12-10-2011

A road map to the Swedish food market

Exporting food to foreign countries has never been a simple task. Shops and wholesalers often have well-established contacts with local producers who provide fresh products on a regular basis. Importing this kind of products is quite often seen as risky and therefore a question of thorough considerations, before decision on starting collaboration with a foreign partner is taken. Sweden is not an exception.

Last year this country imported products of total value over 109.5 billion EUR. Foodstuffs constituted 8.4 % of total import value in 2010. Nevertheless, the share of this type of products has a small but stable tendency to grow.

This is undeniably good news for the food exporters, but let's take a look at the composition of food import share.

In close collaboration with neighbors

Sweden has always been trading most with its neighbors, other Nordic countries such as Denmark and Norway. Also Europe in general and European Union in particular – with Germany as one of the leading actors – have traditionally been successful trade partners.

Two food product groups have been on the top of the list during the period of 2004-2010. The first one is fresh, chilled or frozen fish; the second one is alcoholic beverages. In both groups we can note remarkable growth of import amounts. Regarding sea-food it has more than tripled, while alcoholic beverages have almost doubled. Here we should take in consideration the global financial crisis, which appears to have hardly affected these imports at all. Only the alcoholic beverages have witnessed a slight downward trend in 2010.

The top importing countries to Sweden of food products match well the previously mentioned pattern of Sweden mostly importing from its closest neighbors. The only one sticking out is China, which has been number three exporting country of fresh, chilled or frozen fish in Sweden, after Norway and Denmark. For alcoholic beverages it has been France on the first place, followed by Italy and United Kingdom.

Baltic leader - Lithuania

In 2004 three Baltic countries joined EU and thus came into the close sphere to Sweden. However, new members have not got significant success as food exporters during their accession to EU.

Foodstuffs import value from Baltic States to Sweden in 2010:

• Lithuania – 37,598,000 EUR
• Estonia -25,670,600 EUR
• Latvia - 9,146,000 EUR

For the two top import products of Sweden - fish product group Estonia is on the 9th place, but the amount of imports in 2010 has actually decreased in comparison to 2004 (the decline is from 5,494,900 EUR to 3,729,500 EUR).

Latvia has been number 20th, and its imports appear to be hardly hit by the financial crisis (from 581,100 EUR in 2004 Latvia rose up to 1,469,300 in 2007, but declined to 665,600 EUR in 2010). For the alcoholic beverages product group we have only Latvia on the radar on the 30th place. The import of alcoholic beverages has increased from 131,100 EUR in 2005 to 480,200 EUR in 2010, but the amount is tiny, even if compared to Finland which has a position of 16th (12,814,600 in 2010).

The top food products groups exported from Baltics to Sweden are meat and edible meat offal with Lithuania at the forefront (6,725,700 EUR in 2010), edible vegetables and certain roots and tuber (Lithuania – 5,725,100 EUR, Latvia –1,800 EUR, Estonia –679,600 EUR in 2010), fish products with Estonia exporting the most, preparations of cereals, flour, starch or milk, pastry cooks' products and coffee, tea products.

Latvians export the most meat and fish products also beverages. While Estonians as mentioned before are the leaders in fish export, the second largest export from Estonia to Sweden is coffee, tea and species (2,320,200 EUR). Also Estonians export the largest part of dairy products among Baltics (Estonia - 436,900 EUR, Latvia –147,600 EUR, Lithuania –8,700 EUR).

Considering market peculiarities

If you are considering exporting similar products to Sweden, it is worth to note a few important peculiarities of their market. Cafeteria chains are keen to use fresh products, and many of them bake themselves. One should as well take into consideration the fact that Swedish companies are conservative and take their time when they consider new partnerships. Fast decisions are a rarity. Swedish companies prefer quality, even if it involves higher costs. At the same time Baltics are still considered to be "cheap", so one should try to strike a balance.

Fresh food becomes more and more popular

Increased consumption of fresh food among Swedes also should be taken into account, when considering food export. In the period of 2005 to 2010 the consumption of fresh food, which include fish, seafood, fruits, meat, nuts, pulses, starchy roots, sugar, sweeteners, vegetables have been constantly growing and reached to 2,2 million tones purchased in 2010. People purchase more chicken instead of red meat as they believe it is healthier; the increase in vegetarian meat substitutes is also reported in recent years.  
While we cannot speak about success in this field in general terms, there are examples of successful Baltic entry into Sweden's food market.

Case stories

GatewayBaltic helped two largest Latvian poultry meat producers to enter Swedish market by attracting potential partners – food importers and wholesalers and keeping regular communication with attracted partners in Sweden. As a result of five years of cooperation, companies have now regular sales of more than 100 t per month of the poultry products to Swedish market, which constitutes to 1% of total yearly consumption of the product, and 2% of import volumes. Having Latvia in a fifth place for poultry exporting country into Sweden.

Niche products also find their place in Swedish market as people are striving for specialty products.

Exclusive chocolate of Latvia - Emils Gustavs has been exporting to Sweden since 2009. Emils Gustavs received its first order in three months period from first meeting its Swedish partner and has together developed a number of new products. Now Emils Gustavs products can be purchased in small gourmet boutiques all over Sweden, as well as can be ordered from several leading online shops.

In 2010, of all imports in Sweden close to 70% came from EU countries. Due to increasing consumption of food products in Sweden and the capability of Baltic food producers, there are possibilities to increase Baltic's share in Swedish import market. After all, Baltic countries should be counted as close neighbors of Sweden, just as Denmark and Norway.

Author: Didzis Melbiksis - Project consultant, GatewayBaltic