Exporting to France: Seminar – “How to sell in France”
On 12th April, ITC took part in in a seminar: FRENCH BREAKFAST, HOW TO SELL IN THE FRENCH MARKET”. The round table was organised by SECARTYS, the Spanish Association for the internationalisation and innovation of the Spanish Electronics, Information Technology, Telecommunications, Software, Electronic Games and Entertainment Industries.
Several experts took part in the seminar, amongst them Ms Júlia Farré, an expert in internationalisation and managing consultant in ITC. She provided attendees with detailed information on internationalisation processes in France, this included keys to resolving problems that can arise in these projects as well as on the aid available, useful platforms and practical examples of success and failure.
The seminar was a great success as witnessed by the large number of participants who shared experiences and posed questions which were answered by the assembled experts. What shouldn’t we do in France? What are agents/distributors in France looking for? How is France so competitive? Is French really an important language?
The Renewal of the French Textile Industry – Technical Textiles
The French textile, clothing and accessories industries have traditionally been the preserve of small and medium sized companies. Historically, they have always played an important role in the industrial revolutions of the XIX and XX centuries. Nowadays, however, the industry is undergoing a Europe-wide decline. Production in low-cost economies means that the industry has experienced radical changes: production has given way to design, innovation, personalisation and sales. The industry now needs skilled employees able to adapt quickly to new means of production and their processes and to design ever more technically sophisticated products.
Despite the difficulties being faced by the industry, France still ranks third in Europe behind Italy and Germany with total sales representing 12% and employing 10% of the workforce. Fashion, luxury goods, technology and sustainable development are the cornerstones of what is now referred to as the creative industry.
French industry is now concentrated on innovative and high value-added products such as technical textiles which now represent some 15% of the market. Fibre innovation has played an important role in this development, especially in linen in which France now manufactures 70% of the European production.
In the strictly technical field, France is now the second largest European producer of geosynthetics and is leader in agro-industrial investigation. The textile industry is concentrated in: Nord-Pas-de-Calais and Rhône-Alpesregions which account for 46% of employment in the industry. Other important centres are to be found in Champagne-Ardenne, Alsace, Lorraine, Picardy, Midi-Pyrénés and l’Île de France.
The industry is represented by a large number of organisations including: L’Institut Français de la Mode (IFM); Union Française des Industries de l’Habillement (UFIH); La Fédération de la Maille, l’Institut Français du Textile et de l’Habillement (IFTH); Comité de Développement et de Promotion de l’Habillement (DEFI) which is a cluster that is proving vital in the building of networks, sharing common experiences and forging alliances.
Another noteworthy factor that is maintaining a vibrant textile industry in France is the number of exhibitions and shows which are held in the country in cities such as Paris, Lyon and Lille in which international exhibitions cover all aspects of the `production cycle and which are also to be found in Japan, the States and, even, China.
The workforce is far more “feminine” than the norm in manufacturing; 48% compared to 28%, though this is more evident in the traditional industry than the technical side of the business; 44% compared to 39%. Even given the predominance of women, only one third of them receive any training and they are paid far less than equally qualified men. Although this is true of all manufacturing, it is especially prevalent in the textile industry where women are only paid 70% that of their male equivalents.
Average ages in the industry are relatively high and the number of over-forties is growing whilst that of the under-thirties is diminishing. However, worker turnover is low. Workers tend to stay in the same company for a long time (one in two more than 10 years) though there is very little job mobility within companies.
The definition of technical textiles as given by the Dirección General de l Empresa is: those materials or textiles in which their technical or functional performance are considered more important than aesthetic or decorative considerations. Thus the feature that distinguishes the sector from the traditional textile industry is that it provides new and innovative solutions to other sectors such as medicine, transport, the rapidly growing world market for geotextiles, construction and the environment.
Some examples of markets and applications:
Agrotech – Agriculture, Aquaculture, Horticulture, Silviculture
Buildtech – Building and Construction+Clothtech – Technical components and materials for clothing and footwear.+
Geotech – Geotextiles for public works and gardens.
Hometech – Technical components and materials for furniture, home fittings, and floor coverings.
Indutech – Filters, transport, cleaning and other industrial uses.
Meditech – Hygiene and medicine.
Mobiletech – Automotive industry, transport, railways and aero-spatial applications.
Ecotech – Environmental protection
Packtech – Packaging.
Protech – Personal and property protection.
Sporttech – Sports and leisure.
Continued growth in the technical textiles industry depends on continued investigation and the application of results to practical purposes and the continuing search for sustainable growth.
When launching new products there are several fundamental differences between the traditional and technical industries. At the heart of the former are the producers who create demand by supplying consumers with new fashions and accessories. On the other hand, the market for technical textiles is driven by their performing to the specifications of the job at hand and their design, purchase and use is dependent on satisfying this need. It is the market not the supplier that creates demand.
In Europe there are 4 main consumers who account for about 50% of demand: Germany (14%); France (12%); United Kingdom (10%) and Italy (9%).
In 2004, the three main European organisations involved in the investigation and development of textiles (Euratex, Textranet and AUTEX) created the European Technology Platform for the Future of Textiles and Clothing in Europe. Their sights were set on three main building blocks: consideration, proposal and action:
- Greater emphasis on creating technically sophisticated products
- Increased R&D in the field of industrial textiles
- Replacing mass-market production with an increase in manufacture of bespoke products.
Data taken from a study carried out for: Fashion.net; ORT France; Education and Training and Leonardo da Vinci Programme for Education and Culture.
The Market for Hams and Cold-meats in France
France is one of the largest consumers in the world of cold-meats and hams, with a well established industry and knowledgeable demanding customers. However, it is also a market in which Iberian Ham has a very large potential for growth. As with all mature markets, entry barriers are high and it is essential to offer a well-presented, top quality product to have any chance of reaching the consumer and to makes ones place amongst the myriad offerings from home and abroad.
French distributors are well appreciative of the taste of Spanish ham (noisette- hazel nut) the low salt content and smooth texture, in summary; a well-cured low-fat ham. There is both a very good value for money and a consistency and regularity of quality. French distributors re use to handling ham in wholes or parts, always boned.
The Perception of Spanish Hams and Cold-meats
Spanish produce, and especially Serrano ham, are becoming ever more popular on the market that is learning to appreciate their quality. However, it is essential to maintain this quality and the perception of it being a premium product. Nevertheless, we once again have to stress the market maturity and the consequent difficulty of displacing a competitor and not filling a gap. You are going to have to work hard to position the product at exactly the right price level, assure an attractive and/or innovative packaging when trying to seduce buyers.
The excellent results obtained by Serrano ham are a high point of this progress, with a 0’7% increase in sales and 0’6% in value in 2013 following on from excellent results in previous years. This is especially notable when talking of Iberian Ham which increased by 17’2% by value and 7’8% in volume.
There is a very noticeable improvement in the perception of the quality of Spanish cold-meat produce and, in particular, of Serrano ham among French distributors and professionals as well as increasing public awareness. The challenge that now has to be faced up to is that of communicating directly with the consumer through advertising campaigns, POS tastings, etc.
Following are a few salient points:
- Ham made from acorn-fed Iberian pigs. (This is the only type to be found in gourmet outlets) is, by reason of price and extremely high quality, to be found at the very top of the range of produce and is very different from the Serrano ham made from standard pigs and not acorn-fed.
- It is absolutely essential to maintain the very clear distinction between Iberian and Serrano hams which are a totally different product and in no way competition as they are aimed at different consumers.
- Consequently, the strategies to be used by Iberian and Serrano in the market have to be altogether different for reasons of having two distinct markets. Serrano ham should be sold by emphasising its excellent value for money and quality compared with similar products on the market. Whereas, Iberian ham has to promoted amongst the very highest gourmet products comparable to champagne and caviare, for example.
- The experience of Spanish exporters is that it is a “difficult” market, but promising. A market in which there is much to be learnt.
Cold-meat counters are very rapidly becoming if they are not already, to all intents and purposes, a things of the past. The vast majority of ham is sold in pre-packed lots. Both the long queues and short shelf-life of cut meats are some of the reasons that have contributed to their demise. Price control is another reason for the preference for pre-packed packets at the supermarket and simple-to-check pricing.
Consequently, many producers of high quality products have opted for joining the pre-packed train – considered to be practical, modern and safe. The producersare also rather sceptical of the cut-meat outlets to handle the product correctly. Another factor that goes a long way to explaining the decline of fresh-cut cold-meats is the cost benefit ratio. Hand-cut produce customer by customer is a very labour intensive practise reducing it to the very highest levels.
That is not to say that, at the top of the market, the advice and expertise of the shopkeeper or sales staff is not sought after.
Within the French cold-meat sector there is a natural “structural” tendency to move up-market. One example of this would be the “chorizo” that is moving on from being a cold-meat for the occasional snack or “tapa” to enter into the pages of the French cooking books and into the mainstream of their cuisine.
Of the principal Spanish produce, the following are making great headway on the French market:
- El Salchichón (similar to salami) is a typical French product and there are many regional varieties.
- El Chorizo – still considered a slightly exotic product by French consumers, but in the last 5 years this is changing rapidly.
- There are a number of more local products such as sobrassada from Mallorca, jerky and fuet are still looking for their niche in the market, but have great potential there as they have no local equivalent. However, this will mean a great investment in educating the French consumers.
Competition on the French Market
- Bayonne Ham (Jambon de Bayonne) – This is the most popular in France and was awarded the Protected Geographical Indication (PGI) in 1998 and is cured for a minimum of 7 months. It is almost always sold sliced and you will very rarely see whole hams as in Spain. The market leaders are the large national groups to be found in the the Grand Adour: Delpeyrat (owner of the trade marks Montagne Noire and Maison Chevalier), Aoste, Salaisons Pyrénéennes, Michel Dupuy, Charcuteria Bordelaise, Grand Adour and the craft producer Montauzer.
- Ardennes Ham – with PGI.
- Parma Ham. Which is probably the greatest competitor of Serrano on the French market. Since 2009 it is this ham together with Parma, that have taken first place from those of Bayonne and Savoy. France is Italy’s second customers for Parma ham.
The Import of Cured Ham
Despite a little dip in 2010, there has been a constant increase in the import of cured ham in France. Increasing from € 155 million in 2009 to €196 million in 2013. Italy in undisputed leader with sales of € 85 million; whilst Spain has grown from € 36 million in 2009 to € 55 million iin 2013. This notable growth of almost 50% in just 5 years has meant that Spain has nudged Germany down one place to become the second supplier.
The two best known foreign denominations of cured hams in France are Parma and Serrano. Not taking into account the hams without origin, by the end of 2013, it was third in sales in French supermarkets after Aoste and Bayonne. Serrano is sold at a discount compared to local hams: €22’5/Kg for Serrano and €29 for Aoste and €27 for Bayonne and about the same price as generic Italian ham which retails at €22.
Iberian Ham is going full-steam ahead with very large percentile increases in volume and is consolidating its position as a gourmet product with prices of round €70/Kg. Lastly ham from Teruel has made small inroads into the market at prices of about €60.
There are two very distinct markets: about 15% is represented by the Delis and specialised gourmet outlets; the other s the mass market. However, the supermarkets (85% of the market) are being to expand their “gourmet sections” which keeps them amongst the consumers’ favourites as they can up their game without changing shops. Another outlet that is gaining ground is that of internet sales.
The increasing interest in gourmet products had been detected by the organiser of SIAL (Salon Internationale de l’Agroalimentaire) and led them to organise the specialised gourmet event in 2009: Gourmet Food & Wine Selection. The SIAL and Gourmet event are held on alternating years. The “Club del Gourmet” in Madrid is a much smaller and modest event.
From our own experience and the results of market studies, the way forward for Spanish producers of Iberian Ham is very clear, especially taking into consideration that the majority are small and medium sized producers, is very clear: that of importers of Spanish produce both for consumers and HORECA, and gourmet wholesalers. See “Recommendation” for further details.
We would highly recommend working with wholesalers specialising in the distribution of cold-meats, the vast majority of which are rationalised organisations delivering to gourmet delis and butchers, restaurants and collectives. Some of these are to be found in the large wholesale markets like Rungis on the outskirts of Paris. The larger of these companies do, of course, also supply the large chains and supermarkets without excluding the more traditional outlets. Sales to HIRECA is still fairly limited hen compared to consumer outlet.
The most popular formats Spanish producers of cured ham are asked for are: boned parts or wholes; whole hams on the bone, with “V” cut; or centres.
It is essential to offer value for money for Serrano, in common with other Spanish meat produce, as they have to find their place in the niche for “quality and reasonable prices”. We feel it would be a mistaken policy to apply higher wholesale prices than those in Spain for produce destined to the traditional market as the distributor will work harder for those products with the best advertising and promotional budgets: tastings, publicity, etc.
The following are possible contacts on the French market:
- Comptoir France Europe
- Guasch et fils
- Le Delas S.A.
- Groupe Paste
Fairs of Interest
SIAL– Salon International de l’Agroalimentaire www.sialparis.fr
Salon International de l’Agriculture,http://www.salon-agriculture.com/
El mercado de embutidos y jamones en Francia, ICEX, Mayo 2014
El mercado de productos gourmet en Francia, ICEX, Octubre 2014
All used to back up the more than 20 years experience ITC has had in supporting and advising Small and Medium sized companies.
Sales Management Programme in France
Once again, International Team Consulting and CECOT, the Employers’ Association, offer the Programme, France à la Carte, for those companies that require an intensive course in Sales Management in France. The aim of the programme is to provide support to SME sales departments. The programme was presented within the framework of an event to enhance sales in the French market.
The meeting took place on 23rd January at the CECOT HQ and, under the leadership of Júlia Farré – Consulting Partner in ITC, a number of companies took a very active part in explaining their experiences in the market. The workshop proved t be very informative and enriching one in which each of the firms shared their own experiences and were able to evaluate the different strategies and paths taken by the various companies.
Designed by CECOT and International Team Consulting, France à la Carte is a year-long programme that includes intensive day-to-day sales management and market research together with training and guidance. Asun Cirera, Director for International Trade at CECOT, declared: “Our aim was to offer an eminently practical programme that would help SMEs to achieve their short and medium term goals. Results are obtained more quickly as the projects are carried out under the weekly guidance of professionals with many years of practical experience in sales management and organising sales networks in France”.
For further information on how our programmes can help you, please contact: