How can Spain strengthen its position in the UK fresh produce market?

Amid various pressures on fresh produce exports from Spain to Britain, leading figures from fresh produce, wine, cheese and specialty foods converged on the Royal Over-Seas League in central London to explore ways to strengthen Spain’s position in the UK market.

As far as fresh produce trade is concerned, the key message from the Spain Food Nation Summit on 9 September was that “the UK needs Spain, and Spain needs the UK”. This is to say that the UK remains hugely reliant on fresh produce imports due to its limited domestic production and low self-sufficiency. Meanwhile, Spain is the biggest fruit and vegetable producer in the EU – and big producers need big customers.

So, although the trading relationship between the two countries has been rocked by various challenges in the past few years – not least Brexit, supply shortages, and strong competition from Morocco – the message from the summit was that we are unlikely to see a major shift away from Spanish supply.

As it stands, the UK accounts for 12 per cent of Spain’s fresh produce exports (behind Germany on 27 per cent and France on 18), with Spain supplying 25 per cent of Britain’s fruit imports and eight per cent of its imported vegetables.

Nevertheless, Edwin Reyes of Promar International warned in his presentation that Spain should not take its strong position in the UK market for granted and must instead foster a culture of continuous improvement by growing in key categories (leafy salads, citrus, stonefruit, strawberries, etc) as well as expanding into new ones (figs, dragonfruit and other exotics). Spanish suppliers should commit to the UK for the long term, he said, and adopt a more strategic approach to supplying Britain’s leading retailers.

At a time of squeezed margins for producers internationally, the greatest opportunities to turn a profit lie in supplying top-tier varieties. In a roundtable discussion moderated by Fruitnet’s Mike Knowles, managing director of AMFresh UK, Mark Player, said UK retailers share major producers’ desire to premiumise so they can widen their margins. The last thing they want is “a race to the bottom” on quality, he said.

One limitation for Spanish suppliers is that the UK market is dominated by six or seven major retailers. And while there are some sales opportunities in foodservice and wholesale, these channels are less significant.

Reyes argued that Spanish produce has a positive image among importers, retailers and others in the UK supply chain. Indeed, Spain has been the largest external supplier to Britain for many years. There has been significant investment in Spain from UK fresh produce companies, such as AMFresh, G’s and Barfoots. And this gives the sense that in many ways the two industries are “joined at the hip”.

Where Spain has been less successful in the UK market is in marketing its produce to consumers and making the origin more visible at point of sale. Player said it is key for Spanish suppliers to build tertiary brands with UK retailers to promote Spanish produce in store and online.

Meanwhile, Matt Hancock of Norton Folgate and Ventina Partners said lessons can be learned from the Chilean Fruit Exporters Association (Asoex). The industry body supplies robust data to producers and exporters and successfully promotes the country’s fresh produce overseas “in a joined-up way”, he said.

Check out the FPJ’s Spain Special, published on 24 September, for a full, in-depth report.