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The Netherlands: Gateway for Food Products to the EU

Although a small country, the Netherlands is the gateway for products into the European Union (EU). It is the largest importing country within the EU and continues to be the second largest exporter of agricultural products in the world, after the United States. Dutch exports include products produced in the Netherlands as well as imported products.

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The Netherlands is a small country in Western Europe, bordering Germany to the east, Belgium to the south, and the North Sea to the northwest. The largest and most important cities in the Netherlands are Amsterdam, The Hague, Rotterdam, and Utrecht, together referred to as the Randstad. Amsterdam is the country’s capital, while The Hague is home to the Dutch seat of government and parliament. The Netherlands’ name literally means “Low Country,” influenced by its low land and flat geography, with only half of its land exceeding one meter above sea level.

The fundamental strengths of the Dutch economy continue to be the Netherlands’ stable political climate, highly developed financial sector, strategic location, a well-educated and productive labor force, and high-quality physical and communications infrastructure.

Roughly a quarter of the population in 2030 will be 65 years and older (it was 19 percent in 2018). Not only is this group of consumers growing, but they are also expected to be more affluent, more active, and more experimental with food than ever before.

About half of the Dutch population currently lives in cities and the increasing trend of moving to urban areas is expected to continue. Between this year and 2035, the Dutch population will grow by over 1 million people, of which three-quarters are expected to be born in cities. The population of Amsterdam alone will grow by 150,000 and exceed 1 million inhabitants in 2036.

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Consumers are no longer shopping at traditional times and or locations, particularly in Dutch cities. Breakfast is increasingly bought on the way to work. During lunch breaks, people decide what they want to eat for lunch and buy it on the spot. Dinner is more often bought on the way home.

As a result, innovative convenience stores, either small independent or part of a larger chain, are opening near metro/train stations, schools, office buildings, and shopping malls. For expansion, food retailers are now looking at other, perhaps less-conventional locations that attract a lot of people traffic, including hospitals, schools, and office buildings or near highways, train stations, and airports.

Demand for Sustainable Food Products Is Up

Total consumer spending on foods certified as sustainable grew by an impressive 7% in 2020 to over $9.6 billion (€ 8.2 billion). The share of sustainable food compared to total spending on food is estimated to have been 16% in 2020.

Over the last decade, Dutch food retailers increasingly prefer to source food products which are produced sustainably or obtained in a sustainable manner.
Sustainable food products are recognizable by consumers when they have a quality mark. Products with the animal welfare ‘Better Life’ (Dutch: Beter Leven) quality mark were sold the most (€2.8 billion) followed by products labeled as organic (€1.6 billion) and product with the ‘UTZ Certified’ quality mark (€1.5 billion).

Sustainable food continues to be the most important growth market in the Dutch food industry. A wider range of certified products and changing consumer preferences (paying more attention to sustainability and health) explains the growth in spending on these products. Most of the spending takes place in the supermarkets, mainly due to a wider availability of sustainable products.

Another growing trend in the Netherlands, according to a Euromonitor, is the rising interest in plant-based diets, supported not only by an increase in the number of vegetarians or vegans in the country, but also a general shift in consumer lifestyles.
Specifically, the health trend is encouraging an increasing number of consumers to adopt a flexitarian attitude and reduce the amount of animal-based products that they consume. Sustainability, concerns over animal welfare, and health trends are driving this movement, which continues to benefit sales of meat substitutes.
Meat-free alternative diets are moving into the mainstream as Unilever took over the Dutch company De Vegetarische Slager (The Vegetarian Butcher) and Beyond Meat expanded production in the Netherlands through its cooperation with Zandbergen.

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In addition to sustainability, consumers (often Millennials and Generation Z) seem to be willing to pay for authenticity. They want to hear or read about who produced a food product and what the story behind the product is. This desire for authenticity also applies to foodservice outlets. Hosts that have a story to tell about their restaurant, cafe, or bar appeal to today’s consumers.

The demand for convenient healthy and nutritious food products (albeit at an affordable price) is growing more than ever before. Consumers are looking for and finding more information on eating healthier.

The following sectors offer opportunities for new sales: healthy food snacks, tree nuts, pulses, food products with a special certification (organic, sustainable, free-from claim, etc.):

Best Consumer-Oriented Product ProspectsImports, million USD
Food preparation1886M
Processed vegetables1810M
Bread, pastry, cakes987M
Dog & cat food699M
Odoriferous substances438M
Cookies313M
Coffee extracts104M
Source: TDM 2020

Consumers in the Netherlands are expected to continue to buy more plant-based foods and private label brands as well.

Nielsen figures show that the market share for private labels in 2020 was strong at 30% or higher in almost all European countries. Leading the market were still Spain and Switzerland where every second product sold was a retailer brand, the Netherlands’ market share increased to 37.1%.
Several retailers in the Dutch market have developed two private labels; one focusing on price and the other on enhanced quality.

The Dutch Food Retail market

The Dutch retail sector is fairly consolidated, with the two largest food retailers controlling nearly 60% of the market.

High-end supermarkets continue to gain in popularity as consumers are demanding service, variety, and fresh and convenient products.  The top two food retailers in the Netherlands, Albert Heijn and Jumbo, had a combined market share of 56.5% in 2020. The market share held by German discounters, Aldi and Lidl, combined at almost 16.2% last year.

Roughly 80% of all food retail outlets are full-service supermarkets, operating on floor space between 500 and 1,500 square meters and located downtown in cities or residential areas. Retailers with full-service supermarkets have responded to the consumer preference to have these supermarkets close to their homes.
The remaining 20% includes: predominantly ‘on the go’ or convenience stores including SPAR City, Jumbo City, COOP Vandaag, and AH To Go, located near office buildings, train/metro stations, and high traffic areas in city centers; some wholesalers; and just a few superstores like Albert Heijn XL and Jumbo Foodmarkt, all conveniently located in shopping malls or industrial parks.

The Dutch Foodservice market

Even after a period of reflection and uncertainty during the COVID-19 lockdown, Dutch consumers still seem to be stressed and pressed for time. They are struggling to do many things on a regular weekday such as taking care of the children, doing their job, going to the gym, engaging socially, and, of course, eating. Consumers are faced with a dilemma: less time for buying food and preparing meals versus a growing awareness of and interest in health and nutrition.
As a result, the demand for convenient and healthy and nutritious food products (albeit at an affordable price) is growing more than ever before. Demand is also growing for packaged food in smaller portions due to the growing number of people that are watching their weight and the shrinking average household size. People are increasingly eating alone and/or eating out. International cuisines that are gaining popularity include foods from Israel, Lebanon, and Syria.

Competitive Situation for Selected Consumer-Oriented Products

Unlike the retail sector, the Dutch foodservice industry is fragmented and has many independent players. This is especially the case for cafés/bars, restaurants, cafeterias, and street stalls/kiosks. Most fast food and delivery outlets, however, are consolidated and often part of an (international) chain.
Independent players, like restaurant owners and hotels, prefer to purchase from wholesalers and distributors. They prefer to have products delivered since this will save them time and will ensure products are available when needed.
High-end hotel and restaurant buyers prefer to buy fresh products like bakery, produce, seafood, meat, wine, and dairy products from specialized distributors. The benefit lies in the possibility to have tailor-made orders and the interpersonal relationship. Beer and non-alcoholic beverages are generally bought directly from breweries. For shelf stable grocery products, like spices, nuts, sauces, cooking ingredients, distilled spirits, and cider, hotels and restaurants turn to wholesalers.

Craft beer
Strong demand for new flavors, funky labels, and innovative tastes. Competition from neighboring countries, dominated by Belgium and Germany.

Sweet potatoes
Supermarkets are increasingly selling fresh and processed sweet potatoes. There is demand for variety and quality. Competition from Egypt, Spain, China, and Honduras. The U.K. and Belgium do not produce but re-export sweet potatoes.

Wine
France, Germany, Italy, and Spain have well known, good quality wines at competitive prices. They are also popular holiday destinations.

Distilled spirits
Demand for branded, good quality, tasty, and unique products that have a story to tell.

Seafood (Seafood products)
The Netherlands is an international trader in seafood products, serving foodservice markets throughout Europe. Iceland is the leading supplier of cod while Germany dominates Dutch imports of pelagic fish.

Beef (beef and beef products)
There is not enough Dutch beef of high quality available. Ireland, Argentina, Brazil, Uruguay, and the USA all profit from this deficit. Germany and Belgium sell lower quality and price competitive beef.

Impact of the Ukraine Crisis

Trade Data Monitor reports that the Netherlands imported $2.3 billion of agricultural products from Ukraine in 2021, with sunflower oil/seed ($707 million), low erucic acid rapeseed or canola seed ($408 million), and rapeseed/canola oil ($84 million) leading the trade. For food manufacturers, the Ukraine is the leading supplier of sunflower oil. Many companies use sunflower oil in a wide range of products including baked products, baby food, and ready-to-eat meals, due to its unique taste and functional properties. At the same time, end-users are also direct buyers of bottled sunflower oil in the Netherlands.

With the exception of sunflower oil, the Federation of Dutch Food and Grocery Industry (FNLI) has stressed that there are currently no serious shortages of raw materials for food products in Europe and there are no indications to assume that empty shelves will arise in the short term. The impact of this hoarding is hopefully limited to the short term. If necessary, however, alternate supplies (e.g., other vegetable oils) are available for food manufacturers in the world market.

Product replacement and reformulation for food producers might be possible but requires testing and product label adjustments, costing both time and money. FNLI has asked the Ministry of Health, Welfare, and Sport to support a pragmatic approach to product labeling (e.g., not requiring immediate label replacements) if companies choose to reformulate products.

Dutch Traders are Key in Distributing Exports Throughout the EU

Although the Netherlands is a small country geographically, it is the perfect gateway for products into the EU due to the presence of the Port of Rotterdam, Amsterdam Schiphol Airport, the confluence of two European rivers and an excellent road and railway infrastructure. It is the largest importing country within the EU. The Netherlands also continues to be the second largest exporter of agricultural products in the world, after the United States and before Germany. These exports include agricultural products produced in the Netherlands and imported products that are re-exported after further processing.

The Dutch agricultural sector is diverse, covering a wide range of livestock and plant-cultivation sectors that include, for example, arable and dairy farming, greenhouse cultivation, tree growing and pig farming. In 2018, agriculture and related product exports from the Netherlands was an estimated $103 billion (€90.3 billion), up 0.2% from the previous year. Domestic production accounts for 72.4% of agricultural exports. Only an estimated 2% of Dutch agricultural exports are products that are directly re-exported after being imported.

RankTop Dutch Exports per Product Group, by value
1Flowers and Plants
2Meat
3Milk Dairy
4Vegetables
5Drinks
6Animal Feed
7Cocoa
8Fruit
9Fruit & Vegetable Preparations
10Grain & Dairy Preparations
Source : Central Bureau of Statistics, 2018

Route-to-market

Most people comfortably speak and write in English and have a high level of education (Masters or Bachelor’s degree). They are straightforward, open-minded, and like traveling internationally.

The Dutch are business-minded and like to be well-informed about the company they are about to do business with, the product in question, price, and future business opportunities. Doing business does not require ‘wining & dining.’ The Dutch preferably want to get the job done during regular business hours since a healthy ‘work-life’ balance is important to them.

Food retailers, foodservice companies, and wholesalers normally do not buy directly. Instead, they work with dedicated and highly specialized local traders. These traders look for long-term partnerships rather than a one-off business transaction.

Most Dutch food legislation is harmonized at the EU level. Where EU regulatory harmonization is not yet complete or absent, imported products must meet existing Dutch requirements.

Once the product has been chosen, be aware that the competition will be fierce.