commitment to delivering high-quality products, and it helps boost your image. It also helps you demonstrate that you comply with the legal requirements. Examples include:

• International Organization for Standardization (ISO) 22000 food safety management certification;
• ISO 9001:2015 quality management systems certification; and
• Hazard Analysis and Critical Control Points (HACCP).

Certification and compliance with standards are also seen as a sign of credibility and quality as it suggests that your ingredients are of superior quality in addition to helping you prove the traceability of your ingredients. Therefore, more and more European buyers are demanding these certifications. Additionally, a transparent supply chain can help you negotiate with buyers. These aspects are becoming increasingly important for European buyers as demand for certified products is increasing.

Figure 2: Examples of certification and standards

Source: Various

Other common buyer requirements

Other important buyer requirements include traceability of your ingredients, sustainable production methods, packaging and transportation. Understand that buyers’ requirements can differ. For example, one European buyer of natural ingredients for health products revealed it is “important that we do not have more than 25 kilograms in a bag” whilst another said that their specific requirement was for the product to be packaged in “20 kilo bags with woven plastic material”. 

Some buyers only purchase organic or fair trade certified ingredients. There is a growing market for organic products in Europe, a trend that is expected to continue. When asked about the need for organic certification which is a sign of quality, one European buyer stated “organic certification is always needed”, with another buyer stating: “yes 100 percent, I don’t think any client would buy from us if it was not organically certified”. Another buyer said: “the vast majority of things we buy are organic, so they would need to be organic certified”.

Figure 3: EU organic certification logo

Source: ec.europa.eu

European buyers asses the quality of your company by evaluating the environmental sustainability and social standards it upholds. European buyers are therefore expecting suppliers to meet environmental and social standards. With regard to social standards, for example, one buyer commented: “we’ve got a lot of customers who require it… it gives us a bit of legitimacy and it’s something we value ethically”.

Additionally, meeting environmental and social standards is often part of a company’s policy and strategy. For example, when asked about the importance of meeting social standards, a European buyer commented: “we want to build a long-term relationship with our partners and that is why it is important that they earn fair money for their work, reflecting the value of their work”. Buyers have also stated that they use environmental and social standards in their marketing stories.

Meeting UNCTAD BioTrade Initiative BioTrade Principles and Criteria, alongside the FairWild Standard, demonstrates your commitment to environmental sustainability. Meanwhile, having FLO Fairtrade certification and/or meeting the Fair for Life standards demonstrates your commitment to upholding social standards.

Figure 4: Examples of fair trade certification schemes

Source: Various

The European natural ingredients for health products sector is competitive. You should therefore ensure you follow this tip and try to meet common European buyer requirements as it can increase your chances of entering the European market and successfully trading in it.

6. Send high-quality samples to interested buyers

European buyers of natural ingredients for health products usually require prospective suppliers to provide them with samples. This is to determine whether your natural ingredient complies with the EU’s mandatory requirements and their specific buyer requirements. For example turmeric buyers will want to know about its curcumin content.

One key reason to follow this tip is that it is likely to increase your chances of starting a relationship with European buyers. If you opt not to follow this tip, on the other hand, is likely to lead to them losing interest in doing business with you.

Before deciding whether to do business with you, buyers usually require samples to check whether your product meets their requirements and ensure it is not adulterated and contaminated. For example, a buyer commented: “we undertake testing of samples, so suppliers have to be able to supply us with free samples”. Another buyer stated that “we undertake very stringent testing here”, with another buyer commenting: “we analyse in full detail… we need the best quality, and that’s why we need to do this”.

Explaining the process, a buyer stated that “we get multiple samples per batch and have them analysed in a lab before we even look to purchase… and when it arrives, we carry out exactly the same process”, and subsequently that “we make a judgement call on the basis of that analysis”. You should therefore always send high-quality samples to buyers, as it will likely to increase your chances of successfully entering the European market.

When buyers request a sample, you should ensure you provide them with high-quality samples according to their request by the agreed deadline. This usually concerns the:

• type of sample (for example, conventional, organic and/or fairtrade);
• quantity (for example, 250 grams of moringa powder); and
• packaging (for example, kraft paper bag and/or steel drum)

After establishing a trading relationship with suppliers in developing countries buyers regularly test natural ingredients they have purchased, usually on a per batch basis. For example, when asked whether they test their natural ingredients for health products every time they receive them, one buyer stated, “yeah sure, when we receive it, we do testing and analysis in a laboratory”. And another buyer stated “sure, yes, every batch”.

Thus, you should ensure you always supply natural ingredients of the highest quality. Failing to do so may result in buyers rejecting your natural ingredient, you incurring penalties and the termination of your business relationship with them

Figure 5: Turmeric powder sample

Source: Alibaba

7. Prepare yourself thoroughly before attending trade shows

Attending trade shows is a key part of your business development activities. Industry events and trade fairs offer opportunities to network, increase your brand awareness and meet with potential buyers. It is important that you prepare yourself in advance because attending and exhibiting at trade shows requires a lot of planning. The main reason to follow this tip is because it will likely increase your chances of entering the European market. If you opt not to follow this tip, you could lose out on an opportunity to do business with European buyers.

The global COVID-19 pandemic poses serious safety risks to human health. As a result, most trade fairs were postponed and/or cancelled in 2020 and 2021. Reasons for this include lockdown measures and restrictions placed on large events by governments and authorities to prevent the spread of COVID-19. Most trade fairs are expected to resume in late 2021. Thus, trade show organisers are creating online events as alternatives. These tips apply to both online trade events and the physical trades shows once they resume.  

Ensure you find out who will be attending trade shows. You can do this by accessing the exhibitor lists that are usually made available online on trade show’s websites. Decide and prioritise what companies you want to target. Reach out to them beforehand and let them know that you would like to arrange a meeting with them.

Be prepared to answer questions about your company and ingredients and have your documentation ready. Ensure you train your staff so they can handle queries about your business. Preparing a list of expected questions and coaching your staff on how to answer them is one way to do this. If you are unable to answer, let your contact know that you will follow up after the trade show. Examples of questions include:

• What are the product origins? Where are they produced?
• Are you currently selling to Europe? If so, who are your distributors?
• What are the applications of these ingredients? What products can they be used in?
• What volumes can you supply? Can you meet their minimum volume requirements?
• Are your ingredients certified? Are they  organic and fair-trade certified, for example?
• What are your payment terms and are they negotiable?
• Do you offer a discount if they buy larger volumes?
• What quality management processes do you have in place to ensure consistency?
• What process do you follow if the materials do not arrive at the agreed location?

You can use mobile technology, such as apps on mobile phones, to scan badges of attendees or take a picture of their business cards. Ensure all your marketing materials and business cards are up to date, so that people can contact you easily. Always ensure you take notes on all your potential clients, including about their requirements, so you can follow up after the trade show. Ensure you carry out a debriefing and follow up on all the contacts that you gathered during the trade show.

If you fail to prepare yourself and your staff before attending a trade show, you may end up leaving the wrong impression. This could damage your image and reputation in the long run. You should therefore follow this tip and prepare yourself thoroughly before attending trade shows.

8. Your sales pitch and marketing: Telling buyers what makes you unique

The European natural ingredients for health products sector is competitive. European buyers receive lots of offers from prospective suppliers of natural ingredients for health products in developing countries. A key reason to follow this tip is that it is likely to increase your chances of successfully entering the European market. Meanwhile, if you opt not to follow this tip, that will be to your disadvantage, as it will give your competitors an edge on you.

It is important for you to prepare your sales pitch depending on who you are dealing with. Ensure you know the position of your contact and adjust your sales pitch accordingly. For example, purchasing managers may be more focused on the quality and quantity of ingredients, whereas sales representatives may be more concerned about what their clients would be interested in, such as claims, effectiveness and marketing stories. You can find examples of sales pitch templates online.

Figure 6: Modern sales pitch transformation

Source: Upwork

There are several unique selling points that you can use to catch the attention of European buyers. These include:

• The quality of your natural ingredients;
• The price – guaranteed lowest price, price matching, free shipping, bulk discounts, special offers;

Sustainability – the sustainable practices that you adhere to, including in the social aspects of your production methods. Every European buyer is different; thus, it is important that you create a basic template for your sales pitch which covers your company’s most important unique selling points. You can then personalise the pitch accordingly.

For example, there is growing demand for certified products in the European market, a trend which is expected to continue. Thus, you should ensure you highlight any certifications you hold such as being organic- and fair trade-certified when you make your sales pitch to buyers which purchase certified ingredients, as these are unique selling points of your ingredients It also adds credibility to your ingredients  and is often seen as a sign of quality by buyers.

Marketing stories are becoming increasingly important for European buyers and manufacturers of health products. For suppliers of natural ingredients in developing countries, in particular, they are a good way to highlight your unique selling points. For example, marketing materials should include information about certifications and standards you hold for your ingredients, information about  quality and about any sustainability aspects, as these are important unique selling points.

The Zimbabwean exporter of baobab products to the European market B’Ayoba is an example of company which has done this successfully; it clearly communicates its company’s unique selling points on its company website. This includes the certifications and standards it holds in addition to information with respect to sustainability.

Figure 7: B’Ayoba website

Source: B’Ayobaba

By combining the unique selling points of your natural ingredients, you make yourself more appealing to European buyers. You must therefore do this wherever possible. For example, if you are an ethical company that produces certified organic and fair trade ingredients, then state this. It should be communicated in your sales pitches and marketing materials.

9. Partner with export agencies and industry groups

Joining an export promotion programme or working with industry groups helps you trade with European buyers. A key reason to follow this tip and participate in an export promotion programme is that it provides you networking opportunities to connect with prospective  buyers. Thus, you should consider following this tip and joining an export promotion programme. If you opt not to do so, it will be to your disadvantage, as you will miss out on this opportunity to increase your chances of successfully entering the European market.

Various export agencies provide specialist knowledge and support to exporters looking to enter new markets. A key advantage of joining an export promotion programme is that it is often cost-free. However, you may be asked to make certain commitments regarding how you operate as a business based on what you have learnt whilst on the programme.

Tailored support offered by export agencies can include training, coaching, distance guidance, trade fair participation and business matching. This support is often delivered by European sector experts who are well equipped to advise exporters on how to access the market. For example, such experts know the requirements and expectations of European buyers.

The Centre for the Promotion of Imports from Developing Countries (CBI)

The Centre for the Promotion of Imports from Developing Countries (CBI) provides a wide range of services to exporters from developing countries wishing to enter the European market. Services offered by CBI include export coaching programmes, training and coaching, distance learning and guidance, company visits, market information and multiple trade fair participation.

The Swiss Import Promotion Programme (SIPPO)

The Swiss Import Promotion Programme (SIPPO) – provides support to chosen Business Services Organisations (BSOs) that help exporters increase their exports to new markets. BSO employees receive expert training and coaching in their home country, which they then use to help exporters.

Import Promotion Desk (IPD)

The Import Promotion Desk (IPD)  provides exporters from developing countries  opportunities to meet European, particularly German importers. Additionally, the IPD also prepares market reports that help exporters enter the European market.

The International Trade Centre (ITC)

The International Trade Centre (ITC)  is a developmental agency of the United Nations that promotes sustainable trade. Most of its activities are aimed towards exporters. ITC provides export management, supply chain management, quality management, packaging, and marketing and branding programmes respectively.

The ITC offers publications and a SME Trade Academy providing online courses (some of which are free). If you want to become a successful exporter of natural ingredients for health products, then courses such as ‘Export Sales and Negotiation’ and ‘Helping SME’s Generate Export Business’ may be helpful for you.

Non-governmental organisations

Examples of non-governmental organisations helping exporters in developing countries enter the European market include:

• Africrops is a non-governmental organisation providing exporters in African countries with consulting services to help them access the European market. Specific services offered by Africrops include training, coaching and capacity building.
• The Institute for Agriculture and Trade Policy (IATP) is a non-governmental organisation that helps exporters export to new markets.
• The Asian Trade Promotion Forum (ATPF) offers tools such as capacity-building programs, networking events and various cooperative projects that strengthen trade activities of its members.
• The International Centre for Trade and Sustainable Development (ICTSD) provides advocacy on sustainable development in addition to training programmes for trade, information and research services.
• The International Chamber of Commerce (ICC) promotes cross-border trade and investments and provides services to enterprises.

Joining a trade promotion programme is very important for exporters in developing countries. The European market is very competitive with stringent regulations. It is therefore necessary for exporters of natural ingredients from developing countries to follow this tip and take advantage of all the resources available to increase your chances of success.

Figure 8: Logos of well-known government agencies and non-governmental organisations supporting exporters in developing countries

Source: Various

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