EU STRATEGIC MARKETING GUIDE 2002

EU STRATEGIC MARKETING GUIDE 2002

SPICES AND HERBS

VOLUME I

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SPICES AND HERBS

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EU STRATEGIC MARKETING GUIDE 2002

SPICES AND HERBS

Compiled for CBI by:

ProFound
ADVISERS IN DEVELOPMENT

in collaboration with
Ir. A.F. Eshuis

November 2002

DISCLAIMER
The information provided in this guide is believed to be accurate at the time of writing. It is, however, passed on
to the reader without any responsibility on the part of CBI or the authors and it does not release the reader from the
obligation to comply with all applicable legislation.
Neither CBI nor the authors of this publication make any warranty, expressed or implied, concerning the accuracy
of the information presented, and will not be liable for injury or claims pertaining to the use of this publication or
the information contained therein.
No obligation is assumed for updating or amending this publication for any reason, be it new or contrary information
or changes in legislation, regulations or jurisdiction.

New CBI Publication with new format and contents, partly replacing CBI Market Survey Spices and Herbs,
March 1999.

Photo courtesy:
ProFound

CONTENTS
INTRODUCTION

DOING BUSINESS IN THE EU: REQUIREMENTS FOR ACCESS

1.1
Non-tariff trade barriers
1.1.1 Quality and grading standards
1.1.2 Trade-related environmental, social and health & safety issues
1.1.3 Packaging, marking and labelling
1.2
Tariffs and quota

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TERMS OF THE TRADE AND TRADE PROMOTION

2.1
Terms of the trade
2.1.1 The contract
2.1.2 Payment methods and delivery terms
2.1.3 Business practice
2.2
Trade promotion
2.2.1 Trade fairs
2.2.2 Trade press
2.2.3 Assistance with market entry

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MARKETING GUIDELINES
3.1
Product profiles
3.2
Market analysis
3.2.1 Country evaluation
3.2.2 Sales channel assessment
3.2.3 Company assessment
3.2.4 Determining the most suitable sales channel(s) and opportunities for strategic alliances
3.3
Building up a business relationship
3.3.1 Reviewing the products and the product range
3.3.2 Identifying a suitable trading partner
3.3.3 Drawing up an offer
3.3.4 Handling the contract
3.3.5 Sales promotion

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INTRODUCTION
This Strategic Marketing Guide offers a practical
handbook for exporters engaged, or wishing to engage,
in exporting spices and herbs to the European Union.
It aims to facilitate exporters in formulating their own
market and product strategies through the provision of
practical information and a methodology of analysis
and ready-to-fill-in frameworks.

In order to judge the attractiveness of the market,

sales channel or customer you should use/develop a
classification or score system.
For more detailed information on market research,
reference is made to CBIs Export Planner 2000.

It is of vital importance that exporters comply with the

requirements of the EU market in terms of product
quality, packaging, labelling and environmental
standards. These items and other issues, which
seriously have to be taken into account when entering
the EU market, are covered in Chapters one and two.
Chapter three offers a Business Guide or checklist for
exporters wishing to engage in exporting spices and
herbs to Europe. The guide consists of three parts:
Product profiles (in which a few interesting products
will be highlighted), a market opportunity analysis to
determine suitable sales channel(s), and a checklist for
building up a trading link.
Statistical market information on consumption,
production and trade, and information on trade structure
and prices and margins, which is required for the readyto-fill in frameworks, can be found in the matching CBI
EU Market Survey Spices and Herbs. The EU Market
Survey also includes contact details of importers, trade
associations, and other relevant organisations.
Market research
This EU Strategic Marketing Guide and the EU Market
Survey serve as a basis for further market research:
after you have read the market survey and filled in the
frameworks in this strategic marketing guide, it is
important to further research your target markets, sales
channels and potential customers.
Market research depends on secondary data (data that
have been compiled and published earlier) and primary
data (information that you collect yourself). An
example of secondary data is the EU Market Survey.
Primary data are needed when secondary data fall short
of your needs, for example when researching your
specific type of consumer about the acceptance of your
specific product. Sources of information are among
others (statistical) databanks, professional journals and
magazines, market reports, (annual) reports from
branch associations, but also shops in target countries,
products or catalogues from your competitors, and
conversations with suppliers, specialists, colleagues and
even competitors. After you have received/collected
your information, you should analyse it.

DOING BUSINESS IN THE EU: REQUIREMENTS FOR ACCESS

1.1 Non-tariff barriers

In recent years, regulation on food products has become
more complex and stringent. Regulation EC 178/2002
was adopted in 2002. It lays down the general principles
and requirements of food legislation, establishing the
European Food Safety Authority and laying down
procedures in matters of food safety. The regulation is
commonly known as the General Food Law, although it
is in principle not a law but a regulation.

labour intensive. Traditional planting methods are used,

production is often unplanned and drying conditions
(often open-air sun drying) are not carefully controlled.
There are no funds for research and development and
there is a lack of market information about the
consuming countries. Spices usually are regarded as
small cash crops, which are tended by small and
marginal farmers. Since cultivation takes place in rural
areas, the practices followed by farmers tend to be
rudimentary, often resulting in unclean products, which
are prone to microbiological contamination.

General rules for food hygiene are laid down in the

Directive 93/43/EEC. Hygiene is defined as all measures
to ensure safety and wholesomeness of foodstuffs.
The new regulation states explicitly that foodstuffs
cannot be placed on the EU market if they are unsafe.
This was, at least implicitly, already regulated through
national food law, but now there is an EU-wide explicit
regulation. Moreover, the regulation stipulates that it is
necessary to establish a comprehensive system of
traceability within food businesses. Due to increasing
consumer concern about food safety, the industry had
already started initiatives to pay attention to chain
management and labelling systems with which products
can be traced back to the producer. Now, legal measures
have also been taken by the European Commission to
deal with the issue of food safety.

Spices and herbs are primarily used in foods to

influence and improve taste and sometimes play a more
prominent role as a food preservative or as so-called
nutriceutical food products, which are used in
preventive health care systems. Spices are typically
used in foods, which are consumed raw, or are added to
foods after cooking, while herbs are frequently used
after saoking or infusion, without boiling. Often such
microbiological contamination and even occasional
salmonella contamination has been found in spices
and herbs. This has caused special concern and
authorities in all EU countries are increasingly applying
very stringent phytosanitary regulations on imports,
which are enforced by law.

The core aspects of the General Food Law will come

into force in January 2005. So despite harmonisation
efforts, exporters should realise that differences will,
until then, still exist between EU member states.
Their products should therefore continue to comply
with the legislation of the separate EU member states.
It should be noted, on the other hand, that until full
harmonisation, the individual member countries have
to mutually recognise each others legislation, which
implies that once a product is accepted in one EU
member state, this product can be freely exported to
the other EU member states.

Importance of research and development

The industrial sector is increasingly looking for more
added value in products and tends to require suppliers to
be partners, instead of simply suppliers. They prefer
suppliers to be more involved in the actual product
development and to come up with their own concepts or
ideas, which are often based on research and development.
In most developing countries, low priority is given to
research programmes on spices and herbs. However,
Indonesia and India have undertaken several successful
initiatives. Training programmes at various levels,
designed to give farmers, traders and exporters the
knowledge of how to improve the quality of spices, have
been organised. For example, the Spice Board of India
organises spice upgradation programmes and has set
up a quality and upgrading laboratory, which offers
analytical services to exporters for the analysis of spices
for physical, chemical and microbial contaminants.
Please refer to www.indianspices.com for more
information on the Spice Board of India and its activities.

Useful Internet sites

Integral text of the directives and regulations mentioned:
www.europa.eu.int/eur-lex/en/search.html
EU pesticide residue legislation:
http://europa.eu.int/comm/food/fs/ph_ps/pest/index_en.html
EU regulations on pesticides and other contaminants:
www.useu.be/agri/pesticides.html

The contamination of spices, particularly by pesticide

residues, is critical. Furthermore, with the banning of
ETO (ethylene oxide) and other fumigants in Europe
and consumers unwillingness to accept irradiated
foods, the eradication of bacterially loaded spices is a

1.1.1 Quality and grading standards

The bulk of spices and herbs entering international
trade are in whole and unground form. Spices are
cultivated mainly in small holdings or production units
and treated as inter-crops. This growing process is

priority issue on both environmental and health

grounds. Methods for decontamination have been
developed, based on high-pressure steam treatment, to
avoid irradiation and fumigation. Such steam treatment
is usually applied by the importer/processing industry
in the country of destination. Since importers prefer to
carry out this process as little as possible, importers
require, more than before, products with the lowest
possible microbiological count. Therefore, the need for
clean, safe, pure, natural and bacteria-free spices is of
utmost importance. Quality assurance should start at the
farm and should be thorough at all stages, right through
to final export of the products.

EU standards
The most popular specification for spices and herbs the
world over is the ASTA Cleanliness Specifications for
Spices, Seeds and Herbs. The unified ASTA, USFDA
Cleanliness Specifications for Spices, Seeds and Herbs
was made effective at the beginning of 1990.
Major producing countries have built up their facilities
to meet the requirements as per ASTA Cleanliness
Specification. The importing countries, which do not
have specifications for spices, request the exporting
countries to supply spices as per the ASTA
Specification.
The European Spice Association (ESA), representing
spice associations in EU countries, has developed an
ESA Contract which indicates minimum quality
standards for imported spices, methods of arbitration
and enforcement procedures. The ESA specifications of
quality minima for spices and herbs are the proposed
legal minimum standards for selling into the EU.
However, it must be emphasised that the quality
requirements of traders in major northern European
markets (Germany, The Netherlands, United Kingdom
and France) are generally much stricter. For an
overview of ESA specifications of and details on
quality minima for spices and herbs, please refer to
www.indianspices.com/html/s1490qua.htm

When ground or pre-packed (mixed) spices are

imported, it is expected that thorough testing for
contaminants or other residues will have already been
conducted in the producing country. The importance of
research in post-harvest technology and the testing of
mixed spices in the producing countries has become
crucial, if these products are to comply with the strict
quality requirements of international markets.

Sources of contamination
During the growth, treatment, transport, packaging or
production processes there are several factors, which
may cause the contamination of spices and herbs.
They are:
Excreta, which is one of the major contaminants.
The presence of rodent, animal or bird excreta/urine
renders a spice unclean. It may also make the spice
unsafe for human consumption, since it may carry
harmful bacteria such as Salmonella.
The presence of live or dead insects or insect parts,
which are another major contaminant, means that a
spice may be considered adulterated. If live insects
are present in any product at any time, the spice must
be treated to kill them.
Mould in spices, carried by spores or insects, can
affect the flavour quality of the product. Certain
moulds produce toxic substances, some of which are
known to cause cancer. Ginger, for instance, can be
particularly susceptible to mould growth, if it
becomes wet after the initial drying while in storage.
Extraneous matter, which covers a large group of
miscellaneous items. Stones, sand and dirt may
become incorporated into the product due to poor
harvesting, drying and processing practices. All
reduce the quality of the spices, are considered to be
harmful to individuals and should be removed before
further processing.
Chemical contaminants include herbicides,
insecticides and fumigants. Residues of these
chemicals are not allowed as they can present a
health risk. Their use on growing crops and stored
products must be strongly controlled.

The actual quality standards required are set primarily

by importers and major end users against the
background of the health and safety requirements
demanded by the Food and Drugs Act. The main
quality factors considered by traders in selecting spices
and herbs are appearance, flavour, aroma, colour,
volatile oil content and cleanliness.
Since 1996, there has been a ban on ethylene oxide as a
sterilising agent. Although sterilisation by irradiation is
efficient, there are objections: the products quality may
be changed and consumer attitudes to irradiated food
are negative.
Low moisture content in spices is said to make them
safer when irradiated. Since the process uses
radioactive isotopes, both the workers in irradiation
facilities and the people and animals in nearby
communities are at daily risk of exposure from potential
leaks. Furthermore, as radioactive materials must be
transported to and from irradiation sites, leaks and
traffic accidents pose a threat to people and land.
Irradiation can also result in the creation of new
chemicals in foods. These include known carcinogens
like benzene, formaldehyde and certain peroxides.
Irradiation may also destroy nutrients essential to
human health such as vitamin C, thiamin, vitamin E
and polyunsaturated fats. Relevant regulations are
included in a special decree for irradiated food in
the Food and Drugs Act in the individual EU member
states.

Steam sterilising, which provides an excellent method

of reducing bacteria count, is now being used more
often. Large processors use computer-controlled
processes of rapid steam heating of spices and herbs
under pressure and subsequent drying.

the complete set of measures, methods of sampling,

control and analysis including a registration system,
necessary for monitoring the product quality.
A quality control system is primarily the responsibility
of the producer himself, but also has to comply with
legal requirements and product specifications required
by buyers.

In general, requirements on cleanliness and admissable

levels of pesticides and herbicides are strict; testing
procedures to detect microbiological contamination,
especially from pesticide residues, are becoming more
severe. The absence of salmonella is critical: evidence
of salmonella infection in a shipment would lead to all
the merchandise being condemned by the public health
authorities. Phytosanitary regulations tend to be stricter
for ground spices and herbs. This is one reason why EU
importers hesitate to buy ground products because,
if there is contamination, they are more difficult and
more costly to clean than whole spices and herbs.

Two systems to demonstrate reliability of your quality

control system are ISO 9000 and HACCP.
HACCP
The need for good quality management takes on
increasing importance. The HACCP (Hazard Analysis
and Critical Control Points) procedure typically applies
to the food-processing industry. The EU Directive on
Hygiene for Foodstuffs (93/43/EC) which became
effective in January 1996, stipulates that: foodstuff
companies shall identify each aspect of their activities
which has a bearing on the safety of foodstuffs and
ensure that suitable safety procedures are established,
applied, maintained and revised on the basis of the
HACCP system. All food processors in the EU
member countries are legally bound to have an HACCP
system or they must be working on implementing the
system. The HACCP system is applicable to companies
which process, treat, pack, transport, distribute or trade
foodstuffs. These companies are forced to understand
(and act against) the possible hazards associated with
food production at all stages, from growth, processing,
manufacture and distribution, until the point of
consumption. This includes macro-biological (vermin),
microbiological (viruses, bacteria, yeast and moulds),
toxicological (chemical contamination by pesticides
or environmental contaminants like heavy metals or
dioxin), or physical (wood, metal, glass, plastic or
fabric) risk.

As of April 5, 2002, EU-wide maximum levels apply

for aflatoxin in the following spices: pepper (both
Capsicum spp and Piper spp), nutmeg, ginger and
turmeric. The maximum levels for aflatoxin are listed
in Commission Regulation 472 (16 March 2002).
The harmonised sampling plan for aflatoxins is
published in Commission Directive 98/53/EC.
Sampling methods for aflatoxin in spices, to be applied
from February 28, 2003 onwards, were added in
Commission Directive 2002/27/EC.
Aflatoxins, in particular aflatoxin B1, are genotoxic
carcinogenic substances. For substances of this type,
there is no threshold below which no harmful
effect is observed and therefore no admissible daily
intake can be set. Current scientific and technical
knowledge and improvements in production and storage
techniques do not prevent the development of these
moulds and consequently do not enable the presence of
the aflatoxins in spices to be eliminated entirely.
The EU, therefore, sets limits, which are as low,
as reasonably achievable.
The EU-wide maximum levels set are 5 mg/kg for
aflatoxin B1 and 10 mg/kg for total aflatoxins.
The European Commission will review the maximum
limits for aflatoxins by the end of 2003 and,
if appropriate, reduce them to take account of the
progress of scientific and technological knowledge.

Useful Internet-site:
http://www.tradewatch.com/acumen/haccp.html

Although exporters to the EU are not obliged to have an

HACCP system and their system will not be subject to
control by the food inspection service in the importing
country, actually having an approved HACCP system,
or working following a similar principle of quality
control, will be a very positive argument in export
business. Importers sometimes even require that
exporters work with HACCP.

Please note that the European Commission will review

the maximum limits for ochratoxin A by the end of
2003 with a view to including a maximum limit for
ochratoxin A in spices.

The HACCP regulation is of importance to exporters in

developing countries, because responsibility is passed
all along the production chain. Importers of food
products in the EU will be held legally responsible for
those products and, as a consequence, require the
necessary guarantee from exporters.

Quality is the sum of all aspects of your product

indicating that it is fit for use , complying with all
legal and consumer requirements: product safety, taste,
colour, structure, etc. The quality of your product has
to be warranted by means of a quality control system:

ISO 9000
The ISO 9000 standards provide a framework for
standardising procedures and working methods,
not only with regard to quality control but to the entire
organisation: from purchasing to processing, quality
control, sales and administration. This means that
quality, health, safety and environmental management
programmes become strongly interwoven with the
overall ISO management plan. ISO 9000 requires that
you exactly describe your processes, and then follow
these procedures exactly. It does not essentially address
product safety and quality, but it is a guarantee that you
always do things the same way. Your ISO 9000 system
has to be certified and regularly audited by an authorised
certifying body (like Lloyds, Veritas, SGS; present in
many countries). Also, one has to bear in mind that
being certified is not a one-time exercise. A certificate is
only valid for three years. In order to maintain the
certificate, regular audits, both internal (1-2 per year)
and external (2 times per year), are needed.

Product regulations
There are many regulations on food products.
However, the regulations differ per product group
and per country. For detailed information, contact:
Your embassy in the EU member country.
The embassy of the EU member country in your
country.
Organic food
The EU market for organic food products grew rapidly
in the 1990s. The main principles for organic production
at farm level and the rules that must be followed for the
processing, sale and import of organic products were
established by the passing of Council Regulation EEC
2092/91 and its supplement EC 1804/99.
This regulation is very complicated and difficult,
which makes it necessary for an exporter to the EU to
consult experts on this matter. Use of the term organic
is now limited in the European Union to products
derived according to the principles of production and
the rules of processing defined in the regulation.
Under EU Community rules, organic farming can be
defined as: a system of managing agricultural holdings
that uses a variety of more environmentally friendly
crop farming practices and involves major restrictions
on the use of fertilisers and pesticides.
IFOAM (International Federation of Organic Agriculture
Movements) was a major contributor to the organic
standards of the EU adopted in Regulation 2092/91.
It is important, however, for exporters to be aware that
agricultural units, the processors as well as their
products, must be certified by EU recognised control
bodies to confirm that they meet the required EU or
specific national standards, before their products
can be offered for sale in EU markets.
However, a manufacturer should realise that certification
is a costly matter and that he or she will have to make
considerable financial sacrifices when deciding to obtain
certification. Nevertheless, the competitive benefits can
be considerable. For more information on certification,
please contact SKAL, Ecocert, Soil Association or other
EU inspection organisations.
It should be noted that a number of these organisations
has their own inspectors in some developing countries.
Please refer to Appendix 9 of the EU Market Survey
Spices and Herbs for contact details of these
organisations. For more information on organic products,
please refer to CBIs EU Market Survey and Marketing
Guide Organic Products.

Consequently, the company should have a quality

manager in-house who is responsible for the quality
management policy, procedures, implementation,
monitoring and documentation thereof, and for the
hiring of quality management consultants needed to
carry out external audits. Therefore, a decision to
become ISO 9000 certified means a firm commitment,
which will draw on the companys human and financial
resources and which unavoidably will continuously add
procedures and paper work. Nevertheless,
manufacturers, which have obtained an ISO 9000 series
certificate, possess an important asset. The certification
may be a vital factor in the selection process applied by
trade partners in Europe.

Useful Internet-site:
http://www.iso.ch

Benefits of ISO 9000 certification

o Improves image
o Inspires confidence
o Increases credibility
o Generates recognition
o Enhances acceptability
o Reduces liability disputes
o Creates transparency and awareness
o Enables identification of weaknesses and their
correction
o Systematises efforts to increase quality
o Enables identification of possibilities to increase
efficiency
o Provides an important source for reference and
monitoring
o Enables identification of possibilities to increase
customer satisfaction

Novel food
Regulation (EC) 258/97 on Novel Foods and Novel
Food Ingredients sets out rules for authorisation and
labelling of genetically modified food products and
other categories of novel foods.
The market for novel food products, in particular that
of food products which are made with or are made of
genetically modified organisms (GMO), is growing in

10

the EU, mainly as a result of the production of a few

multinational companies. The most important products
in this category are soya and maize. In fact, the market
for soya consists almost fully of soya that is not GMOfree, with the exception of certified organic products.
GMO-free food products are products that are produced
without genetic engineering. Production using GMO in
Europe is still limited to only a few products. The EU
has issued Recommendation 97/618/EC and Directive
(EC) 258/97 concerning novel foods and novel food
ingredients. The Directive (EC) 258/97 indicates that
food products are not allowed to be introduced in the
market before going through an (expensive) procedure,
in which should be shown that they are safe.
This applies not only to GM food products, but also to
all foodstuffs, which have recently been introduced on
the EU market. Furthermore, the EU has issued a
separate labelling regulation for genetically modified
foodstuffs, Regulation (EC) 1139/98. A growing share
of food producers demands GMO-free raw materials,
since an increasing number of consumers and chain
stores choose not to purchase food products that are
genetically modified. The control of GMO-free product
claims is expected to become stricter within the EU.

It is the objective of this section to briefly highlight

several aspects that currently play a major role in the
EU. Exporters of spices and herbs must be aware of the
health and environmental considerations of European
customers and try to satisfy these customer needs by
offering products, which comply with both legislative and
market requirements.

Financial instruments in the EU

Besides legislation, one of the instruments of the EU to
promote environmentally sound products is the
awarding of (tariff) preferences or the levying of
so-called environmental taxes on products.
An example of preferential systems is the General
System of Preferences (GSP) encouragement regime.
Under the GSP, developing countries are exempted
from the main WTO principles of reciprocity and
non-discrimination (see Section 1.2.1).
Since May 1998, the current GSP includes an
encouragement regime to stimulate developing
countries to establish and implement trade-related
social and environmental policies (Regulation EC
1154/98). Import tariffs for countries, producing in
an environmentally friendly and humane way, may be
reduced by 15-35 percent for a selection of products.
For countries that already receive maximum preference,
the encouragement regime may not prove to be a
direct incentive. More details on GSP, can be found
in CBIs Guide Exporting to the European Union.

1.1.2 Trade-related environmental measures

Growing awareness of environmental pollution and
hazardous ingredients, particularly in the agribusiness,
and more criticism by consumers, has led to a reduction
in the use of chemicals in foods that are dangerous to
human health. Consumers are showing a growing
willingness to pay premium prices for higher quality
products in terms of flavour, food safety and
environmental aspects.

It is clear that the EU is trying to promote cleaner

production through the awarding of financial incentives.
On the other hand, in the EU, and in some member states
in particular, various financial instruments are being used
to discourage all kinds of environmental pollution.
This takes place through the establishment of specific
taxes. A very specific tax is the so-called ecotax,
which is placed on energy consumption. These taxes can
apply to both private households and to companies.
A complete list of environmental taxes in the European
Union Member States, plus Norway and Switzerland
can be found at europe.eu.int/comm/environment

There are strong environmental concerns in Germany,

Scandinavia, The Netherlands, the United Kingdom and
increasingly in other EU countries. Environmental
issues mainly concern GMP (Good Manufacturing
Practices), phytosanitary measures and reduction of the
use of pesticides.

Environmental aspects of products have become a major

issue in Europe in recent periods. Depending on the
product in question, environmental aspects may play a
vital role in preparing to export to the European market.
Besides governmental actions (legislation and
regulation), a strong consumer movement is noticeable
especially in the northern parts of the EU (Scandinavia,
Germany, The Netherlands and the United Kingdom).
The environment is more than a trend. It is a lasting
issue seen for all products and nowadays even services.
Therefore, manufacturers have to view their products and
production processes not just by looking at traditional
aspects like price, quality, customer demands and
standards, but also at the environmental aspects.

Sustainable development for businesses

The concept of sustainable development, adopted by
nearly all the countries in the world which participated
in the 1992 Rio de Janeiro Conference, represents the
philosophy that economic development should
automatically take into account the issue of the
environment, recognising the fact that polluting
activities now will have great (negative) impacts on
the way future generations can live. In this respect
all parties, including the general public but also
manufacturers, are asked to accept their social
responsibility and minimise the environmental impact
of their activities. In recent years, issues such as
(environmental) Life Cycle Assessment LCA) of

11

products, Cleaner Production (CP) and Ecodesign have

all become important tools for companies to improve on
the environmental performance of their products and
production processes. These tools enable companies to
analyse where the environmental impacts are the largest
and how they could improve on these points. This can
lead to both internal (improved efficiency) and external
(perceived image) advantages.

relevant for manufacturers in developing countries.

The EMAS scheme has regularly been criticised as being
too difficult, bureaucratic and expensive and it is
therefore expected that also in Europe companies
will favour ISO 14001 for which, on a global scale, there
are more than 8,000 companies certified. In comparison,
some 2,000 companies are EMAS certified.
Biotechnology
Presently, there is a lot of opposition in Europe to
genetically manipulated foodstuffs; maize and soya are
two of the most prominent examples of these so-called
novel foods. Although increasingly practised,
biotechnology can bring risks to the environment.
Another objection is that it can lead to monopolisation
of certain crops by multinational industries.
Cloned varieties could diminish the genetic diversity.
Genes originating from transgene crops could transfer
to wild family members. In 1997, the EU issued
Directive 97/618/EC and Directive 258/97/EC
concerning novel foods and novel food ingredients.
Until now, there are no satisfactory international
standards for biological safety or for the patenting of
living organisms and genetic material.
However, there are plans to add a biotechnological
protocol to the United Nations Agreement on
Biological Diversity, which was concluded after the
Earth Summit in 1992 in Rio de Janeiro. Public opinion
will be vital in determining market opportunities for
genetically modified food products.

The results of applying the above tools can be

company-internal improvements in environmental
performance. However, in order to be able to use the
environmentally sound approach of a company towards
its products and production processes, green
marketing tools such as Ecolabels (for products) and
environmental management standards (for the whole
organisation) have been created both by governments
and private parties.
Environmental standards
The Ecolabelling procedures are purely aimed at the
products and indicate that the product with a label has a
reduced impact on the environment. If a manufacturer
wants to indicate to external parties that he is
manufacturing in an environmentally sound way, then
he can comply voluntarily with the following standards:
ISO 14001
EMAS.
Both standards are based on the ISO 9000 series of
standards for quality management. The relevance of the
ISO 14001 standard for the future can be clearly seen by
following the development and adoption of the ISO 9001
and ISO 9002 quality standard. Although voluntary,
customer pressure is resulting in the ISO 9001 and IS0
9002 quality standard becoming more important for
doing business around the world. Similarly, the ISO
14001 environmental management standard may become
a de facto requirement for being able to compete in many
regions of the global marketplace.

Issues related to spices and herbs

Spices and herbs are products from the wide category
agriculture, which carries the strictest compulsory
standards, with organic agriculture being the most
tightly regulated environmentally sound agricultural
practice. Its main focus is on minimising environmental
damage and on sustaining or building soil fertility.
Information
For detailed information about environmental aspects
relevant to trade, please refer to the Environmental
Quick Scan Selected Food Products including Food
Ingredients, which can be obtained from CBI.
Information can also be obtained through AccessGuide,
CBIs on-line database for Environment, Trade and
Technology.

Another environmental management standard, which is

also operational in the EU, is the Environmental
Management and Audit Scheme (EMAS). This scheme
was set up by the Comit Europen de Normalisation
(CEN) in 1993. As it only applies to companies with
production facilities within the EU, it is usually not

Useful Internet sites:

EUR-LEX (official documents and legislation)
Environment Directorate General
SKAL
Max Havelaar Foundation
TransFair International
CBI
AccessGuide

www.europa.int/eur-lex
www.europe.eu.int/comm/environment
www.skal.com
www.maxhavelaar.nl
www.transfair.org
www.cbi.nl
www.cbi.nl/accessguide

12

1.1.3 Packaging and labelling

plastic screw cap because they keep moisture and

odours out, open and reclose easily and prevent volatile
components from deteriorating.

Packaging
ISO standards were established in 1998 for the
packaging of almost all spices and herbs. Spices are
required to be packed in clean, hygienic materials,
which do not interact with the product itself and which
protect them from moisture or loss of essential oils.
The required packaging and labelling will always be
specified in the contract between the exporter and the
importer. Conventional packaging for most of the
important spices and herbs is jute or sisal sacks of
variable size (+/- 25-60 kg), preferably lined with
appropriate plastic to make them waterproof, to protect
them from contamination from outside and unwanted
odours, and to prevent loss of volatile oils. Bags must
be cleaned and disinfected before being re-used, but it
should be noted that the European Spice Association
(ESA) made a packaging specification stating that jute
or sisal should conform to the CAOBISCO standard
reference C502-51-sj. This standard refers to the nature
and quantity of batching oil residues in the packaging
material. The ESA considers jute or sisal as a source of
contamination, which may occur in the form of loose
particles from the bags entering the spices.

Plastic, aluminium and high density polyethylene

containers are used to some extent but are not
widespread.
The two areas of most importance are the label and the
cap. Both are usually colour coded, so that the required
spice is easily identifiable. The label, which could be
the key to selling the product, is very often neglected,
especially in developing countries. The paper used
should be of high quality and the label should be
attractively designed, preferably by a graphic designer.
Glass jars are usually of the same size and are typically
filled completely despite the different resulting weights,
which can vary from 10 to 60 grams.
Most packaging and labelling requirements are drawn
up to meet food safety and environmental protection
standards. Some spices have special packaging needs.
For example, pepper is hygroscopic in nature and
therefore requires packaging material, which allows it
to breathe. Turmeric powder also requires special
packaging material. Insistence on standard
biodegradable packaging material may spoil the
character of the spice itself. Spices, by definition, have
high volatile oil levels and it is important that their
packaging is able to preserve these oils.

Regarding national packaging standards, French

standards give a representative example for other EU
countries. They state that some spices (pepper,
cinnamon, cumin, cardamom, cloves and vanilla), in the
whole or powder form, should be packed in clean,
sanitary containers, made from materials which do not
react with the product and which prevent increase in
humidity and loss of essential oils. French standards for
most spices are similar to those of the ISO, however
sometimes there are large differences, as in the case of
ground cloves (ISO 2254) or cinnamon (ISO 6539).
The International Standards Organisation (ISO) or the
International Trade Centre (ITC) can be contacted for
further information; addresses are given in Appendix 3.

Labelling
The following information has to be clearly included in
the label on the packaging (in the language of the
importing country):
Labelling for consumer packaging:
Product name
Shelf life
Net weight
Name and address of the seller in the country
of destination
Batch code

Cinnamon bark is normally packed in bales, while for

other spices steel drums or wooden cases are used.
Saffron and vanilla are usually packed in metal boxes
inside wooden crates or cardboard cartons. Before
shipment, spices and herbs must be thoroughly dried to
avoid the growth of mould. Care should be taken to
prevent loss of flavour and colour while drying.

Labelling for bulk packaging:

Product name
Address of the seller in the country of destination
Batch
Name and address of the producer or exporter
Net weight
Required storage conditions
Any other information requested by the purchaser

Packaging requirements in the retail sector

The packaging of spices for the retail sector must
ensure a long after-sale shelf life. Spices are used only
in small quantities and infrequently, so containers
(plastic or glass jar or tin) must re-close securely and
keep the spice or herb in good condition for periods of
a year or more. They are usually kept in the kitchen,
often in the hottest, dampest area. In most EU countries
the most common containers are glass jars with a

Irradiated spices must be marked spices treated by

ionisation or spices treated by ionising radiation.
Additional labelling requirements are generally
specified in the contract by the importer.

13

Bar coding may be an obstacle for spice producing

countries, because of inadequate facilities to apply these
to labels and since it is the buyer who decides upon the
required bar codes.

It provides services in the field of inspection and

certification, both nationally and internationally, acting
as an independent third party. Other important EU
inspection organisations operating internationally
include BCS and Naturland (Germany), Ecocert
(Germany, France, Belgium, and Italy) the Soil
Association (United Kingdom) and KRAV (Sweden).
For more information please refer to CBIs Market
Survey Organic Food Products and to these
organisations. Contact details of these organisations
can be found in Appendix 9 of CBIs EU Market
Survey Spices and Herbs.

Environmental and fair trade labels

Organic production and labelling
Organic agriculture is the strictest of the environmentally
sound agricultural practices. Its main focus is on
minimising environmental damage and on sustaining or
building-up soil fertility. Organic agriculture is
commonly perceived as refraining from the use of
chemical inputs, such as synthetic fertilisers, pesticides
and herbicides or defoliants. More environmentally
sound alternatives are suggested to replace chemicals,
such as crop rotation, particularly incorporating
legumes, the careful management and use of manure
and crops wastes, the use of appropriate cultivation
techniques, natural and biological pest and disease
control measures and mechanical and other nonchemical weed control techniques. In many regions of
the world, agricultural systems equivalent to what is
now defined as organic farming have existed for
centuries, especially in third world countries, where
agriculture is often organic by default as no money
was available to buy chemical fertilisers and pesticides.

Concerning the social aspects, care should be taken to

provide at least the minimum requirements for
labourers in (a number of) food industries in order to
satisfy organic standards, as set out in the IFOAM
Basic Standards. For more information, please refer to
CBIs Exporting to the European Union: challenges
demand a strategic approach or Quick Scan on
Environmental Social and Health Issues: Selected Food
Products, Including Food Ingredients.
Fair trade labels
Fair trade organisations are trading organisations,
which promote the development of self-reliance and
empowerment, through establishing fair trade relations.
Examples of fair trade organisations are Max Havelaar
Foundation and TransFair International.
The objective of The Netherlands Stichting Max Havelaar
(Max Havelaar Foundation) is to guard the interests of
small farmers in developing countries by promoting
the sale of their (agricultural) products. In order to
guarantee that the product the consumer buys is grown
under fair conditions, a label can be awarded which
indicates that the grower has received a fair wage.
Although this label is mostly intended to promote fair
trade, there is a (small) environmental aspect in it, to
the extent that farmers are stimulated to apply organic
agriculture (i.e. no use of pesticides).
For more information, interested parties can contact the
Stichting Max Havelaar (see Appendix 9 of CBIs EU
Market Survey Spices and Herbs).

There is growing demand for organic spices and herbs

in Europe. In order to make agricultural products from
organic sources easily recognisable to consumers,
EU organic labels have been introduced. Organic
production and labelling is covered by Council
Regulation (EEC) No 2092/91 as a means of providing
consumers with a guarantee of origin, preparation,
processing, and packaging of products.
Under the EU regulation, the marketing of organic
produce from third countries is only permitted where
the Commission is satisfied that the imported goods
have been produced according to rules equivalent to
those of the European Union and where the producer
has obtained a certificate of inspection from a
competent EU recognised authority. Exporters from
non-EU member states can indicate their interest in
obtaining certification for organic production by
contacting either an international inspection
organisation, or a national organisation from an EU
member state, designated as a competent authority
under Regulation No 2092/91.

The objectives of the TransFair International

organisation are identical to those of The Netherlands
Stichting Max Havelaar. Germany, Austria, Luxembourg
and Italy now recognise the label, while Canada
and the United States of America are considering the
opportunities for this label on their national market.
For more information, interested parties can contact
TransFair International (see Appendix 9 of CBIs EU
Market Survey Spices and Herbs).

The EKO quality label is the label in The Netherlands

that guarantees the organic origin and quality of
agricultural products and food products.
The organisation SKAL is the holder of the officially
registered EKO quality symbol. Internationally, SKAL
is a member of IFOAM (International Federation of
Organic Agriculture Movements).

14

1.2 Tariffs and quota

In general, all goods, including spices and herbs, entering
the EU are subject to import duties. External trade
conditions in the European Union are mostly determined
by EU regulations. The level of tariffs depends on:
the country of origin; and
the product.

promote core labour and environmental standards.

The new Regulation complements and fully
incorporates the recent Everything But Arms (EBA)
initiative in favour of Least Developed Countries.
In order to benefit from GSP treatment, exporters have
to provide a Form A certificate or EUR 1 certificate
(ACP countries), which is issued by the appropriate
authorities in the respective country.

The GSP grants developing countries tariff preferences.

In June 2001, the European Commission adopted a
proposal for revision to the Generalised Scheme of
Tariff Preferences (GSP) for the years 2002 to 2004.
The regulation is designed to simplify the GSP regime
and target the benefits more effectively. It also intends
to improve the effectiveness of special incentives to

Table 1.1

The proposed GSP can be downloaded from:

http://europa.eu.int/comm/trade/miti/devel/ngsp_reg.htm
Information on the current applicable tariffs for
products from your country can be found at:
http://europa.eu.int/comm/taxation_customs/customs/
information_notes/tariff/taric_en.htm

Import tariffs for spices and herbs, November 2002

Tariff as a percentage of CIF value, excluding duties and VAT

Product

HS code

Pepper
Pepper, ground
Sweet peppers
Dried capsicum
Paprika powder
Vanilla
Cinnamon
Cloves
Nutmeg
Mace
Cardamom
Anise/badian seeds
Coriander seeds
Cumin seeds
Caraway seeds
Fennel seeds, juniper
Ginger
Saffron, whole
Saffron, ground
Turmeric
Wild thyme
Other thyme
Thyme, ground
Bay leaves
Curry
Mixtures, whole
Mixtures, ground
Other spices, fenugreek
Other spices, whole
Other spices, ground

0904 11
0904 12
0904 20 10
0904 20 30
0904 20 90
0905
0906
0907
0908 10 10
0908 20 10
0908 30 00
0909 10 10
0909 20 00
0909 30
0909 40
0909 50
0910 10
0910 20 10
0910 20 90
0910 30 00
0910 40 11
0910 40 13
0910 40 19
0910 40 90
0910 50 00
0910 91 10
0910 91 90
0910 99 10
0910 99 91
0910 99 99

Rate of duty
Conventional

Rate of duty
GSP

0
4.0
9.6
0
5.0
6.0
0
8.0
0
0
0
0
0
0
0
0
0
0
8.5
0
0
7.0
8.5
7.0
0
0
12.5
0
0
12.5

0
6.1*

0
2.1*

2.8*

2.4*
2.9*
2.4*

4.3*

4.3*

* Imports from countries which are considered as least developed countries can enter the EU at a zero tariff rate
Note: the conventional duties mentioned vary in the different periods of import during the year.
Source: Taric Database, Netherlands Customs (2002)

15

Useful Internet Sites:

Netherlands Custom Services
TARIC Database

www.douane.nl/taric-nl
http://europa.eu.int/comm/taxation_customs/customs/information_notes/tariff/taric_en.htm

Although fiscal borders between EU countries were, in

theory, lifted from 1 January 1993 onwards, in practice,
harmonisation of VAT (tax levied at consumer sales
level) rates has not yet been achieved. Table 1.2
summarises the VAT rates applied in the different EU
member states for goods in general. Please refer to the
Ministry of Finance of the respective country for
specific information on the relevant rate applied to
spices and herbs.

Table 1.2

VAT rates (in %) in the EU, June 2002

Austria
Belgium
Denmark
Finland
France
Germany
Greece
Ireland
Italy
Luxembourg
Portugal
Spain
Sweden
The Netherlands
United Kingdom

Standard Rate

Reduced Rate

20
21
25
22
19.6
16
18
21
20
15
17
16
25
19
17.5

10
12

17
5.5
7
8
10
9
6
4-5
7
12
6
0-5

Source: DGXXI, European Commission (2002)

16

TERMS OF THE TRADE AND TRADE PROMOTION

2.1 Terms of the trade

It is important to realise that differing customs, habits
and traditions can cause problems in business
relationships, even after both partners have carried out
sound preliminary investigations. A contract is not
necessarily a document. If two parties agree on
something verbally, this verbal agreement is a contract
according to most European laws. However, since in the
case of a verbal contract it is very difficult to prove that
something in particular has been agreed upon, the
agreement should be confirmed in writing.

agreed verbally. Trading relations between exporter

and importer are based on trust and can only be built
up by meeting the high expectations of the importer.
If an importer finds that the product does not meet his
expectations, this will immediately backfire on the
business relationship with the exporter.
2.1.2 Payment methods and delivery terms
The determination of payment conditions for a regular
export transaction is part of the package of negotiations
between seller and buyer, who actually have more or
less opposing interests. The seller wants to have the
largest possible guarantee of financial coverage for the
goods he has to supply according to his sales contracts.
The buyer wants to be sure about availability, quantity
and quality of the goods he buys, before he pays the
agreed price.

2.1.1 The contract

Details, which must be mentioned in a contract, are:
1. The contract parties: The seller, the buyer, the broker
and/or buying/selling agent. Of course all names and
addresses must be correctly spelled.
2. The product, price and quality of the product must be
sufficiently specified, so that no misunderstandings
can arise.
3. The quantities must of course be mentioned. If the
buyer and the seller agree to more or less than the
agreed quantity, this has to be specifically mentioned.
4. The delivery terms must be mentioned according to
the description specified in the Incoterms 2000
(please refer to
www.iccwbo.org/index_incoterms.asp).
5. The payment terms must be spelled out in detail.
6. The delivery time is a vital piece of information on
which the seller and the buyer will have to agree.
7. Packaging details, including measurements and
weights must be specified
8. If one of the parties has negotiated special conditions,
this has to be mentioned in the contract.
9. What will be done if the two parties disagree with
each other? To which arbitration court / district will
they turn?

In the spice and herb trade, a Letter of Credit (LC)

and Cash Against Documents (CAD) are the most
frequently used methods of payment. However,
methods of payment vary from company to company.
Once trading relationships are established, clean
payments are often used.

General methods and terms of payment

Clean payment
The process is fast and reliable, depending on the credit
worthiness of the importer. The bank carries out the
transactions through swift electronic data system and the
transfer costs are not very high.
Documents against payment (D/P)
Also known as cash against documents (CAD).
The buyer takes possession of the goods only after
payment. Although this method is not very popular, it is
very safe and the costs amount to one pro mille. One can
also make use of a documents against acceptance of a
bill of exchange. However, the bill of exchange is not
commonly used in the European Union and it does not
guarantee that the bill will be paid; it is less secure than
the D/P.

Contracts are taken extremely seriously in the EU,

as well as in the USA and Japan. A contract is of vital
importance if there is disagreement. A dispute may
arise for example because:
the buyer is of the opinion that goods/equipment are
delivered late;
the agreed quality level has not been met;
the seller is of the opinion that the buyer does not
live up to his financial commitments.

Letter of Credit (LC)

The irrevocable LC is very often used in the beginning of
a business relationship when the importer and exporter
do not know each other very well yet. The LC is
irrevocable and will always be paid. The costs are higher
when compared to the D/P method, namely five pro mil.
This method is widely used in the European Union when
dealing with exporters from outside Europe.

Written contracts are common in the spices and herbs

trade, but may vary according to the nature of the
agreement. In some cases, sales take place by
gentlemens agreement, when buyer and seller
undertake to honour the conditions on which they have

17

on the production capacity, processing and quality/

safety control facilities. It is not advisable to exaggerate
the potential capacity of the company. Most importers
visit producers and exporters before placing orders,
so that they can get to know the business partner and
see for themselves the production and/or processing
facilities and conditions.

Bank guarantee
The buyers bank will present a bank guarantee for the
amount of the invoice.
Cheques
Bank guaranteed cheques are generally not a problem
though cashing may take some time, up to six weeks.
Not all personal cheques are accepted.

The market for spices and herbs is highly competitive

and is dominated by the large grinders/processors.
However, retailers have become stronger and more
often decide for themselves what and when they will
buy from grinders. There are opportunities for exporters
in developing countries to enter the EU market,
considering the changing eating habits, smaller family
sizes, and interest in more exotic products. However,
a barrier to entering the European market is sometimes
related to product quality. In Europe, the use of the
HACCP procedure (see Section 1.1.1) is an important
tool for managing good product quality. Moreover,
importers and food manufacturers increasingly ask for a
whole package of goods and services which includes
not only the food ingredients, but also information on
quality assurance, product specifications, suggestions
for application, general service, etc.

Payment on consignment basis

Payment on consignment basis is mostly used in the trade
of perishable products, for example fresh fruit and
vegetables. The products are sold at a predetermined
price after a mutually appointed arbitrary person
(General Super Intendance Company (GSC)) has
controlled the quantity, quality and other aspects of
the products at the moment of acceptance/sale.
If the products do not meet the conditions as described in
the contract, the contract is not valid and, depending on
the conditions of the contract, prices are generally
adjusted. An open account is used to make the payment
after 14 days as from acceptance/sale.

It is recommended that quotations to European

customers should be made on a CIF basis. However,
supplier and importer are free to negotiate and agree
whether quotations and subsequent trade are based on
CIF or FOB prices.

The European market is far from homogeneous: eating

habits vary from country to country, even from region
to region within countries. Consequently, having
importers or agents in Europe eases the penetration of
the European market. These importers or agents can
open up the path of specialised niches.

Most common delivery terms:

Alternatively, direct sales of private (producer) labelled

spice mixtures to retail multiples may possibly give
entry to a market, provided they are of a consistent
quality level and can be delivered on a regular, reliable
basis. Importers complain that new products are often
offered by exporters who have no idea about their
market potential for his business. It is, therefore,
worthwhile for exporters to investigate the market
thoroughly to collect enough information about
importers and their industrial sector, consumers or
consuming retail organisations, before contacting them.

FOB (Free On Board): The buyer arranges for

transportation and insurance. FOB must specify the port
of departure.
CFR (Cost & Freight): The exporter pays the freight,
the buyer arranges for the insurance.
CIF (Cost, Insurance & Freight): The exporter pays the
freight and the insurance.

2.1.3 Business practice

Assuming that the exporter has done his homework by
studying the market possibilities, the next step is to
select potential trade partners in EU countries.
In Appendix 11 of the EU Market Survey Spices and
Herb, contact details of relevant importers can be
found. When the exporter has pre-selected a number of
potential trade partners, the next step is to communicate
by mail, e-mail, fax or telephone with potential partners.

If there is a promising response from the (potential)

European trade partner, a business trip to the EU can be
the next step. This allows potential suppliers to
establish direct and personal contact with their potential
business partners. The exporter can also bring with
him/her product samples, which can be shown to the
trade partner. the At the same time, samples of
competitive products available on the EU market can be
obtained so that comparisons can be made on price,
quality, brands, design, packaging and labelling.
This is very important, since, in most cases, new
products will need to be adapted before they can be
successfully launched in the EU market.

When corresponding by mail, exporters should send

documentation both on their company and its product
and, if available, information on quality certificates.
These documents should be as detailed as possible and
should be written in English, highlighting the quality
and capability of the company, and giving information

18

Customs, habits and tradition are often problems, which

arise in business contacts, even after both partners have
carried out sound preliminary investigations.
European importers are careful in their selection of a
supplier. Furthermore, they are characterised by a
no-nonsense approach. In some cases this may lead to
a culture shock for exporters from developing countries.
The following list is a summary of points, which can be
the key to success when dealing with firms in the EU:

inadequate packaging
o research packaging problems (mutually) to reduce
transportation costs and improve product quality and
appearance;
violating exclusive rights clause in contract
o never try to breach your contract by selling to other
trade partners. You will find that you may lose both
partners, since the market is highly organised.

correspondence is important, since it is the

presentation of your company and should be as
correct, accurate and neat as possible;
business comes first;
consistency, punctuality, reliability and honesty are
very important. Be honest and direct about delivery
times, quality and production capacity. If necessary,
the EU partner can offer assistance in order to
improve your shortcomings either directly or through
the assistance of a third party. It will increase your
credibility and possibly allow for long-term export
agreements;
appointments are always made prior to any visit.
Once an appointment is made it is final (in case of
delay, inform the company as soon as possible).

2.2 Promotion
Promotional activity in the EU market for spices and
herbs is mainly carried out by the grinder/processor/
packers who know the market well and promote their
brands. They are in a position to organise the necessary
distribution through their own service merchandisers
when a special promotion campaign in a particular
(test) region or city is being organised. In the case of
direct supply to retail organisations, a good knowledge
of account management is necessary.
In order to make the introduction of a private brand a
success, a promotion plan is made by the packer or by
the retailer. Most often retailers expect packers to
organise in-store product demonstrations, displays,
product samplings, make recipe leaflets or place
advertisements or advertorial in the form of recipes in
their in-store magazines. Recipes or suggestions in
trying the spice in a different dish are given on the
package of most spices and herbs.

Exporters dealing with EU importers should be willing

to adapt to importers requirements.
A survey run among importers revealed the following
list of problems frequently encountered when doing
business with exporters from developing countries;
appropriate solutions are also suggested.

Consumers tend to have a high brand loyalty in

deciding which spices or herbs to buy and often
purchase refill bags. There is still little known about
which individual spices or herbs should be used in
which dish, so packers consider that giving customers
suggestions for their use is a very important sales aid.
Fresh herbs are now more often bought impulsively
and can be found near vegetable displays which are
visited by a much larger group of consumers.
Most supermarkets stock dried spices and herbs with
block displays of jars and refill bags together, arranged
by brand. Colour-coded lids have more impact when
the blocks are displayed and a few supermarkets now
have spices or herbs arranged in alphabetical order.

poor communication with the supplier

o telephone, fax e-mail and Internet are indispensable.
delayed replies
o answer any question as soon as possible, if not
straight away, at least let the importer know you are
working on the answer to his question;
late delivery
o make sure you can deliver on time, never exaggerate
your capacity. In case of delay, inform promptly and
state the reason;

The use of promotional hot spots and recipe

leaflets/booklets generally provide consumers with
reasons to try new products. Promotional hot spots of
a range of six spices, brought together by a common
theme, have been introduced, often in combination
with recipe leaflets, to maintain consumer interest and
stimulate impulsive purchasing.

product quality not meeting specification

o investigate product improvement possibilities if
necessary, but never ship poorer quality goods than
those demanded and agreed upon;
high exporters margins
o adopt a positive attitude towards long-term relations
instead of incidental exports, even if it leads to
smaller margins. Quote realistic prices;

19

2.2.1 Trade fairs

Generally, grinders, processors, packers and retailers
keep themselves informed as to the latest developments
by visits to trade fairs all over the world. Here they can
get an impression of new products and the latest trends
and varieties in convenience foods.
The key international trade fair is the Food Ingredients
Europe in Paris (France). The largest EU food
exhibitions are the Anuga in Cologne (Germany) and
Sial in Paris (France). The leading European trade fairs
are listed in table 2.1. Please refer to Appendix 6 of
the EU Market Survey Spices and Herbs for contact
details of the trade fair organisers.

Table 2.1

The most important objectives for the participating

companies from developing countries are:
establishing personal contacts with buyers;
promotion of spices and herbs;
European market orientation.
2.2.2 Trade press
The following are the main (inter)national trade
magazines which are of relevance to exporters of spices
and herbs. The contact details of the publishers can be
found in Appendix 7 of the EU Market Survey Spices
and Herbs. Information on the worldwide trade of
spices and herbs as well as of ingredients can be found
on several Internet sites, where the latest information on
prices and some general market trends can be found.

International trade fairs for spices and herbs

Trade fairs

Where?

When?

What?

Alimentaria

Barcelona, Spain

8-12 March 2004

International food and beverages

exhibition

Anuga

Cologne, Germany

11-15 October 2003

Food and drink industry

Authentic Food Market

London, United Kingdom

23-26 March 2003

Ethnic food exhibition

BioFach

Frankfurt, Germany

13-16 February 2003

Organic and natural products and

relevant services

Food Ingredients Europe

Frankfurt, Germany

18-20 November 2003

Food products, product

development and quality control

Horecava

Amsterdam, The Netherlands

6-9 January 2003

Hotels, restaurants and institutions

IBA

Dsseldorf, Germany

3-9 October 2003

International bakers and

confectioners exhibition

Interherba

Poznan, Poland

21 March 2003

Herbs and herbal products

International Food Exhibition

London, United Kingdom

23-26 March 2003

International food and drink

exhibition

SIAL

Paris, France

17-21 October 2004

International food and drink

exhibition

20

2.2.3 Assistance with market entry

The stringent quality specifications and the standards
for safety and health for all food products, which are
designed to protect consumers, are the main barrier to
market entry for new exporters.
These exacting requirements are continually forcing
exporting countries to upgrade the quality of their
spices and herbs through the adoption of improved
cultivation techniques, reliable sourcing programmes,
better post-harvesting methods, adequate storage
facilities and improved packaging.

The services of Trade Promotion Organisations can

include:
information:
statistics and publications about the national
market
regular news bulletins
databases of importers
product market opportunities
individual assistance:
management training
product testing/exhibitions
product adaptation services
establishing contacts:
collective trade fair missions
selling missions.

Before approaching organisations abroad, an exporter

should first check with the local trade promotion
organisations, Chambers of Commerce and foreign
representatives in his/her country whether the
information required is readily available for the next
step. There is a great number of organisations in the EU
and in other European countries which are important in
the field of general representation, promotion and
public relations activities for exporters from developing
countries.

Branch organisations/trade organisations

In some European countries (or at EU level) producers
and wholesalers are organised in branch organisations.
These organisations can be of use to new exporters to
the EU, for the gathering of information about the
market and for identifying potential trade partners.
Contact details of Trade Promotion Organisations and
other organisations, which can be of assistance in
entering the European Union market, can be found in
Appendix 8 and Appendix 5 of CBIs EU Market
Survey Spices and Herbs.

Trade Promotion Organisations

In most EU countries, there are organisations, which
promote imports from developing countries through
specific export promotion programmes.

Magazine

Country

Language

Topics

Alimarket
Distributie Vandaag
Distrifood
Food Manufacture

Spain
Belgium
The Netherlands
United Kingdom

Spanish
Dutch/French
Dutch
English

Foodnews

United Kingdom English

Food Personality
Hot Spice Newsletter
International Food Ingredients

The Netherlands Dutch

Germany
English
United Kingdom English

Magazine covering the food sector in Spain

Magazine covering the food sector in Belgium
Covers the retail food sector in The Netherlands.
Magazine covering the British food processing
industry
Covers the world market for fruit juice concentrates,
canned and frozen foods, tomato products, food
ingredients, dried fruit and nuts, and dairy products.
Magazine covering the food sector in The Netherlands
Bulletin covering the spice trade in the world
Providing news, in-depth articles and reports on
different aspects of the ingredients and additives
market.
Bulletin covering the pepper trade in the world
Magazine covering the food sector in Germany
Magazine covering the food sector in France
The Market News Service of the International Trade
Centre UNCTAD/WTO (ITC) provides timely and
detailed price and market information on selected
primary and semi-processed products of particular
interest to developing countries and economies in
transition
Magazine covering the food sector in Italy
Magazine covering the food sector in the United
Kingdom

International Pepper News Bulletin

Lebensmittel Praxis
Germany
LSA
France
Market News Service
Switzerland

Nuova Distributzione
The Grocer

English
German
French
English

Italy
Italian
United Kingdom English

21

MARKETING GUIDELINES

This chapter offers a Business Guide or checklist for

exporters wishing to engage in exporting spices and
herbs to the European market. The Business Guide aims
to facilitate exporters in formulating their own market
and product strategy, through a methodology of analysis
and ready-to-fill-in frameworks.

3. A checklist for building up a trading link

Building up a trading link:

1.
2.
3.
4.
5.

This Business Guide consists of three parts:

1. Product profiles, in which a selection of products
will be highlighted.
2. A market opportunity analysis to determine the
suitable sales market(s) and the suitable sales
channel(s) for spices and herbs

Statistical market information on consumption,

production and trade, and information on trade structure
and prices and margins, which is required for the
ready-to-fill-in frameworks in the Business Guide,
can be found in the EU Market Survey Spices and
Herbs. The market survey also includes contact details
of importers, trade associations, and other relevant
organisations.

Market opportunity analysis:

1.
2.
3.
4.

3.1

Reviewing the products and the product range

Identifying a suitable trading partner
Drawing up an offer
Handling the contract
Sales promotion

Country evaluation
Sales channel assessment
Company assessment
Supply and demand comparison

Product profiles

PRODUCT PROFILE VANILLA

1. Product name: Vanilla (Vanilla planifolia L.)

Main varieties: V. planifolia, V. pmpona Schiede,

V. tahitensis J.W. Moore

2. Market requirements:
Vanilla sticks are the fruit pods of the tropical orchid
Vanilla planifolia L.Vanilla sticks are used either
whole or ground as spice. The best beans in the pod
have a strong taste. Vanilla is graded according to
the size of the pods, as well as their vanillin content.
The best qualities have a moisture content of 2325 percent and a vanillin content of 2.5 percent
(in dry matter).

3. Market structure:
Harvest and processing according to
growing area, demand throughout the
year. World production, fluctuating
around 2000 t/a, hardly meets demand
(of which 75% from US/Canada).
Climatic problems and poor harvest
cause fluctuations in annual
production. Due to these fluctuations
(with a serious dip in 1999-2000 in the
main producing countries) prices also
fluctuate substantially, resulting in
speculation by traders and
intermediaries.

Quality standards:
Smell and taste: typical for variety, strong,
aromatic
Purity: free from foreign matter, i.e. sand, stones,
shell parts, insects, etc.
Vanillin: min. 2 %
Ash: max. 7%
Residues: pesticides, bromide and ethylene oxide
not measurable
Mycotoxins: aflatoxin B1 max. 2 g/kg; total
aflatoxins max. 4 g/kg

Closing price per October 2002:

Madagascar type, extract grade,
delivered US (US$/kg): 180
Madagascar origin standard grade,
cif Europe (US$/kg): 200

22

4. Main suppliers:
The major vanilla
producing countries are
Madagascar (with an
average 1200 t/a, with
a dip in 1998-2000),
Indonesia, Mexico,
Comoros and Reunion.
Madagascar is by far the
leading supplier of vanilla
to the EU.

PRODUCT PROFILE VANILLA

Micro-organisms: mould (fungi) max. 100,000/g;

Escherichia coli max 10,000/g; Bacillus cereus
max 10,000/g; sulphite-reducing clostridium max.
10,000/g; Staphylococcus aureus max. 100/g;
Salmonella not measurable in 20 g.

Labelling:
The transport packaging should display details of the
following:
Identification (name and address) of
manufacturer/packer and country of origin
Description of the product and its quality class
Net weight
Batch number
Required storage conditions
Any other information requested by the purchaser
Packaging:
Bulk packaging: of vanilla sticks: in order to be
exported to Europe, the graded vanilla sticks are
generally sealed in units of 20-30 bundles (8-10 kg)
in metal tins lined with wax paper to avoid drying
out.
Consumer packages: consumer packages, e.g. plastic
tubes with screw-tops or single-layer plastic bags
(polyethylene or polypropylene), should fulfil the
following functions:
Protect the vanilla sticks from loss of aroma and
against undesirable smells and tastes from its
surroundings (aroma protection).
Protect the contents against damaging.
Offer sufficient conservation properties,
especially against loss or gain of moisture.
Provide a surface area for advertising and product
information.
Prominent notification of the vanillas ecological
origin.
Easy to open and re-seal, so that those vanilla
sticks remaining in the case stay fresh.
Vanilla powder in consumer size packaging, or in
bulk up to 25 kg fibre druims.
Vanilla extract in small glass bottles or up to
1000 l containers.

continued
Market trends:
Vanilla sticks have a high trading
value, and are used as a flavouring in
bakery products and confectionery,
chocolate, drinks, dairy products, icecream (as well as in the liqueur and
essence industries) and to manufacture
perfume. In addition to the processed
pods (vanilla sticks), the ground seeds
are also marketed as vanilla powder, or
extracted to produce a pure natural
vanilla extract (this extraction is
usually done in specialised processing
industry at export destination). Vanillapowder is sometimes mixed with
sugar, as vanilla sugar.
Serious (cheaper) competitors for
natural vanilla are synthetic vannilin
and ethyl-vannilin, produced in the
flavour industry. Their application is
constrained, however, by food
additive regulations, and they are
subject to more severe labelling
regulations.

5. How to improve the quality:

Preparation should take place under clean, hygienic and ideal conditions:
Equipment (tubs, knives etc.), as well as working and drying surfaces (racks, mats etc.) and preparing and storage rooms,
should be cleaned regularly.
Personnel should be healthy, and have the possibility to wash themselves, or at least their hands (washrooms, toilets) and
wear clean, washable overgarments.
Water used for cleansing purposes must be free from faeces and other contaminants.
Animals or animal faeces must not come into contact with the product. If the vanilla sticks are to be dried in the open, nets
or fences should be erected around them to protect against freely-roaming birds and animals.

23

PRODUCT PROFILE CUMIN SEEDS

1. Product name: Cumin seeds

Main varieties: Cuminum cyminum L, Carum carvi L.,

Nigella safira L. (black cumin)

2. Market requirements:
Quality standards:
Ash: max. 14%
Acid insoluble ash: max. 3%
Water content: max. 13%
Volatile oil: 1.4%
Stems and pieces: max 2%

3. Market structure:
Supply (growing, processing) and
demand: throughout the year. Prices
are relatively stable.

Sensoric quality:
Strongly aromatic; the aroma is characteristic and is
modified by frying or dry roasting. It should be noted,
however, that the different varieties have a distinct taste
and different applications.
Labelling requirements:
Product name
Batch code
Name and address of manufacturer/packer
Net weight
Required storage conditions
Any other information requested by the purchaser

Closing price per October 2002:

India cif (US$/mt): 2000
Iran cif (US$/mt): 1200
Market trends:
Cumin seeds are rich in flavour, used
in the production of special cheese
and bread, and as a household spice
for the preparation of soups, potato
dishes and vegetables.
In Europe, Carum carvi is the most
used variety, in the oriental kitchen,
(curries) Cuminum cyminum is more
popular.

4. Main suppliers:
Major production of
cumin takes place in
India, Syria, Turkey
and Iran. These
countries represent
also the leading
suppliers to the EU,
togehter accounting
for about 80 percent
of the total imported
value by EU member
countries in 2000.
Cumin seeds are also
cultivated in a
moderate climate.

Packaging:
Paper or jute bags 25 50 kg, preferably with
polyethylene lining
Polyethylene cover in carton box up to 25 kg
5.

How to improve the quality:

Careful selection of raw material
If water used for washing: clean water, free from microbiological contamination
Solar drying preferred: in closed tunnel-dryers or on scaffolds in covered and closed area, to avoid contamination and keep
insects and other animals out (in open drying on the ground serious risks of contamination exist)
Personnel should be healthy and have the possibility to wash themselves, or at least their hands (washrooms, toilets) and
wear clean, washable overgarments
Strictly avoid the use of fumigation or irradiation for decontamination
Careful monitoring of microbiological quality

24

PRODUCT PROFILE CLOVES

1. Product name: Cloves (dried, unopened and whole
flower buds of the Clove tree, whole or in powder)

Main varieties: Syzyium aromaticum L. Merr. et Perry,

Eugenia caryopyllus L.

2. Market requirements:
Quality standards:
Ash: max. 7%
Acid insoluble ash: max. 0.5%
Water content: max. 12%
Volatile oil: 14%
In the case of flower buds: only intact buds, without
foreign material, stems and clove fruits max. 5%,
fermented cloves max. 2%, extraneous matter max. 0.5%.

3. Market structure:
Growing and production throughout
the year, depending on growing
area. Demand throughout the year.

Sensoric quality:
Strongly aromatic and very intensive fragrance, fiery and
burning taste.
Labelling requirements:
Product name
Batch code
Name and address of manufacturer/packer
Net weight
Required storage conditions
Any other information requested by the purchaser
Packaging:
50 kg net coir gunny bags or other suitable packaging
material.
Transport and storage conditions:
At ambient temperature, keep dry, avoid high temperatures
(loss of volatile oils).

Closing price per October 2002:

Madagascar cif Singapore
(US$/mt): 3000
Madagascar cif European ports
(/mt): 3300
Sri Lanka stems cif (US$/mt):
750

4. Main suppliers:
The leading suppliers
of cloves to the EU
are: Madagascar,
Comoros, Sri Lanka
and India.

Market trends:
Harvesting from trees (up to
12 metres high) is gradually
changing to growing on low bushes,
which allow easier harvesting, but
have the disadvantage of shorter
span of life.
Cloves (either as whole flower buds
or as powder) are used for domestic
cooking in meat dishes, in spiced
wine and in herbal teas, in the food
industry for sauces, pickles and in
speciality bakery products, and in
the distillation of clove bud oil, used
in perfumery and medicines.

5. How to improve the quality:

Careful selection of raw material
If water used for washing: clean water, free from microbiological contamination
Preferably solar drying in closed tunnel dryers, or on scaffolds in covered/closed area, to avoid contamination and keep
insects and other animals out
Personnel should be healthy and have the possibility to wash themselves, or at least their hands (washrooms, toilets) and
wear clean, washable overgarments
Careful monitoring of microbiological quality
Strictly avoid the use of fumigation or irradiation for decontamination

25

PRODUCT PROFILE CINNAMON

1. Product name: Cinnamon quills

Main varieties: Cinnamomum zeylanicum (Ceylon cinnamon),

Cinnamomum cassia (Cassia).

2. Market requirements:
Cinnamon quills are the scraped peel of the inner bark
of mature (1 year old) cinnamon shoots, joined together
by overlaps, the hollow is filled with small peel.
Quality standards:
Ash: max. 7%
Acid insoluble ash: max. 2%
Water content: max. 14%
Volatile oil: 0.4% (volatile oil content cinnamonaldehyde is the main quality parameter)
Cinnamon quills are graded on the basis of the
diameter of the quills, number of quills per kg,
and extent of foxing.

3. Market structure:
Production according to growing area,
demand throughout the year.

Sensory characteristics:
Sweet prickly, spicy taste
Labelling requirements:
Name of the product
Name and address of manufacturer/packer
Net mass
Batch code
Required storage conditions
Any other information requested by the purchaser
Packaging:
50 kg net compact bale, covered with suitable material.

Closing price of Cinnamon bark per

October 2002:
Seychelles cif (US$/mt): 1400
Madagascar cif (US$/mt): 1150
Sri Lanka 3/6 inch sticks
(US$/mt): 6500
Sri Lanka chips (US$/mt): 530
Market trends:
Cinnamon is a well-known spice in
European food products, used as
cinnamon bark sticks or as powder.
It is mainly used in sweet bakery
products, confectionery and fruit
preparations, breakfast cereals,
puddings, spiced wine and spiced
teas. It is used in the flavour industry
for distillation of cinnamon bark oil
(good quality has a very high price)
and also increasingly used in the
pharmaceutical industry. It also finds
application in the traditional
Ayuurvedic medicine.

4. Main suppliers:
Main producers of first
quality Ceylon cinnamon
are Sri Lanka, Seychelles
and Madagascar.
China, Indonesia and
Vietnam produce the
lower quality Cassia
cinnamon.
Indonesia, Sri Lanka and
The Netherlands are
the leading suppliers
to the EU, although
The Netherlands
mainly functions as a
re-exporter.

Storage and transport conditions:

At ambient temperature, keep dry, avoid high
temperature (causes loss of volatile oils).
5.

How to improve the quality:

Controlled growing and harvesting
Careful selection of raw material: first quality bark with high volatile oil content
Solar drying in closed tunnel-dryers or on scaffolds in covered/closed areas to avoid contamination and to keep insects and
other animals out (open air drying on the ground has risk of contamination)
Personnel should be healthy and have the possibility to wash themselves, or at least their hands (washroom, toilets) and
wear clean, washable overgarments
Careful monitoring of microbiological quality
Strictly avoid use of irradiation and fumigation for decontamination

26

PRODUCT PROFILE GINGER

1. Product name: Ginger (dried roots of the ginger
plant, whole or powder)

Main varieties: Zingiber Officinalis Roscoe2.

2. Market requirements:
Quality standards:
Ash: max. 8%
Acid insoluble ash: max. 2%
Water content: max. 12%
Volatile oil: 1.5% (may vary according to
botanical variety)
Aflatoxins: aflatoxin B1 max. 5 ppb; total
aflatoxins max. 10 ppb

3. Market structure:
Production and demand throughout the
year.

Sensory characteristics:
Refreshing, lemon-like smell; pungent taste.
Labelling requirements:
Name of the product
Name and address of producer or packer
Net mass (kg)
Code or batch number
Required storage conditions
Any other information requested by the purchaser
Packaging:
50 kg jute bags or other suitable packaging material
Storage and transport conditions:
At ambient temperature, keep dry, avoid high
temperature (causes loss of volatile oils)

Closing price per October 2002:

Cochin cif (US$/mt): 1150
China whole cif (US$/mt): 1000
China sliced cif (US$/mt): 850
China dry (bleached) cif (US$/mt):
1120

4. Main suppliers:
Thailand, China and
Brazil are the main
suppliers of ginger to
the EU. Other
important non-EU
suppliers are Nigeria,
India and South
Africa.

Market trends:
Ginger is used, either candied in sugar
syrup or as a dry powder, in many
different cooking styles. It is an important
spice in Asian, Caribbean and African
cooking. In the EU, the spice is used in
home bakery (ginger bread); within the
European food manufacturing and
catering, it is an important additive to a
wide range of ethnic products as well as
to processed meats and soft drinks, such
as ginger ale. Recently, the demand for
ginger in teas and extracts has grown due
to its reputation as a medicinal plant
associated with digestive health.

5. How to improve the quality:

Careful welll-controlled growing, preferably not in large monocultures (risk of virus outbreak) but mixed culture with intercrops, preferably in half-shade
Careful selection of raw material
Cutting and drying under proper conditions
If water used for washing: clean water, free from any microbiological contamination
Solar drying preferred in closed tunnel-dryers or on scaffolds in closed/covered areas, to avoid contamination and keep
insects and other animals out - drying should be sufficient to avoid mould growth
Personnel should be healthy and have the possibility to wash themselves, or at least their hands (washrooms, toilets) and
wear clean, washable overgarments
Careful monitoring of microbiological conditions

27

3.2 Market analysis

In this section, a market opportunity analysis is
conducted through a methodology of ready-to-fill-in
frameworks. The analysis consists of four parts:

competitiveness assessment is an important tool for

exporters to determine whether there is still room
left for more suppliers. Exporters can complete the
ready-to-fill-in framework for each country they
intend to export to.
Markets are assessed on five criteria:

1. Country evaluation, to identify suitable countries

and markets for selling spices and herbs.

1.
2.
3.
4.
5.

2. Sales channel assessment, to estimate the

requirements of potential sales channels in respect
to product standards, logistics and marketing.
3. Company assessment, to assess your companys
performance in respect to product standards,
logistics and marketing.

Market potential
Product standards
Trade situation
Export conditions
Exporting experience

There are three possible answers to each question,

which are awarded 1, 2 or 3 points each. If there is
no exact answer to a question, it should always be
awarded 2 points, to avoid distorting the statistics
of the overall results.

4. Supply and demand comparison, to compare the

requirements of the sales channels with your own
company performance, so as to identify the most
suitable sales channel(s).

The points awarded for each criterion and the total

points awarded are entered in a table for the final
results.

The basic questions a future exporter has to ask

himself are:
Is there a market for my products?
Can I reach this market?
Can I offer my product at an acceptable and
competitive price?

The total points awarded give a ranking for the

markets analysed (top ranking for the country with
the highest number of points, etc.).
Finally, the markets can be evaluated relatively
(ranking) and absolutely (each market individually),
in order to assess the opportunities and constraints
within each market.

3.2.1 Country evaluation

The country evaluation helps to quickly determine
particularly attractive markets. In this respect,

Subject evaluated
1

points

Market potential

1.1 What is the estimated market size for spices and herbs?
large (3 pts.)
average (2 pts.)
1.2 How has the market volume developed during the last 3-5 years?
grown (3 pts.)
unchanged (2 pts.)
1.3 How have imports of spices and herbs developed during the last 3-5 years?
grown (3 pts.)
unchanged (2 pts.)

small (1 pt.)

..........

declined (1 pt.)

..........

declined (1 pt.)

..........

Evaluation of the market for spices and herbs

..........

Product standards

2.1 What standards are set on the quality of spices and herbs?
low standards (3 pts.)
medium (2 pts.)
2.2 To what degree are regulations in force?
low (3 pts.)
medium (2 pts.)
2.3 How high are the standards demanded on packaging methods?
low (3 pts.)
medium (2 pts.)

high standards (1 pt.)

..........

high (1 pt.)

..........

high (1 pt.)

..........

continued

28

continue
Subject evaluated
2

points

Product standards

2.4 How high is the demand on environmentally sound production methods?

low (3 pts.)
medium (2 pts.)

high (1 pt.)

Evaluation of product standards

..........

Trade situation

3.1 How high is the demand for new suppliers?

large (3 pts.)
average (2 pts.)
small (1 pt.)
3.2 How many producers / sellers (local and foreign) are there in the country concerned?
few (3 pts.)
average (2 pts.)
many (1 pt.)
3.3 What is the average price level for spices and herbs?
high (3 pts.)
medium (2 pts.)
low (1 pt.)
3.4 Is there a clear trade structure allowing for easy identification of trade partners?
very clear (3 pts.)
fairly clear (2 pts.)
not at all (1 pt.)
Evaluation of the trade situation

..........

..........

..........

..........

..........

Export conditions

4.1 Are there import restrictions that limit sales opportunities?

none (3 pts.)
few (2 pts.)
4.2 How high are the import duties?
low (3 pts.)
average (2 pts.)
4.3 To what degree is the domestic industry subsidised?
not at all (3 pts.)
somewhat (2 pts.)
4.4 Can I reach the market easily (cost of freight)?
competitive (3 pts.)
possible (2 pts.)

many (1 pt.)

..........

high (1 pt.)

..........

strongly (1 pt.)

..........

difficult & expensive (1 pt.)

..........

Evaluation of export conditions

..........

..........

Exporting experience (of potential exporter)

5.1 What is the level of information available on this market?

high (3 pts.)
average (2 pts.)
5.2 Do (or did) trade relations exist with the country concerned?
yes, at present (3 pts.)
yes, in the past (2 pts.)
5.3 Is language a problem?
not at all ( 3 pts.)
somewhat (2 pts.)
Evaluation of exporting experience

low (1 pt.)

..........

no, never (1 pt.)

..........

very much (1 pt.)

..........

..........

Total evaluation of the individual market

..........

29

points

appraisal

18-29

Either there are certain difficulties in trading with these markets or countries, or their attraction rating is
under-average. Examine individual cases to see whether special circumstances might have a positive effect on
trade with some markets or countries.

30-41

These markets or countries have an average attraction for trade. Examine individual low-rating criteria to see
whether, in special cases, they might have a decisive influence on building up a trading link.

42-54

These markets or countries are highly attractive. Building up or expanding trade relations could prove to
be worthwhile.

3.2.2 Sales channel assessment

After evaluating the prospective countries and markets,
the particular sales channels (agent, importer, packers,
supermarkets, restaurant, etc.) within these markets
must be assessed. After assessment of the performance
of your own company (next section), comparison of
the requirements of the sales channels with your
companys performance will enable you to identify

the most suitable sales channel(s) (Section 3.2.4).

Each sales channel is appraised on three criteria:
1. Product standards
2. Logistics
3. Marketing
The final evaluation of the sales channels takes place
after the evaluation of your own company performance.

Product standards

1.1 What quality standards does this sales channel demand?

low
average
1.2 What package sizes does this sales channel demand?
no specific
standard packaging
sizes: ..............
..............

high
specific sizes:

...............
..............
..............

1.3 What packing materials does this channel demand?

not specific
specific packing: ..............
1.4 What are the requirements of this sales channel regarding production techniques and certification?
no special
country-specific
requirements
regulations
1.5 What product groups does this sales channel demand?
no specific requirements
specific requirements:
not required
required
products required:
pepper

..........
paprika

..........
vanilla

..........
cinnamon

..........
cloves

..........
nutmeg

..........
mace

..........
cardamoms

..........
anise/badian

..........
coriander

..........
etc.

30

Logistics

2.1 How often does this sales channel normally require deliveries?
seldom
average
often
(approx. once a year)
(approx. 2-3 times a year)
(more than 3 times a year)
2.2 What formalities does this channel demand from the exporter?
none
complete shipping documents without Customs declaration
complete shipping documents including Customs declaration

Marketing

3.1 Where do negotiations for this sales channel take place?

in the producer
in a third country:
in the country of destination
country
............................................
3.2 Which persons influence business contacts in this sales channel?
head of company/
product group buyer
sales manager
marketing
general buyer
manager
3.3 How often does this sales channel expect a personal visit from the exporter?
seldom
once a year
more than once a year
3.4 What cycles of delivery does this channel demand?
none
seasonal emphasis
equally distributed throughout the year
3.5 What lot sizes are demanded by this channel?
not required
lowest quantity
normal quantity
pepper

.......... units per year

.......... units per year
paprika

.......... units per year

.......... units per year
vanilla

.......... units per year

.......... units per year
cinnamon

.......... units per year

.......... units per year
cloves

.......... units per year

.......... units per year
nutmeg

.......... units per year

.......... units per year
mace

.......... units per year

.......... units per year
cardamoms

.......... units per year

.......... units per year
anise/badian

.......... units per year

.......... units per year
coriander

.......... units per year

.......... units per year
etc.
3.6 What sales support material is necessary for business contacts with this sales channel?
none
price list
sales statistics
sales brochure
company brochure
3.7 What promotional material is necessary in this sales channel for the further sale of the products?
none
product information (size, drying, packaging, labelling, etc.)
special packaging and/or packaging size
product samples and/or sample packs
other: ........................
3.8 Which references are needed to guarantee my payment?
none
usual
strong references
3.9 Which are the usual methods of payment? (see Section 2.1.2)
letter of credit
document
other: ........................
against payment
3.10 Which are the usual terms of delivery? (see Section 2.1.2)
FOB
CFR
CIF

31

3.2.3 Company assessment

In order to identify the most suitable sales channel(s) for
your company in the paragraph below, it is important to
evaluate your companys performance on the same three
criteria as applied in the sales channel assessment:

1. Product standards
2. Logistics
3. Marketing

Product standards

1.1 What quality standards does your product fulfil?

low
average
1.2 What package sizes and materials do you use?
standard size
specific sizes:

high
.................
.................
.................

1.3 What packaging materials do you use?

none
usual ones
specific packing: .................
1.4 What requirements on production techniques do you fulfil?
no special
sales country-specific
requirements
regulations
1.5 How comprehensive is your product range in each product group?
not produced
one variety
pepper

paprika

vanilla

cinnamon

cloves

nutmeg

mace

cardamoms

anise/badian

coriander

etc.

several varieties

Logistics

2.1 How often are you able to deliver?

seldom
average
often
(once a year)
(once per quarter)
(more than once per quarter)
2.2 What formalities does this channel demand from the exporter?
none
complete shipping documents without Customs declaration
complete shipping documents including Customs declaration
2.3 Where do you load/ship your containers?
load at the production site
load at shipping agents warehouse
load normally consolidated containers

32

Marketing

3.1 Where do you hold your sales negotiations?

in the producer
in a third country:
country
.................
3.2 Which persons do you know who influence business contacts?
head of company/
product group
general buyer
buyer
3.3 How often do you visit your customers personally?
seldom
once a year
3.4 What cycles of delivery apply to your products?
none
seasonal emphasis
3.5 What quantities do you generally produce?
not produced
pepper

paprika

vanilla

cinnamon

cloves

nutmeg

mace

cardamoms

anise/badian

coriander

etc.

in the country of destination

sales
manager

marketing
manager

more than once a year

equally distributed throughout the year
lowest quantity
.......... units per year
.......... units per year
.......... units per year
.......... units per year
.......... units per year
.......... units per year
.......... units per year
.......... units per year
.......... units per year
.......... units per year

normal quantity
units per year
.......... units per year
.......... units per year
.......... units per year
.......... units per year
.......... units per year
.......... units per year
.......... units per year
.......... units per year
.......... units per year
..........

3.6 What sales support material is available for your product?

none
price list
sales brochure
campaign brochure
3.7 What promotional material is available for the further sale of the products?
none
product information (size, drying, packaging, labelling, etc.)
product sample
other: .....................
3.8 What is my financial availability for meeting the proposed terms of payment?
good
acceptable
insufficient
3.9 Which are my usual methods of payment? (see Section 2.1.2)
letter of credit
document
other: ...............
against payment
3.10 Which are my usual terms of payment? (see Section 2.1.2)
FOB
CFR
CIF

33

3.2.4 Determining the most suitable sales

channel(s) and opportunities for strategic
alliances
Using the checklists in the previous sections, you can
now compare the corresponding checklists of the sales
channel assessment and the company assessment, so as
to identify the most suitable sales channel(s) for your
products.

3.3 Building up a business relationship

The Business Guide for building up a trading link
consists of five sections:

Use the table below to record the number of answers

for each sales channel, which agree with one another
and those that do not.

2. Identifying a suitable trading partner:

(a) filling out a contact exchange form; and
(b) evaluating the information.

The highest sums of corresponding and noncorresponding answers show which sales channel is
the most suitable. Non-corresponding answers
represent problems that must be solved, before you
can sell your products through a particular sales
channel

3. Drawing up an offer:
(a) drawing up a general offer;
(b) drawing up a specific offer; and
(c) general remarks.

1. Reviewing the products and the product range:

(a) specifying range, width and depth;
(b) specifying the product characteristics;
(c) packaging design.

4. Handling the contract:

(a) contract terms; and
(b) contract fulfilment.

conditions conditions
agree
disagree
1

Product standards

1.1
1.2
1.3
1.4
1.5

Quality standards
Package size
Packaging materials
Production techniques
Product range

Logistics

5. Sales promotion:
(a) advertising and communication;
(b) sales organisation; and
(c) participation in trade fairs;
(d) Internet.

3.3.1 Reviewing the products and

the product range
(a)

2.1 Delivery frequencies

2.2 Formalities
3

Definition
A product range consists of several product groups
(range width), each with several different products
(range depth). One product can consist of several
varieties, depending on size, quality, colour, etc.

Marketing

3.1
3.2
3.3
3.4
3.5
3.6
3.7

Place of negotiations
Decision-makers
Frequency of visits
Delivery cycles
Quantities required
Sales support material
Sales support material
for further sale
3.8 Guarantee
3.9 Payment terms

Example:
A product range consists of spices and herbs
(range width).
The products for sale are pepper, paprika, vanilla,
cinnamon, cloves, etc. (range depth).
The pepper varieties are whole peppers and crushed
or ground pepper.
Reasoning
A supplier can only select a suitable business partner
if he/she knows exactly what range he/she can offer.
A precise review of the product range, therefore, aims
at identifying the most suitable candidate(s) out of the
many potential customers.

conditions conditions
agree
disagree
Number of answers

..........

Specifying range, width and depth

..........

34

product

(b)

variety/treatment

supply period

Specifying the product characteristics

(c)

Enter in the following list all spice & herb products

you produce, together with their varieties. Furthermore,
state their colour, size, the period in which you are
able to supply and the packaging method:

packaging

availability

Packaging

Special transport packaging is necessary to ensure that

spices and herbs arrive in perfect condition at their
destination. Unsuitable packaging often results in
damage to the product. The packaging design should
take the following into account:

Special remarks:
The reviews must enable potential customers to
make an appraisal of your complete product range.
The reviews must therefore always be kept
up-to-date.
The products, the range and the production facilities
should be flexible so that adjustments and changes
can be made, if the need arises.

Proper storage and transport

Standard packing sizes
Environmentally friendly materials
Attractive and sales-promoting design

The following questions aim at assisting you in

designing your packaging:

Proper storage and transport

(1) Have your importers ever complained about the quality of your products?
Possible causes:
h unsuitable packaging material
h unclean packaging
h insufficient ventilation during transport
h too many products in each packaging
(2) Do your importers use special transport packaging?
Reasoning:
h Perhaps you could use this special transport packaging as well.
h You may also be able to make use of the importers packaging know-how.
Standard packing sizes
(1) Does your importer use standard sizes?
Reasoning:
h Using the wrong package size can have a negative effect on your business.
(2) Do you use the package sizes 300 x 400 mm or 400 x 600 mm? If you also use pallets, are their sizes 1,000 x 1,200 mm
or 800 x 1,200 mm?
Reasoning:
h These are the usual sizes in international transport.
Environmentally friendly materials
(1) Fully recyclable packages must be used when trading with certain business partners. When doing so, please observe the
following:
h Use cardboard and avoid plastic wherever possible.
h Colouring materials, used for printing on the cartons, should not be harmful to the
environment.
h Use glue that does not harm the environment or no glue at all.
h Do not use metal clips for the cartons.
h Avoid waxed boxes or any combined packaging materials.
continued

35

continue
Attractive and sales-promoting design
(1) In many cases, spices and herbs stay in the transport package until they reach the retail level. In those cases,
your package design should therefore be attractive (printing colours, etc.) and have a sales-promoting effect.
Reasoning:
h A suitable design attracts more customers attention.
h A suitable design helps customers to recognise your products.
h Therefore, a suitable design can have a sales-promoting effect.

3.3.2 Identifying a suitable trading partner

(b)

Definition
Among the many potential customers, you must
identify those who match your own company profile
and product range and are therefore most suited for
building up a trading link.

Evaluate the names and addresses you receive,

using the following criteria:
Is the information complete?
full address;
telephone and fax number, e-mail;
name of the person to contact.
Is the importer active in the country you have
selected?
Does the importer focus his activities on the
corresponding product groups?
Do you have enough sound information about
the reliability of this partner?

Check your potential buyers financial status, their

credibility.
At the end of the identification phase, the supplier
should have selected the names and addresses of several
suitable trading partners.
(a)

Contacting one or more sources of information

Evaluating the information

Using these criteria, draw up a priority list of the

contact addresses you have received.

In the producer country:

The foreign trade chamber of commerce of the
country of destination.
The Economic Affairs departments of the official
representative (Embassy or Consulate) of the country
of destination.

3.3.3 Drawing up an offer

There are two different kinds of offers:
1. a general offer;
2. a specific offer.

In the country of destination:

Trade promotion organisation
Trade associations
Your own countrys public and private trade
promotion bodies
Your own countrys diplomatic and consular
representatives
Chambers of commerce
Trade fair organisers (catalogues)

The purpose of a general offer is to make the first

contact with potential trading partners with whom
the supplier is not yet personally acquainted.
A general offer consists of sending a short profile
of your own company and a summary of your
product range.
In a personal letter, briefly introduce your company
and tell what exactly you have to offer.

(a)

(b)
Points of attention:
Many sources of information only answer written
inquiries!
As a general rule: a concise but detailed inquiry
improves the chances of precise identification.

drawing up a general offer

drawing up a specific offer

A specific offer is legally binding for a certain period

of time. You must therefore be capable of fulfilling
the terms of contract. You should make up a specific
offer only when you know the business partner
personally or after you have made the initial contact.

36

When sending a specific offer, it should consist of

two parts:
(1) written offer:
Name of the person responsible in your
company;
Exact description of the goods offered
(preferably using an internationally valid
quality standard specification);
Price of the goods offered in accordance
with the Incoterms 2000 (ICC publication;
if applicable, split up by delivery quantities
or quality); and
Possible delivery date and terms of delivery.
(2) product samples:
Product samples must correspond to the goods
available for delivery (if they do not, this can
have a lasting negative effect on business
relations);
State the treatment methods used
(if possible, provide quality certificates from
an internationally recognised inspection
organisation and send a reference list of
existing customers).
(c)

Co-operate on a partnership basis and seek a

common solution even if conflicts arise.
Fulfilling the contract should have a high priority,
particularly when delivering for the first time.
3.3.5 Sales promotion
Sales promotion measures relate to developing and
expanding the following:
customer relations;
supply quantities.

Developing customer relations:

Take good care of existing customers. This includes
for example expressions of thanks to business
partners, regular information on the product range,
etc.
Brochures on your company and the product range
can be useful for promoting sales.
Ask existing customers for letters of reference. Such
recommendations are particularly important when
initially approaching new contacts.
Recipes or suggestions in trying the spice in a
different dish are given on the package of most
spices and herbs.

General remarks

Recommendable action for both kinds of offer:

A telephone call to ask whether the offer
(and the samples, if applicable) has/have arrived.
An invitation to visit your company.
Possibly propose a visit to the country of destination.
In that case:
If necessary, hire an interpreter.
Ask your own consulate or other intermediaries
for assistance.

Expanding supply quantities:

In some cases, you may be able to increase supply
quantities to existing customers.
The product range should be guided by the demand.
Changes to the product range may become necessary.
If you can increase the present quantities produced,
you could look for new sales outlets.
You can use your existing export experience to trade
with other importing countries.
Always answer a letter of inquiry. If you cannot
supply this contact, say so, explaining that you will
get in touch with him if/when the supply situation
changes.
Offer information on the health benefits of the
specific spice or herb or add recipes or suggestions in
using the spices and herbs in different dishes.

3.3.4 Handling the contract

When handling the contract, you should consider
the terms and the fulfilment:
(a)

Contract terms:

Conclude the delivery conditions according to

international guidelines (e.g. Incoterms 2000)
Particularly when delivering for the first time,
it is usual to deliver the goods free on commission
and freight-paid.
(b)

(a)

Advertising and communication

Definition
Advertising refers to communication measures with
the aim of increasing the sales of your products.
The prerequisites for successful communication
measures are:

Contract fulfilment:

Procure the delivery documents in good time.

Comply strictly with all parts of the supply
agreement.
If you cannot comply with any part of the agreement
(e.g. delivery delays or quality problems), inform the
customer clearly and in good time, ask if he is
prepared to accept this unforeseen deviation.

A clearly defined target group h Who buys my

products?
A well-formulated message
h What do I want to
tell the customer?

37

Criteria

Target group

Measures
Standard printed
matter
(letterheads etc.)

Existing
customers

Amount of
planning and
co-ordination

Cost per
contact

Total costs

Dispersion losses

Telephone and
mailing campaigns

Existing and
potential customers
(known by name)

++

++

++

Advertising in
trade journals

Existing and
potential customers
(partly unknown)

++

++

++

++

Promotion through
Existing and
an Internet site
potential customers
(partly unknown)

+++

++

+++ = high

++ = medium

+ = low

Costs and dispersion losses

Two parameters are used to measure the costs of any
communication measure:
Cost per contact
h How much does it cost
to convey the message to
one target company/person?
Total costs
h How much does the whole
campaign cost?

(b)

Sales organisation

The term sales organisation refers to the organisational

system that carries out the sales of the companys
products and pursues quality control. A sales organisation
usually consists of office personnel and a field force.
Organising sales
Business with partners overseas is often concluded on
the telephone, by fax or by e-mail. A well-functioning
sales department is therefore an absolute prerequisite
for successful market participation.

It must be borne in mind that not all messages sent

actually reach the addressees (target persons).
The costs for messages that do not reach the right
addressee are called dispersion losses.

The essential tool used in the sales department is

a detailed and up-to-date customer database.
The customer data base contains the following
information:
h Basic data on the customer (e.g. long-term data
such as name, address, telephone number,
e-mail, etc.);
h Changing data on the customer (data resulting
from business with the customer such as
telephone calls, offers, sales statistics, etc.).

Recommendations
It is advisable to commence with communication
measures, which only require a small amount of
planning and co-ordination, such as revising the
companys standard printed matter:
Standardise all printed paper used outside the
company (letterheads, visiting cards, fax form, etc.).
Prepare long-term sales documentation
(company brochure, product range reviews, etc.).
Prepare product-specific sales folders.

The customer database gives a sales person a

quick review of the most important customer data
when planning to contact the customer whether by
telephone, fax or e-mail.

If your company has an Internet site, you can make sales

documentation and folders available electronically.
By making sales documentation available electronically,
you can reduce the amount of printed documentation
you need to send, as well as the related costs.

If possible, the customer database should be

computerised, because this simplifies changes,
updating, sorting and selection procedures, etc.
If computerisation is not possible, the customer data
should be kept on file cards (see samples).

Constant, prompt and reliable communication is a

vital prerequisite for maintaining a long-term business
relationship with a customer.

38

Office personnel

Field force

Handling correspondence
Handling offers and orders
Issuing forwarding instructions
Issuing and checking invoices
Controlling schedules
Keeping customer records
Expediting product samples
Keeping sales statistics
Evaluating markets
Dispatching goods
QUALITY CONTROL

Selling
Visiting customers
Presenting new products
Discussing and implementing campaigns
Discussing listings
Holding yearly reviews with customers
Implementing selling prices

Customer Data Sheet

Company:
Company:
Street:
P.O. Box:
Postal code:
Town:
Country:
Tel.:
Fax:
E-mail:
Internet:
Bank:
Bank address:
Account No:

.......................................................................................

Customer No.:
Customer class*:
First contact date:
Sales person:
Customer type:

.......................................................................................

(agent, importer, manufacturer)

.......................................................................................

Sales last year:

Sales planned this year:
Method of payment:
Delivery conditions:
Remarks:

.......................................................................................
.......................................................................................
.......................................................................................
.......................................................................................

.......................................................................................
.......................................................................................
.......................................................................................
.......................................................................................

________
A
B
__/__/__

.....................................................................................
.....................................................................................

.......................................................................................

.....................................................................................
.....................................................................................
.....................................................................................
.....................................................................................
.....................................................................................
.....................................................................................

.......................................................................................

Business partners:
1

Title:
Function:

.......................................

Title:
Function:

.......................................

Title:
Function:

.......................................

Title:
Function:

.......................................

.......................................

.......................................

.......................................

.......................................

First name:
Tel.:

....................................................

First name:
Tel.:

....................................................

First name:
Tel.:

....................................................

First name:
Tel.:

....................................................

....................................................

....................................................

....................................................

....................................................

Name:
Fax:

..........................................

Name:
Fax:

..........................................

Name:
Fax:

..........................................

Name:
Fax:

..........................................

..........................................

..........................................

..........................................

..........................................

* Classify customers by importance to your company (sales, quality of relation, etc).

39

E-mail:

.................................

E-mail:

.................................

E-mail:

.................................

E-mail:

.................................

Customer contact record

Date

(c)

Contact person

Topic / Offer

Participation in trade fairs

(d)

Participation in national and international trade fairs

can be a useful sales promotion tool in the trade of
spices and herbs. This aspect requires comprehensive
and detailed examination because of its complex nature,
comprising:
selection of a suitable trade fair and preparations for
participation;
budget for participation;
participation;
follow-up.

Contract

Internet

Internet is generally considered to offer many

opportunities as a new means of communication
between people and organisations.
The advantages of the Internet are:
low cost of communication
fast delivery
independence of distance and timeline
hardly any limits in size
multimedia possibilities
etc.

Trade fairs, in the same way as a promotion campaign,

need thorough preparation, viz.:

Besides one-to-one communication, Internet offers

opportunities for presentation, (market) research,
distribution, sales and logistical improvements.
If your target group consists of importers/industries in
overseas countries, you can advertise for (new) clients
on your Internet site, showing your product line and
indicating the conditions. A good Internet site can
present your company to every potential client in any
country with access to the Internet. You must realise,
however, that your organisation must be thoroughly
prepared to receive requests from all over the world.

Before the trade fair:

up-date your customer files
prepare all documentation (business cards, company
brochures, product range, etc.)
make a preparatory mailing, informing your present
and potential customers of your booth number and
inviting them to visit you in the booth and/or propose
to visit them (i.e. the existing clients).
During the trade fair:
register all contacts

To find the right site offering the right product is very

time-consuming. Internet users are increasingly looking
for sites that offer a line of products around a certain
theme or area of interest. Consequently, unlike
traditional marketing, export marketing through Internet
should focus on themes or areas of interest. It may also
be useful to present your organisations name at several
search engines on the Internet.

After the trade fair:

enter all your contacts in a database
answer the contacts to thank them for their visit and
send the information (product specifications, tradeoffer, samples, etc.) you promised
you can make a second mailing several months after
the first one, to remind your contact that you are at
his disposal to answer any inquiry.

When using Internet you will have to look at

complementary products and products fulfilling the
same demands. Internet sites of Standard Organisations
and Trade Associations (see respectively Appendix 3
and 5 of CBI EU Market Survey Spices and Herbs)
provide good information on guidelines, services,
news and events.

Trade Promotion Organisations in the European Union

can be of help in providing information about relevant
trade fairs. They can also advise and/or assist the
exporter with participation in a trade fair.
For more information on this subject, please refer to
Section 2.2.1.

If you include links to other interesting sites on your

site to other interesting places on the Internet, your site
might add value as well. If other sites put a link to your
site, you will also attract more visitors.

40

As each customer decides by himself where he browses

at the Internet, it is important to address him personally.
Internet offers many opportunities to personalise your
offer. You need to keep in mind that Internet is a
pull medium so you have to attract the customer to
your site with a good offer. The visitor will choose
his own way in the structure of your site.

By adding cookies (small software tools that register

and recognise a customer when he comes back) you
can give your customer a personal welcome.
Besides the Internet, there are other electronic media,
which can be used in export marketing such as video,
CD-ROM and diskette. In the box below, an overview
of the value of a number of carriers is presented.
For further information about electronic media in
export marketing, please refer to the CBI News
Bulletin no. 263 of March 1999. Information on
setting up an Internet site can be found in the CBI
Bulletins nos. 273, 274, 275 and 276 issued in 2000.

Therefore, you have to facilitate this through easy

access to your message, by adding the most important
issues to your homepage and providing easy-to-use
search engines, good keywords for your database
selections and a fast but attractive lay-out.

Value

Multimedia

Interactivity

Multilingual

Capacity

Compatibility
of market

Penetration

Price

++

++
++
++
+

++

++
++
++
++

++

++
++
++
++

+
+
++
++
++

++

++
++

++
++
+

++
+

+
0

0
+

Carrier
Diskette
Video
CD-rom
DVD
Hard disc
Internet

DVD: Digital Versatile Disc

++ very good; + good; 0 reasonable; average; poor
Source: CBI News Bulletin, No. 263, March 1999

41

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