Dr. Nikolaos Belias, Head of the Economic and Commercial Affairs (ECA) Officein Paris at the Greek Embassy in France explains to Ambrosia Magazine why gourmet and delicatessen stores, offering high-quality products is probably the best way to enter the French market. Undoubtedly one of the most high end markets to enter, not only in Europe, but worldwide, and with a complex retail system, consisting of a local, a regional and a national level, France is a challenge in itself for prospect exporters, the main one being the consistency in covering the demand.
Interview: Charitomeni Vonta
What is the structure and particularities of the French market?
If we look briefly at the structure of the French market, it should be pointed out that food retailing is dominated by four large retail groups representing around 75% of the market. In France, there are more than 44,000 food outlets scattered throughout the country. An interesting thing to point out is that retail chains operate at three levels: local, regional, national.
In recent years, hypermarkets and supermarkets have been experiencing a structural decline in product sales. However, the level of concentration is particularly high in the food industry, where the brands of multinational companies are dominant. Noteworthy is the particularly strong presence of private label products in the retail trade. Also worth noting the fact that large-scale food distribution in France clearly favors and prioritizes French products.
The profit margin in mass distribution is relatively tight in supermarkets, for all fresh food divisions: 1.8% before tax and stands at 1.2% after tax.
In addition, it is worth emphasizing that high food inflation is forcing large chains to turn to cheaper solutions, while the once dynamic market for organic products is now showing signs of recession. However, as experienced analysts observe, the decline of the organic products market is a temporary phenomenon that is basically due to the current difficult situation.
In addition to large distribution stores, an important role is also played by the popular markets in France that offer fresh products from small producers, but also products that are supplied on the same day from the central market of Rungis (it should be noted that this is the largest market in Europe that serves millions of consumers).
A significant market share in regard to the total sales is also held by gourmet/delicatessen shops, which offer high-quality products, aimed mainly at the upper income part of the consumer public.
The structure of the market is completed by the so-called ethnic market (according to the data of our Office there are about 100 shops specializing in Greek products), as well as neighborhood shops, mini markets and grocery stores.
Which are the most popular Greek exporting products and which product, according to your experience, has significant prospects?
There is significant room for improvement for Greek exports of agri-food products, taking into account the size of the French market and the relatively small market share they hold in it.
The first place in our exported agri-food products is occupied by cheeses with a value of €60 million, fish products with a value of €45 million, peaches (€28 million), yogurt with €18 million and olives and olive oil (€17 and €13 million respectively). Immediately after are apricots of all kinds (€13 million), nuts, fruit and fresh kiwis with a value of €5 million, wines from fresh grapes with a value of €4.7 million. Vegetables, nuts and fruits (€4 million) make the first ten.
The traditional exportable Greek agricultural products and foods have strengthened their presence in the French market in recent years, most prominent being fish farming products, feta cheese and fruit and vegetable preparations. A significant improvement is also observed in the exports of yogurts, olive oil and olives.
There are certain Greek products, proven to have comparative quality and competitive advantages, that could improve their export performance. These products mainly include honey, wines, nutritional supplements, herbs and aromatic plants, as well as prepared foods and bakery products.
We should also point out that food products can take advantage of the growing preference of French consumers towards high quality organic or natural and traditionally prepared products, with an emphasis on healthy and pure ingredients. The French consumer is increasingly checking the quality ingredients and origin of a product before buying it. In this context, the correct marking is of particular importance.
What are the conditions of competition that apply to the French market and the conditions to access it?
Greek products currently have a limited share in the French market. Greek export companies are at a disadvantage because they have neither the size nor the strong commercial networks of their competitors, especially from countries such as Italy and Spain. In addition, they are often not able to offer the quantities requested by the large chains on a consistent basis, while Greek products have not gained sufficient recognition from the French consumer public.
As mentioned above, retail chains operate at three levels which imply different access possibilities for prospective foreign suppliers to the distribution system. Specifically, access to the national level is practically unattainable for medium-sized Greek businesses. A necessary condition for the access of Greek products to large distribution chains is the particularly demanding process of “referencement”, i.e. the fulfillment of the required conditions, in order to be included in the list of fixed suppliers of the group either at a central (Centrales d’Achats) or at a regional level. At the regional level, there is some possibility of approaching store managers and category managers. The possibility to access is greater at the local level and especially in stores whose managers are also owners (franchises).
However, even when some Greek products successfully pass these tests, they face other difficulties. For example, they are asked to negotiate hard with the purchase managers of each group, at the central or regional level, or at the product category manager level, regarding how many points of sale the product will be placed, discounts on the initial agreed price depending on the scope of the placement, the free delivery of a specific quantity during and immediately after the trial period, as well as a discount for staying on the shelves after a period of time. Only a small number of products (the core being our traditional main export products: yogurt, cheeses, olive oil, olives) have so far managed to gain appreciable access to the major distribution chains.
Given the low prices and strong competition from the big chains from low-cost countries, the primary goal should be to gain access to the gourmet markets. In particular, small producers should address themselves mainly to delicatessens, where exquisite, original and authentic, premium class food products, from selected small producers, are constantly in demand. It should be noted that the distribution of Greek food products is primarily based on the network of importers of Greek origin, with whom the Paris IEA Office has developed systematic and multifaceted cooperation.
It is also particularly important to draw up promotion programs -possibly with European funding- of the main Greek products, such as cheese products, olives and wines. These programs include a network of actions such as in-store promotion, collaboration with cooking schools, wine tasting, buyer invitations, advertisements in specialized publications, etc.
In terms of improving access to mass distribution stores, Greek exporters should aim to:
- Partner with importers and wholesalers who have access and connections to major stores.
- Organization of business missions in cooperation with institutional bodies, such as the Athens Chamber of Commerce and Industry (EBEA) and Enterprise Greece.
- Parallel “in store promotion” type actions or Greek corner in selected large stores.
Another way to enter the French market is through finding a partner or commercial agent, who will determine if the product to be imported meets the necessary specifications and will explore the possibilities of placing it on the French market.
Participating in trade fairs is also particularly important. A very large number of Trade Fairs is organized in France. These Fairs are known for their strongly international character, as they offer participants the opportunity to come into contact with buyers from all over the world. It is particularly positive that Greek businesses consistently participate in 25 International Trade Fairs throughout France annually, some of which take place twice a year. Last but not least, a website is essential for a business that wishes to operate in the French market.
What are the targeted initiatives and actions that the Paris ECA Office is planning, in order to improve the position of Greek products in the French market and to strengthen Greek exports?
The main objective of the Paris ECA Office is to improve the access of Greek food products to the French market and especially to the large distribution chains. In this context, our Office in collaboration with the Athens Chamber of Commerce and Industry (ACCI) and the ELLA-DIKA MAS initiative organizes a business mission to Paris and Lyon, in collaboration with the Forum Francophone des Affaires and the Chamber of Paris, in April 2024. A fundamental priority is also the coordinated utilization of the Regions’ outreach programs for the presentation and promotion of branded products and PDO / PGI products of each Region. For this purpose, our Office organized in May 2023 a business mission to Crete, while for this year it is planning a business mission of French companies to Central Macedonia and Attica, respectively, with the participation of importers, wholesalers, distribution chain managers and journalists in cooperation with the authorities of the respective Regions.
In addition, in view of the preparation of the mission of the ELLA-DIKA MAS initiative in collaboration with the ACCI, the Paris ECA Office has been in contact with important French importing companies, which have direct access to large chains and wish to diversify the range of products they offer by adding Greek products which are considered authentic samples of the Mediterranean diet.
It is also of particular importance to support the participation of Greek companies in major food fairs, such as SIAL, in which more than 300 Greek companies participated in 2022 (the Greek participation being the 5th largest among foreign exhibitors).
Last but not least, it is worth mentioning the contacts that our Office has made with the managers of the largest vegetable market in Europe, Rungis, in order to improve the access of Greek agricultural products and food to the French market.