Venturing into New Markets: Diversifying Export of Exotic Flowers Part II

1. REQUISITOS DE COMPRADORES Flores Exóticas Part II: Export guidelines – diversifying markets • Going East – CzechRepublic case • Why to venture intonewmarkets • Tradechannels • Existing and futureopportunities • Business practices • Product marketing • Delivery, payment, services

2. Venturing into new markets • Unexplored and unexploited • Alternative to saturatedmarkets • Smaller companies  targetting smaller buyers • Pioneering • Expandingmarkets, findingnewclients • Framework of Free TradeAgreementwith the European Union

3. Going East – main markets • Main East-European destinations for exotic fruits: • Czech Republic • Bulgaria • Poland • Segmentation • Large retail chains are the main segment • The catering industry • Small retailers are losing ground

4. European market Colombia Czech retail market Czech wholesalers Small retailers West -European specialised importers Colombian exporters supply Northwest European specialised importers, which re-export the products to the Czech market. 1 Catering industry Colombian exporters Czech mainstream importers 3 DIRECT SUPPLIES: POSSIBLE? Large retailers • Colombian exporters supply Northwest European mainstream importers, which re-export the products to the Czech market. 2 West-European mainstream importers Main distribution flow Secondary distribution flow

5. Direct supplies – Possible? Colombian exporters supply Czech mainstream importers, which supply the Czech market. Opportunities • Czech buyers are interested in consolidated orders of different exotic fruits (Colombia’s competitive advantage) • Growing market due to increase of disposable income • Holiday season provides window of opportunity to establish trade relations (stepwise approach) Challenges • Small demand  Lack of scale required for cost-efficient transport of exotic fruit • Underdeveloped infrastructure (lack of good flight connections from South America to the Czech Republic)

6. Promotion – crucial step Heavy promotion is required for the realisation of sufficient demand for direct imports • Promotion at the retail level • Store promotions – tasting, explanation of use, recipe ideas in Czech language • Colombian week? • Specialtyshelves • Promotion in cooking programmes / Internet / Social media • Trade fairs • QR-codes on product label  unification of technologies

7. Promotion – crucial step • Promotion at the wholesale level • Accurate product description (EU or UN standards) - www.codexalimentarius.org • Photos of the product and packaging • Delivery capacity per year per product (supply calendar) • Possible delivery dates • Information about the available storage and processing facilities • Branding (company’s logo, revealing reputation) • Export references • Quality certificates (e.g. GlobalGAP, HACCP ,BRC, etc) • Contact details (on brochures, website) Example of a supply calendar:

8. Product marketing - website • Website – doinggood, and causingnoharm • High-quality websites are associatedwithmodern, professional approach • Website shouldinclude: • well-definedproduct characteristics • strenghtsof yourcompany, such as certificates, specific story, quality and deliverysystems, etc. • History and track record • Product presentations, catalogues, brochures (thusalsosavingprintingcosts) @ Good example: Frutierrez

9. Product marketing – trade fairs Important events • Fruit Logistica - www.fruitlogistica.de - world's leading fresh fruit and vegetable trade fair. Takes place every year in Berlin, Germany. • Biofach- www.biofach.de - most important international exhibition for organic food and fair trade products held every year in Nürnberg, Germany. Findingpotentialbuyers

10. How else to find potential buyers? Interesting sources – Internet databases & marketplaces • FreshPlaza - www.freshplaza.com meeting place for the international fresh produce industry. • Foods for Trade - www.foodsfortrade.com leading B2B marketplace for the food industry. • Greentrade - www.greentrade.net online marketplace with the worlds’ largest database of the organic farming industry. • Zipmec - www.zipmec.eu largest search engine for fruit and vegetablecompanies in Europe Information sources: Eurofruit Magazine, Fresh Info

11. Terms of delivery and payment • If required… • Pesticide control! • Samples which represent what you can deliver: • Quality • Quantity • Time • Packaging material • Sampling • Rare • Buyers assume traders are familiar with the product standards • Not willing to pay for samples • Terms of delivery • Lead time: 3 days (air transport) • Incoterms: • quote your prices Free-On-Board (FOB) in the case of sea transport and CFR/CIF in case of air transport. • pay attention to strict contract fulfilment regarding contingencies during export procedures, transport, etc. • Insurance: costs are approximately 4 % • Valuable when product quality is compromised during transport • Costs cannot be reimbursed if damage results from factors which cannot be controlled, e.g. volcanic ash • Make sure there are thermometers installed on board or on the pallets

12. Terms of delivery and payment • Contracts • Buyersprefer open accounts • Communication serves as a formalagreement(e.g. e-mails) • Non-compliance Contract example: International Trade Centre • Terms of payment • Trade of smallquantities- fixedprices • Trade of largequantities - on the basis of consignment. • Price-fixing more common in the holidayseason • Pre-financing is more commonfor partners whoalreadydid business together • Payment documents (involving 3rd parties) are often avoided in the fresh fruit trade • Paymenttakes place within 2 weeks • Every delivery should be accompanied by an official customs invoice for customs declaration

13. Not to forget… Integrity Punctuality Respect for legal arrangements Cultural aspects – DOs and DON’Ts

14. Gustavo Ferro mail@ThisIsProFound.com