Entering the European market for frozen berries

Food processing segment

In the European food sector, the industries in which frozen berries are most commonly used include the following:

• Jams and spreads industry is the largest user of frozen strawberries and frozen raspberries. In the production of jams, 40% to 50% of the final product weight consists of frozen berries. However, the proportion of fruit used in jams is increasing as jam producers want to increase the fruit content and reduce the sugar level. Labels reading “low sugar” or “high fruit” are increasingly used. In addition, “no sugar added” jams are increasingly being promoted by the largest European producers.
• Beverages industry uses frozen berries for the production of juices and smoothies. While frozen berries are used for making smoothies at home, industrial smoothie producers more commonly use frozen berry purees. Depending on the blend, frozen berry purees are often mixed with banana puree (for a thick consistency) and with different types of fruit and vegetable juices to achieve specific flavours. During the puree production process, the berry seeds are usually removed, but in smoothies, they are preferred as they give the final product a natural look.
• Bakery and confectionery industry use frozen berries in the production of cakes, tartlets and other desserts. In addition, the bakery industry uses significant quantities of fruit fillings for pies, pastries and other products. Fruit fillings are commonly supplied by specialised food ingredient companies. Those companies use frozen berries to produce the fillings.
• Dairy industry uses berries mainly for the production of fruit yoghurts and ice creams. However, frozen berries are usually not used directly by dairy producers but as an ingredient in fruit preparations. Occasionally, berry crumbles are used as ingredients in ice creams with natural flavours.

Retail segment

Retailers sometimes buy directly from developing country exporters, but in most cases, they are supplied via intermediaries. Recently, the retail sector has become increasingly polarised, seeing a shift towards either the discount or high-level segments. Consolidation, market saturation, fierce competition and low prices are key characteristics of the European retail food market. Currently, online retail sales of frozen berries account for an insignificant share of the market but this share is expected to increase in the near future.

The leading food retail companies in Europe differ per country. The companies with the largest market shares are Schwartz Gruppe (Lidl and Kaufland brands), Carrefour, Tesco, Aldi, Edeka, Leclerc, Metro Group, Rewe Group, Auchan, Intermarché and Ahold (Delhaize, Albert Heijn and several other brands). In addition, there are several retail chains in Europe which specialise in the supply of frozen food such as Iceland (the United Kingdom) or Picard Surgelés (France).

Foodservice segment

The foodservice channel (hotels, restaurants and catering establishments) is usually supplied by specialised importers (wholesalers). The foodservice segment often requires specific packaging of frozen berries in weights ranging from 1kg to 5kg, which is different from the requirements for bulk or retail packaging . Some catering companies have specialised in the supply of frozen fruit mixtures for smoothie bars and to restaurants such as Projuice (the United Kingdom), Smoothie Solutions (Spain) or Juice Factory (Austria).

Through what channels do frozen berries end up on the end-market?

The most important channel for frozen berries in Europe is specialised frozen fruit importers/wholesalers, some of which are also referred to as food ingredient suppliers. Although the largest user of frozen berries is the fruit processing industry, in most cases these players do not import directly but rather via specialised importers. Sometimes frozen packaged berries are sold directly to European retail chains. However, in most cases, trading companies act as intermediaries and participate in the tendering procedures of retail chains.

Figure 2: European market channels for frozen berries

Importers/wholesalers

In most cases, importers act as wholesalers. Importers/wholesalers re-sell frozen berries to either food processors or packers. Some importers are also equipped with packing equipment and they can sell to final market segments directly.

For new suppliers, the challenge is to establish lasting relationships with well-known importers, as they usually already work with selected suppliers. Well-known importers perform audits and visit producing countries on a regular basis. Many new contacts find they must offer the same quality at lower prices than their competitors, at the start of the relationship.

The positions of the importer and food manufacturers are put under pressure by retailers. The higher demands imposed by the retail industry determine the supply chain dynamics from the top down the chain. The pressure translates into lower prices but also added value aspects in the form of “sustainable,” “natural,” “organic,” or “fair trade” products. Transparency in the supply chain is needed. To achieve this, many importers develop their own codes of conduct and build long-lasting relationships with preferred developing country suppliers.

There are many importers that specialise in frozen products. They often import a wide range of frozen products, aside from frozen berries. Some examples of large importers in the European frozen berry market include Crops (Belgium) Greenyard Frozen (Belgium), Dirafrost (member of the Austrian AGRANA group), Binder International (Germany), Descours (France) and ARDO (Belgium).

Food processors

Food processors are already regarded as a specific segment within the frozen berry market. Some companies are specialised as intermediaries between frozen berry suppliers and industrial users. Those companies specialise in the production of fruit fillings and preparations used in the bakery, yoghurt, confectionary or ice cream industry. Those fruit preparations are often made from frozen fruit as the main ingredient. Ingredients are typically customised for each client and may include sugar, gelling agents, thickeners or concentrated juice.

Fruit preparation producers usually produce a wide range of products and act as food ingredient suppliers for many food industries. Examples of food ingredient suppliers which, among other products, offer fruit preparations are Kerry (Ireland), Döhler (Germany), FDL (the United Kingdom) and AGRANA (Austria). Furthermore, several famous producers of jams and fruit spreads also offer fruit preparations. Zentis (Germany), Zuegg (Italy) and Andros (France) are a few examples of such companies.

Packing companies

Frozen berry packing companies are usually importers but also re-pack imported berries under their own brand or private label. In some cases, suppliers from developing countries pack berries directly for retailers in the European Union. UK based equity firm Permira (owner of Iglo Group – branded frozen food), Italian Eurofood (Green Ice frozen berry fruit production), the Swedish based Findus Group, Polish Hortex Holding and German Frosta are some of the largest European companies in the frozen berry retail segment. Some of the importers already mentioned, including Crops and Ardo, also supply their own brands to the retail segment.

What is the most interesting channel for you?

Specialised importers seem to be the most useful contact if you aim to export frozen berries to the European market. This is specifically relevant for new suppliers, as supplying the retail segment directly is very demanding and requires considerable investments in the area of quality and logistics. Importers of frozen berries are always looking for new supplying countries as they would like to reduce their dependence on Serbia and Poland.

Importers are usually quite knowledgeable when it comes to the European market and they closely monitor developments in frozen berry producing countries. Therefore, they are your preferred contact, as they can inform you in good time about market developments and provide practical advice about exports. Normally they import other types of frozen fruit and vegetables as well, so offering other frozen products in addition to frozen berries can increase your competitiveness further.

3. What competition do you face on the European frozen berries market?

Which countries are you competing with?

The leading frozen berry suppliers to Europe are Poland and Serbia. Those two countries supply two-thirds of all frozen berries to Europe, followed by Spain. Poland specialises in the production of a wide range of frozen berries and holds a particularly strong position in the supply of frozen strawberries, and black and red currants. Serbia is more focused on the supply of frozen raspberries and frozen blackberries. Apart from the three leading supplying countries, the supply of frozen berries from Morocco, Egypt and Ukraine is also on the rise.

Chile and Mexico, holding the third and the fourth position in the global export of frozen berries, do not export significant quantities to Europe. Due to their geographical location, both countries export most of their frozen fruit to the United States, Canada and Japan. Chile is famous for its exports of frozen raspberries, while Mexico increasingly exports frozen blackberries.

Poland, the leading supplier of frozen berries to Europe

Poland is the leading producer and supplier of frozen strawberries, black and red currants and the second‑ranked supplier of frozen raspberries to Europe. In 2018, Poland exported more than 230 thousand tonnes of frozen berries. Of this quantity, 41% were frozen strawberries, 23% frozen raspberries and 21% black currants. Exports of frozen black currants (+12% per year) showed the highest growth rate. Exports of black currants from Poland increased from 28 thousand tonnes in 2014 to 45 thousand tonnes in 2018.

In Poland, berry fruit is produced on relatively large farms as compared to the rest of the competing countries. In terms of strawberry production, Poland ranks second in Europe and more than 80% of the strawberries are used for freezing. In order to increase the supply, Poland also imports significant quantities of frozen strawberries from other countries. The leading strawberry variety used for freezing is the late summer variety Senga Sengana which is characterised by its high Brix value.

The production of raspberries is characterised by the high proportion of autumn varieties (such as Polka and Polana) but also by the increasing production of summer varieties such as Glen Ample. Another characteristic is the increased use of mechanical harvesting due to high labour costs. Poland is also the largest European producer of black and red currants in Europe. The majority of berries in Poland are produced in the Lubelskie region.

Around one-third of Polish frozen berries are exported to Germany, followed by the Netherlands (10%), Belarus, France and Belgium. Belarus is the fastest-growing export destination, purchasing 5000 tonnes in 2014 compared to 19,000 thousand tonnes in 2019.

Serbia, the world leader in the production and export of frozen raspberries and blackberries

Serbia increased its exports of frozen berries from 88,000 tonnes in 2014 to more than 120,000 tonnes in 2018. The leading European destination for Serbian frozen berries is Germany, followed by France and the United Kingdom. The United Kingdom saw the biggest increase in imports, from 4000 tonnes in 2014 to more than 9000 thousand tonnes in 2018.

Around 75% of Serbian production and export of frozen berries consist of frozen raspberries and 20% of frozen blackberries. The leading raspberry variety used for freezing is Willamette, which is prized by the fruit processing industry for its intense flavour and high Brix level. The second-ranked variety is Meeker followed by several others. Recently, Serbian producers started to increase production areas of raspberry cultivars aimed at the export of fresh berries. The leading blackberry variety is Cacak (without thorns), followed by Thornfree.

In Serbia, frozen berry production takes place mainly in the western part of the country with the highest concentration of facilities around the Municipality of Arilje. Willamette raspberries from the Arilje area, in particular, are valued by processors. Those raspberries have a protected designation of origin in Serbia. Serbia’s organic frozen raspberry production  has increased in recent years.

Spain, increasing export of frozen strawberries

Spain is the leading exporter of fresh berries in Europe. The surplus of production is often processed into frozen fruit. Spain produces more than 370,000 tonnes of fresh strawberries and processes/exports around 10% of this quantity. As a result, Spain is the second-largest supplier of frozen strawberries in Europe. In 2018, nearly 40 thousand tonnes of frozen strawberries were exported. The top three European destinations for Spanish frozen strawberries are Germany, France and the United Kingdom.

In Spain, the majority of the strawberries are produced in the Andalusia region, with the highest concentration of producers located around the city of Huelva. Fresh strawberries are produced in greenhouses all year round with a peak in production between February and May. However, strawberry varieties used for freezing are mainly harvested between March and June as early varieties have a lower high Brix value than later varieties. Some of the Spanish companies also source frozen strawberries from Morocco.

Morocco, emerging developing country supplier

Morocco is a significant producer of both fresh and frozen berries. In terms of frozen berry fruit, frozen strawberries are the only product of which a significant amount is exported. Due to Morocco’s favourable climate, the country can produce and export strawberries during Europe’s winter season when the prices are higher. Still, most of  the strawberries produced are used for freezing. In 2019, Morocco exported more than 64 thousand tonnes of frozen strawberries to Europe, with Spain, the Netherlands and Belgium as the leading export destinations.

Spain, the Netherlands and Belgium are the leading export destinations for Moroccan frozen strawberries because of the established investments in and partnerships with Moroccan processors. For example, the company Frigodar is a Spanish-Moroccan partnership producing more than 5000 tonnes of frozen strawberries. Other examples are the leading Dutch processor SVZ, which started  freezing strawberries in late 1990 and Dutch company Messem, which produces frozen strawberries in Morocco for the European market. Exports to Belgium are supported through investments from Belgian company Dirafrost which has a freezing facility in Morocco.

Egypt sees sharp rise in exports of frozen strawberries to Europe

Egypt has seen the highest growth in exports of any of the developing countries. European imports of frozen strawberries from Egypt have more than trebled over the last five years. Imports increased from 17 thousand tonnes in 2014 to 60 thousand tonnes in 2018. Aside from frozen strawberries, Egypt also exports fresh strawberries.

Ukraine, the leading supplier of frozen wild blueberries

Ukraine is steadily increasing its exports of frozen berries to Europe. The leading products exported to Europe are frozen raspberries and frozen wild blueberries (Vaccinium myrtles). Frozen wild blueberries, in particular, are valued as an ingredient in the fruit processing industry due to their intense colour and stronger flavour compared to cultivated blueberries. The main target market for Ukrainian frozen blueberries is Poland, accounting for 50% of exports. Other important markets include Austria, Lithuania and Czech Republic.

Apart from wild blueberries, Ukrainian exporters produce several other berries. Organic production and certification are increasing every year. One of the increasingly exported berries is Aronia (chokeberry).

Which companies are you competing with?

There are many companies active in the production, processing and export of frozen berries which supply the European markets. It is not easy to identify  a single company in each of the supplying countries as representative of the leading suppliers. Each company has its own strategies for exporting to the European market. Therefore, the examples given below illustrate just a few of the leading exporters as there are many other budding companies which are not mentioned in this study.

One of the common characteristics of the leading frozen berries suppliers to Europe is vertical integration. This is done either by intensifying cooperation with farmers or by expanding a company’s own production areas. These activities are mainly aimed at increasing the traceability of berries which have been collected and processed. Another characteristic is the intensification of food safety control through frequent laboratory testing and food safety certification.

Poland

The number of cold store facilities in Poland that process frozen berries is estimated at more than 100.. These companies are spread across the whole country, but the majority are located in eastern Poland. The concentration of frozen berry companies is particularly high in the Lublin and Masovia regions. One important example of a successful Polish company is Real.

Real is one of the largest producers of frozen berries in Poland and Europe as a whole. Continuous investments since 1990 have enabled the company to establish three freezing facilities, one cold storage facility and two units for the production of concentrated juices. Its cold store facility is one of the largest in Poland. To increase its competitiveness, the company obtained BRC certification (in order to more easily penetrate the United Kingdom market) and IFS certification (in order to more easily penetrate the German and other EU markets). To increase the quantity and range of products, Real has forged partnerships with other producers including Quadrum Foods. Quadrum Foods is one of the leading Polish importers and exporters of frozen fruits and vegetables.

Other examples of frozen berry suppliers in Poland include Dawtona, VF-Concept, Bimiz and Danex.

Serbia

The number of frozen berry exporters in Serbia is estimated at more than 150. This means that there are a great many small processing facilities. This stands in contrast to Poland where the production is dominated by large processors. Some of the smaller processors also cooperate with larger producers. Most of the berry freezing and processing facilities are located in western Serbia.

The presence of large European frozen fruit traders with cold storage and freezing capacities is increasing in Serbia. Some examples include Crops & Partners (part of the Belgian Crops network), Mondi Lamex (part of the Lamex network which is headquartered in the United Kingdom) and the company Yube (part of the Belgian subsidiary Dirafrost, which is part of the Austrian Agrana group). Several important European frozen berry traders also have administrative offices in Serbia.

Sirogojno is the largest frozen berry producer and exporter in Serbia. Sirogojno has developed a large network of fruit suppliers over the years. In order to support producers, the company supplies farmers with agricultural inputs, provides training and enters into longer-term contracts to ensure stable supply. The company has obtained a few different food safety certifications in order to improve competitiveness in different European markets. Its continuous investments in quality are recognised by the European buyers. This is evidenced by the supply of frozen retail-packed private label berries directly to some of the European retailers. Aside from the production of frozen berries, the company has also developed its production of sugar-infused and freeze-dried berries.

Other examples of leading frozen berry exporters in Serbia include Zadrugar, Elixir, ZA Fruit, Agropartner and Frikos (the last of which is producing more and more organic frozen berries).

Companies from other supplying countries

Examples of other frozen berries suppliers to Europe are:

• Spain – Marín Giménez, Bionest (largest Spanish supplier of organic frozen strawberries), La Senda, Ducal Export,  Fruveco and Pedaneo.
• Morocco – Frigodar and Messem, as mentioned above. Other examples include Raimy and Frozen Fruits International.
• Egypt – Kenzy Group, Alfafrost, Mima Foods, Verde, Frosty Foods, Golden Pack and Ajwa
• Ukraine – Atlas, Galfrost, Highberry and Darlissad.

Which products are you competing with?

The main alternatives to frozen berries are fresh berries. Many consumers (mostly erroneously) think that freezing can have an impact on the nutritional value of the fruit and reduce the quantities of some nutrients such as vitamins. Fresh fruit consumption is officially supported by European authorities such as the European Fresh Produce Association (Freshfel). The most well-known initiative is “5 a day” campaign, which advocates  consuming five portions of fresh fruits and vegetables per day. The largest European fresh berry suppliers are Spain, Portugal, the Netherlands and Belgium.

4. What are the prices for frozen berries?

The prices of frozen berries vary by the type of berry. Wild-picked berries (such as blueberries or wild small strawberries) are the most expensive of all frozen berries. Frozen raspberries tend to be more expensive than frozen blackberries, while frozen strawberries are the cheapest. Another factor influencing the prices is the form in which they are exported. Berries sold in blocks are the cheapest, while IQF berries are the most expensive.

In addition, export prices depend on the cultivar. For example, exported Serbian frozen raspberries Willamette and Meeker are usually more expensive than Polish frozen raspberries Polka and Polana. Moreover, Polish Senga Sengana frozen strawberries are more expensive than  cultivars from Morocco and Egypt. Export prices of frozen berries also depend on the season. In the seasons with low harvests, prices often increase and vice versa. Recent export price developments are as follows:

• In 2019, Polish EXW frozen Senga Sengana strawberry prices ranged from €1.60/kg to €1.70/kg depending on the size and class. This represented a decrease compared to 2017 when prices were above €2/kg and 2018 when prices were between €1.60/kg and €2/kg. In 2019, prices of Egyptian and Moroccan products were lower and fluctuated around the FOB level of €1/kg to 1.20/kg.
• Serbian frozen blackberries were exported at €1 to 1.20/kg EXW.
• The export prices of frozen IQF raspberries range from €2.50 to €3/kg EXW, while raspberry crumble was sold at around half of the price of IQF berries.
• In 2019, frozen black currant prices ranged from around €0.65 €0.70/kg EXW.

As the majority of frozen berries are sold to industrial users in Europe and a much smaller proportion to the retail segment, the following price breakdown is very rough and developing country suppliers can use it only to get a general idea of the IQF berry market. For example, prices of retail packed frozen strawberries usually vary between €4 and €6, depending on the packaging and the retail price of frozen raspberries is usually between  €6/kg and €8/kg (with the price of organic raspberries above €10/kg). The retail price of mixed frozen berries is somewhere between price of strawberries and raspberries.

Table 1: Breakdown of retail prices for frozen berries

Steps in the export process	Type of price	Price breakdown	Example (IQF raspberries, price per kg)
Production of fresh berries	Raw material price	15%-20%	€1
Handling, freezing and selling bulk product	FOB or EXW price	40%-50%	€2.50
Shipping	CIF price	42%-52%	€2.60
Import, handling and packing	Wholesale price (including value-added tax)	60%-70%	€3.50
Retail sales of the final packed product	Retail price	100%	€5

This study was carried out on behalf of CBI by Autentika Global.