Ecuador targets greater share of UK banana and tropicals market
ProEcuador claims the South American nation's growing conditions produce "better quality bananas”

Ecuador targets greater share of UK banana and tropicals market

Gill McShane

ProEcuador banana promotion at school children
The UK trade office is targeting children to raise the consumption of bananas

Ecuador may well be the world’s biggest banana exporter but its shipments to the UK pale in comparison. Produce Business UK talks to ProEcuador’s UK Trade Commissioner, Francisco Mena, to find out why, and how the Andean country is keen to ramp up its entire tropicals offer as South American cuisine continues to entice UK consumers

Ecuador exported more than US$2.6 billion (£1.7bn) worth of fresh bananas during 2014, of which the UK market represented US$62.7 million (£40.5m), according to figures from the Central Bank of Ecuador. “Ecuador is a traditional exporter of bananas, just not to the UK,” points out Mena. “We contribute over 25% of the world’s supply but less than 10% in terms of the UK’s imports.”

Mena says one of the reasons hampering the expansion of banana supplies from Ecuador to the UK is the low price offered by the UK’s retailers as a result of a long-running supermarket price war that from its outset has placed the banana category right on the front line of battle.

“UK retail prices are really quite low in comparison to other European countries and the US,” he explains. “The UK retail price is approximately £0.69 per kilogramme, which averages at roughly US$1.09. In Spain, France and Italy it’s much higher at US$1.3 or US$1.4/kg. That affects the volume Ecuador can supply to the UK because most growers are not willing to sacrifice their price.”

The UK is missing out

As a result, Mena says the UK is missing out on “a better quality banana” from Ecuador – a sentiment echoed by Ecuadorian banana and tropical fruit grower-exporter-importer BanaBay during an interview with Produce Business UK in February.

“Ecuador is recognised as the best producer in the world for products like roses, bananas and cocoa beans,” Mena claims, adding that it’s thanks to the country’s geographical location on the Equator, which provides the maximum intensity of the sun, coupled with mineral-rich volcanic soils.

“You can taste the difference in our bananas – they are more tender, they have a better colour and an more intense flavour. The same goes for our mangoes and other agricultural products. Our bananas and mangoes are not the same as what you’d get from other countries. I’m not just saying it!”

With Ecuador’s banana exports rising by more than 50% in volume and value during the first quarter of 2015, compared with the year-earlier period, Mena says ProEcuador as a whole is focused on diversifying its country’s export destinations.

More than just bananas

Within that objective, the UK arm of ProEcuador is keen to develop a bigger share of the UK market in particular, for both bananas and Ecuadorian tropicals as a whole. “The idea is to be more aggressive in our development of the UK market, which is why we exhibited at the London Produce Show and Conference 2015, as well as other events, to showcase not only bananas but pineapples, mangoes and papayas.”

But Mena admits there are some challenges with UK expansion. “We need to get more Ecuadorian producers certified as Fairtrade and organic suppliers because the trend in the UK is towards Fairtrade and organic products, especially in the banana category.

“Every year, Fairtrade-certified imports across all sectors are getting bigger, but it still accounts for less than 20% of the market in the UK. That said, Ecuadorian exporters won’t change to Fairtrade unless they see higher prices. They have to see a benefit.”

And, although Ecuador does already enjoy some presence in the UK with its fresh mangoes, papayas and pineapples, the volumes remain small to date. “Not too many people know about this [tropicals] offer [from Ecuador], but in the last few months the volume has been increasing as buyers recognise our quality,” Mena notes. “The idea is to grow this trade too. We want to show that Ecuador is not just about bananas.”

Indeed, Mena notes there is “huge potential” for Ecuadorian plantain too since consumption of the cooking banana is growing in the UK. “It’s being influenced by immigrants from Latin America, Spain, Italy, Africa and the Caribbean,” explains Mena. “But not too many Brits know about it. In Ecuadorian cuisine, plantain is one of the most important ingredients. But people need educating to know what it’s for, how to prepare it and that you don’t eat it raw.”

The pricing challenge

Consumer education notwithstanding, the low-prices in the UK market remain by far the biggest obstacle to increasing supplies, and with alternative markets ready to pay more, convincing growers is difficult, according to Mena.

“Exporters have to remember that they need an average price across all of their markets, including those that are high and those that are low,” he explains. “A low-priced market might give them volume, but they won’t get economies of scale.

“The exporters do realise this now after seeing what has happened in Russia with the import ban on certain sources. You can’t concentrate on one, two or three markets because sometimes crises happen in certain markets. You need diversification. Ecuador’s banana exporters need to diversify their offer and increase their supply to other markets like the UK, which is actually the largest banana importer in the EU.”

Why Ecuador?

Ecuador’s geographical location in the centre of the world provides the nation with certain competitive and comparative advantages, according to Mena. “Our location means we have the intensity of the sun and more hours of sunlight during the day, which improves the photosynthesis process,” he explains.

“Our volcanic soils contain lots of minerals, so they are really rich and fantastic for agriculture. We are a small country but we also have different altitudes for growing – we can plant anything! Our plants give us better products with a mix of certain quality characteristics. They have a stronger flavour, they’re more tender and have more colour than from other destinations.”

While all agricultural supply is subject to the weather, Mena points out that Ecuador enjoys a mild climate, which helps to mitigate some of the risk for buyers. “We’re not subjected to typhoons like Asia or tornadoes like the US or the Caribbean,” he explains. “We are exposed to El Niño but it doesn’t happen as frequently as other natural phenomena.”

Putting buyers in touch with suppliers

As a trade office, ProEcuador UK is keen to put Ecuador firmly on the radar of UK buyers, and identify business opportunities for Ecuadorian products in the island-nation, as well as raise awareness of the available investment potential for British companies.

To that end, the office organises promotional events such as business matchmaking meetings and product tastings, assists potential British investors, arranges business trips from and to Ecuador and provides market research and trade statistics.

Buyer visits to exporters are among its most popular activities, says Mena. “It’s the best approach,” he affirms. “The best way to understand what Ecuador does and offers is to go there and see the exporters. Part of what we do at ProEcuador UK is to arrange agendas for buyers to visit plantations (depending on the trade sector). Or, we bring potential exporters to visit potential buyers. We have found that those two methods are the most effective.”

During the first week of June the office took six UK importers from various food sectors to Ecuador to meet with potential exporters. Each buyer had 12-16 meetings over two days before visiting the plantations of those companies in which they were interested.

This year, the trade office is also planning an exporter mission to bring Ecuadorian suppliers to the UK during the third quarter. An agenda will be prepared to visit different buyers.

Alongside that, ProEcuador UK is looking for potential UK investors. “A couple of months ago a UK investor bought a cocoa plantation in Ecuador and now they want to buy land to build their own facilities,” Mena reveals. “ProEcuador helped them. We want to attract potential investors for fresh fruit too.”

Marketing Ecuador

To support the plan to boost exports to the UK, ProEcuador UK is planning some promotional activities this year. In 2014 the office organised a tasting at a kindergarten in Wimbledon, London, where Ecuadorian bananas were given away to children. To complement that, an Ecuadorian chef baked mini banana muffins at a Morrisons store in Wimbledon.

“This year we want to bring on board an Ecuadorian footballer who plays in the UK to target children through activities in October,” Mena reveals. “Parents are already sending their kids to school with bananas in their lunch boxes and the statistics show that bananas are a popular healthy snack. We want to promote more consumption among children since they are the consumers of both today and tomorrow.”

During the first week of July, Ecuador’s national ship – the Buque Escuela Guayas – will stop in Belfast, Ireland, where it will promote Ecuadorian cuisine and ingredients. “We’re inviting everyone from Ireland, the importers, investors, buyers and authorities, to come along and be exposed to our products,” Mena says.

For the last three to four years ProEcuador UK has also hosted a special annual event called Exquisite Ecuador to celebrate and promote Ecuadorian cuisine and its ingredients, including: bananas, plantain, mangoes, palm hearts, tuna, shellfish, quinoa, chia, coffee and cocoa.

“This year we will also host an interactive workshop with different food media players to show them how to prepare our cuisine,” Mena says. “They will then prepare their own dish – it’s a way of introducing Ecuadorian cuisine and ingredients step-by-step.”

With South American cuisine still riding a wave of success in the UK, London recently saw the opening of a new, authentic Ecuadorian restaurant called Tostado. Located in Soho, the restaurant, which is said to be the first Ecuadorian outlet of its kind, stays true to its roots by using the finest ingredients to showcase the country’s varied gastronomy.

Suppliers keen to break through

Tropicalfruit Export from Ecuador is currently looking for buyers in the UK for its conventional, organic and organic Fairtrade line of bananas, baby bananas, red bananas, and plantain which are grown by some of “the most advanced technological banana growers in Ecuador”.

The firm, which recently exhibited at the London Produce Show, already exports 150 containers per week to Germany (its biggest market), the Netherlands, France and New York. Through its clients Tropicalfruit’s offer finds its way onto shelves at Lidl, Aldi and Carrefour. The company directly supplies Superunie in the Netherlands.

“We are not currently exporting to the UK but we would love to because we consider it to be among the most serious markets,” explains Tropicalfruit’s director of logistic operations, Oswaldo Menéndez. “Serious markets are usually tougher and more demanding, but that’s within our comfort zone because we only like to work with structured businesses.”

Tropicalfruit considers itself to be a service company. “Our goal is to make life simpler for our customers,” Menéndez says. “We only sell in CIF terms (cost, insurance and freight) and we take responsibility for the fruit even after it leaves the ripening room. We assume any problem there might be and it’s always clear whose responsibility it is all the way through.”

To stand out further, Tropicalfruit is in the process of reducing its carbon footprint to zero in order to become a carbon neutral-certified company, in addition to its various other globally-recognised accreditations.

With so much quality produce on tap from Ecuador, Mena encourages any interested buyer to get in touch with his trade office. “We haven’t fully exploited the potential and advantages that Ecuador has to offer,” he concludes.

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