The market for tomato sauces has been stable since 2005. To avoid stagnation and a tendency to losing market, manufacturers have been searching for added value this includes guaranteeing a product with no preservatives, not genetically modified or free fro added colourants. France and the world sees new recopies for tomato sauce every year. It is worth mentioning that the market is tending towards both original recipes and modernisation. This is highlighted by consumers looking for more genuine products and gourmet produce, whilst not forgetting the growing market for healthy/nutritive food, diet recipes bio produce and organics.
Tendencies and Development of the French Market
In the period 2014/2014 the market for dressings and condiment grew by 0’8%in volume and 4’3% in value. The market for cold dressings in France grew by 5’1% comparing 2013 to 2014 a reached a total of €415 million.
The big classics (mayonnaise and ketchup) represent 36% and 28% of the market. Sauces are becoming ever more sophisticated with a market developing for “varied dressings” such as kebab sauce, BBQ dressing or Japanese sauces which all grew by 5’1%in value and 9’5% in volume in 2013.
The cold sauce market for 2013/2014 was:
|Market Share € mill||Variation 2013/14|
*Source LSA 6thFeb. 2014
As far as hot sauces are concerned, the market leader is, by far, tomato sauces in 2012. with a total value of € 324 million. Every year the French consume 100,000 tons of tomato sauce which is about 3’2 Kg per second with Bolognese sauce leading the field.
France imports a great part of their ketchup and tomato sauce with45% coming from Spain and 20% from Italy according to figures published in 2013.
The is a noticeable growth and buoyancy in the cold sauces sector due to the increase in the frequency of purchase, the incorporation of new consumers and reasons of taste.
Structure of the Industry in France
The market breakdown for seasoned sauces are BOB 38% (MDD in Spanish) French produce 33%, hard discount 13%, catering 12% and premium BOB 4%.
There are 3 leading French producers selling with their own brand: Panzani (42’6%); Barilla with 14’1% and Sacla with 8’8%, the rest of the market consists of numerous smaller companies.
Wholesale and Centralised Purchasing Offices
Currently food distribution is dominated by the large outlets (superstores and supermarkets)
and, to a lesser extent by the hard discounters.
Thus food distribution in France is concentrated in 7 large groups: Carrefour; Auchan; Casino; Intermarché; Système U and Cora. An important point is the growing share taken by the German hard discount stores: Lidl, Aldi and Norma.
Centralised Purchasing Offices and specialised food wholesalers also play a relevant role in the distribution of food in France. Their main function is that of studying the market and products, finding the suppliers and negotiating purchasing agreements. In France there is a Central Purchasing Offices which supply supermarkets on a regional basis which means that different stores may be being supplied by the same regional central.
Each wholesaler negotiates the supply of all or part of an outlets requirement and may be working for several chains at the same time. Although each chin and wholesaler’s method of working may vary slightly, in general it takes the form of three stages: acceptance of a supplier; in the French Market the product and placing the order. Generally payment terms are 60 days, longer than in the UK or Germany but shorter that in Italy and Spain.
Possible Barriers to Entry in the French Market
Whilst membership of the European Union means that, as such, there are no barriers to exporting to France (quotas, tariffs, etc.). Nevertheless, there are a number of peculiarities in the market that may cause problems to Spanish firms wishing to sell in France.
The main points or barriers to be taken into consideration are:
- The difficulty of dislodging current suppliers
- The strictness in complying with the requirements of the market.
- The use of the methods of payment most common in France: cheque for national business and bank transfer at 60 days for international deals.
- The use of French for communication. This may seem obvious, but the use of French in negotiations and for communications gives one a considerable advantage.
- Literature and catalogues in French.
- French Purchasing Managers are very highly knowledgeable and have a very good idea of new trends and what is happening both at home and abroad.
- Making sure that logistics are well planned.
- Identify and fill market niches: the French market is, as can be imagined, a very mature and saturated one; which means there is great competition when trying to sell ready meals in France.
We recommend you keeping these points in mind when planning your strategy for the French market.
France is a pioneer in the use of BOB (white labels) (MDD in its French initial) and, very often a foreign company will find this an easier channel to break into the market. Obviously, the Spanish company will be expected to comply with all existing requirements and to fulfil the legislative requisites, and adjusting ingredients and packaging to the customer’s needs. However, entry through this channel means considerable savings in marketing and advertising which are, logically, borne by the client.
As far as packaging is concerned, it must be remembered that not only should this be in French and comply with EU rules, but must also comply with the very strict French legislation on the language (Toubon Law).
Fabrication de condiments et assaisonnements, Panorama des industries agroalimentaires, ed. 2014.
Les condiments & assaisonnements, Master Agroalimentaire Régional 2010/11, Univ. De Lille.