Netherlands Country Profile

Market Overview:

According to Euromonitor the Netherlands' economy strengthened in 2017. Private consumption saw only modest gains but exports rebounded briskly. Growth in disposable incomes and the continuing rise in house prices boosted net wealth of households. The real estate market drives investment. Britain’s withdrawal from the EU or “Brexit” is a risk due to the close trade links with the U.K. Growth of real Gross Domestic Product (real GDP) will gradually decelerate, dropping to around 1.3% per year by 2025.

  • The Netherlands' real GDP grew by 3.2% in 2017 - up from 2.2% in 2016
  • The real value of private final consumption rose by 2.1% in 2016 and the same rate of growth was expected in 2017
  • A rise in house prices supports consumer spending (via a wealth effect)
  • A fall in unemployment also benefits consumers
  • High levels of household debt are a drag.
  • Unemployment was 6% in 2016 and it will fall to 5% in 2017
  • Both real wages and employment have begun to rise after several years of subdued growth
  • The economy's performance will fall below trend rates over the next few years.
  • Growth of real GDP will gradually decelerate, dropping to around 1.3% per year by 2025

The Dutch economy depends crucially on foreign trade. Rotterdam is Europe’s largest port, handling more than twice as much cargo as its nearest European rival, Antwerp. The port’s industrial and distribution activities generate annual added value equivalent to around 10% of Dutch GDP. There are also a large number of coastal and international vessels providing cargo services and an important ship servicing facilities.

The Netherlands is the largest market for U.S. exports of consumer ready food products in all of Europe and the 8th largest export market in the world. U.S. exports of consumer ready food products totaled US$1.2 billion in 2017, growth of 4%. The Netherlands are the 2nd largest U.S. processed food export market in the EU-28 after the U.K. and the 9th largest overall, totaling just over US$1 billion for the first time in 2017, also growth of 4% from the prior year. Top processed U.S. food products exported to the Netherlands in 2017 included:

  • Food preparations
  • Fats and oils
  • Non-alcoholic beverages
  • Processed fruit
  • Processed vegetables and pulses
  • Prepared/preserved seafood
  • Distilled spirits and other alcoholic beverages
  • Beer and wine
  • Snack foods
  • Chocolate and confectionery

Advantages for U.S. exports of food products include product strengths and market opportunities:

  • Affluent, curious, open-minded while at the same time price-conscious consumers
  • Growing demand for convenience, and single-portion packaged food products
  • Traders and food processors have a favorable image of U.S. products
  • Growing demand for organic food products, sustainable production methods and food products with clean ingredients
  • The Netherlands is the most important gateway for U.S. consumer-oriented and seafood products to the EU
  • Growing demand for new products, innovative food concepts and international cuisine
  • Growing demand for functional, fresh and processed food products that contribute to a healthier lifestyle

Challenges for U.S. exporters of food products include product weakness and competitive threats:

  • Transatlantic transportation is costly and takes time, three to five weeks
  • Fierce competition on price, quality, unique-ness and innovation
  • Sustainability standards are increasingly becoming a requirement of the Dutch food retail industry
  • Profit margins on food are thin while the margins on beverages (including wines and beer) are higher
  • Suppliers from other EU MS have a competitive advantage on tariffs and non-tariff trade barriers, transportation costs and transportation time
  • Non-NHTC beef, poultry, shellfish and products containing GMO derived ingredients that are not EU approved cannot be exported to the Netherlands
  • The EU has several Free Trade Agreements which may advantage other 3rd country competitors 

Retail Sector:

Euromonitor reports that the packaged food retail sales value reached US$18.8 billion in 2017. That represented a growth of 1.9% or over US$355.8 million since 2013. They also predict growth of 7% by 2022, amounting to US$1.3 billion for a total packaged food value of nearly US$20.4 billion. High growth categories in the forecast include:

  • Processed fruit and vegetables
  • Baked goods
  • Breakfast cereals
  • Ice cream and frozen desserts
  • Savory snacks
  • Sauces, dressings and condiments
  • Rice pasta and noodles
  • Soups
  • Ready meals

USDA’s Foreign Agricultural Service (FAS), Office of Agricultural Affairs or “OAA”, located in The Hague, hereinafter referred to as “Post” reports that the Dutch retail sector is characterized by heavy consolidation, the top two retailers control over 50% of the market, and a large number of smaller neighborhood stores. Consumers are increasingly looking for sustainable products, products that are healthy and convenience products. The Dutch continue to buy more groceries online and private label brands. Borders between new food retail formats and innovative foodservice concepts are beginning to blur.

In 2016, the turnover of the Dutch food retail industry totaled $43.1 billion. For 2017, turnover is expected to increase further due to the improving economy in the Netherlands and greater confidence in the economy among consumers.

There are roughly 4,300 food retail outlets in the Netherlands providing over 260,000 jobs. Around 80% of all food retail outlets are full service supermarkets, operating on floor space between 500 and 1,500 square meters located downtown and in residential areas. Retailers with full service supermarkets have responded to the need of the Dutch to have these supermarkets close to their homes. The remaining 20% includes mainly convenience stores (near office buildings, city center, motorways and train/metro stations), some wholesalers and just a few superstores (conveniently located in shopping malls and industrial parks).

The top two food retailer formulas in the Netherlands, Albert Heijn and Jumbo, have a market share of 54%. The market of German discounters Aldi and Lidl combined has increased to 17%. Independent food retail stores are increasingly leaving the scene. Shrinking margins and on-going consolidation in the retail market drive this trend. The average Dutch supermarket offers the following products from the U.S.:

  • Wine
  • Confectionary
  • Tree nuts
  • Cranberries
  • Sweet potatoes
  • Sauces
  • Pulses

Post reports that during the last decade, Dutch food retailers have increasingly sourced food products which are either produced sustainably or obtained in a sustainable manner. Wageningen University and Research publishes annually the “Monitor Duurzaam Voedsel” report which gives an overview of consumer spending on sustainable food in the Netherlands. Total consumer spending on foods certified as sustainable grew by 26% in 2016 to over US$4.2 billion. The share of sustainable food compared to total spending on food grew from 8% in 2015 to 10% in 2016. Sustainable food continues to be the most important growth market in the Dutch food industry. The consumption of certified sustainable products is expected to continue to increase. A wider range of certified products and changing consumer preferences by paying more attention to sustainability and health, explains the growth in spending on these products. Most of the spending takes place in the supermarket, mainly due to wider availability of sustainable products.

Post also tells us that the market share for private label products continues to increase in most European markets. The largest market shares are to be found in the Western European countries, led by Spain (52%), the U.K. (46%) and Germany (45%). The Netherlands had a market share of 30%. The market share of private label is high in retail markets that are highly consolidated and innovative. Several retailers in the Netherlands market have developed two private labels; one focusing on price whereas the other is aiming at adding value. Consumers are discovering the good value for money that private label brands are offering; they can be a good alternative for A-branded products.

Especially in the cities, consumers are shopping at different times and locations. Breakfast is often bought on the way to work. During lunch breaks, people decide what they like to eat for lunch and buy it on the spot. Dinner is increasingly bought on the way to home. As a result innovative convenience stores, either small independent or part of a larger chain, are opened near metro/train stations, schools, office buildings and shopping malls. The traditional neighborhood grocery stores are, in order to survive, offering more and more meal components and ready-to-eat meals. Consumers request regional cuisine products (Asian, Italian, Tex-Mex, etc.) and overall tasty and fresh food. These new convenience stores are in fact not so much competing with traditional supermarkets but more so with foodservice concepts.

Best Product Prospects:

Post reports U.S. products present in the market that have good sales potential include:

  • Nuts (almonds, peanuts walnuts, pistachios, pecan and hazelnuts)
  • Fruit juices (orange and grapefruit)
  • Beverages
  • (Super) Fruits containing high levels of antioxidants like pomegranates, all berries, etc.
  • Craft beers
  • Dried fruits (dates, figs, cranberries, raisins)

They add that products not present in significant quantities but which have good sales potential include:

  • Functional/health foods
  • High value organic products
  • High value beef cuts and hamburgers (Non-Hormone Treated Cattle Program)
  • Innovative sauces, condiments and confectionary products

Food Service Sector:

Post reports that the Dutch foodservice industry is expected to grow annually by 4% due to a recovering economy and changing consumer eating culture. The growing segments within the foodservice industry are specialist coffee shops, 100% home delivery/takeaway, juice/smoothie bars and food trucks. Young consumers are increasingly looking for new and convenient food solutions. U.S. food products that are convenient, healthy, tasty, organic or nutritious have the best sales potential on the Dutch market.

The Dutch foodservice industry is composed of the following six sub-sectors: full-service restaurants, fast food outlets, cafés/bars, self-service cafeterias, 100% home delivery/takeaway, and street stalls/kiosks.

  • In 2016, total sales of food product and beverages in the Netherlands were valued at roughly US$561 billion
  • Food retailers were responsible for three quarter of those sales while the foodservice industry accounted for the remaining, or US$13.3 billion
  • Restaurants, fast food outlets and cafés/bars were the three largest sub-sectors
  • In 2016 their combined sales totaled US$11.8 billion, or almost 90% of total foodservice sales.

Post reports that after several difficult years due to the financial crisis, the Dutch foodservice industry is now in better shape. The economy is recovering and consumer confidence and disposable income levels are growing. Last year, the foodservice sector grew for the third year in a row (4%). The increase was in line with the rise in spending per transaction as well as the increase in the number of transactions, confirming that the average Dutch consumer is eating out more frequently again.

The vast majority of fresh and processed food products destined for the Foodservice industry fall in the consumer-oriented and fish and seafood products category. The Netherlands is the largest market within the EU for these products from the U.S. The U.S. is the 6th largest supplier of consumer-oriented products to the Netherlands after Germany, Belgium, Brazil, France and Spain.

The overall Dutch foodservice industry is highly fragmented and characterized by independent entrepreneurs. This is especially the case for cafés/bars, restaurants, cafeterias and street stalls/kiosks. The majority of fast food outlets on the other hand are not fragmented as they are often part of a chain. Well-known examples of chained fast food outlets in the Netherlands are McDonalds, Burger King, KFC, Délifrance and Bakker Bart, together responsible for 60% of the fast food market. Also 100% delivery/takeaway outlets are often part of a larger chain. Domino’s Pizza, New York Pizza and Spare Rib Express are all active on the Dutch market.

Post reports that products that meet the following criteria, in addition to a competitive price, have the best prospect to be sold on the Dutch market:

  • Unique and innovative products (taste, packaging, size);
  • Products not sufficiently available in the Dutch market;
  • Products present in the market which have good sales potential:

  • Nuts: almonds, peanuts, pistachios, walnuts, hazelnuts, pecans;
  • Seafood: salmon cod, halibut, scallops, lobster;
  • Fresh fruit and vegetables: sweet potatoes, cranberries;
  • Sauces and condiments;
  • California wines

Products not present in significant quantities, but which have good sales potential:

  • Pulses: dried peas, beans, chickpeas and lentils;
  • Sweet corn;
  • Micro breweries’ beers;
  • Wines from other States

Food-Processing Sector:

Post reports that the Dutch food processing sector generated a turnover of US$82.5 billion in 2016 and demonstrated the highest production growth in five years, supported by growing demand from mainly Germany, Belgium, France and the U.K.

  • Growing exports are also the main driver behind Dutch imports
  • Dutch food companies have been working closely together to ensure their products are safe and competitive and more recently that they are also healthy, nutritious and sustainable in order to meet consumer demand
  • Despite fierce competition from suppliers in other European Union member states and other countries, Dutch food companies are always on the lookout for food ingredients from the United States that might give them a competitive advantage

There are 5,890 food companies in the Netherlands, ranging from large multinationals to small & medium sized companies. Last year the total number of food companies increased by over 3%. Striking is the growth of small businesses (employing less than 10 employees), a trend that has been around for five years. The food industry employs approximately 136,000 people, or 6% of total employment in the Netherlands.

The Dutch food industry is going well. According to the Dutch Food Industry Federation (FNLI) the sector generated a turnover of US$82.5 billion last year and accounts for almost 5% of Dutch GDP. The subsectors of meat, dairy and fresh produce each account for roughly a quarter of the industry’s turnover. With an increase of 5%, the food industry demonstrated the highest production growth in five years. The industry’s exports grew last year by over 12% and were valued at US$46.8 billion. In the same year imports totaled US$22.8 billion, 9% higher than the previous year. As a result, the industry’s trade surplus grew by 15% to US$24 billion. About 80% of Dutch exports go to other European Union (EU) member states, especially to neighboring countries. Although there continue to be growth opportunities in Europe, discovering and developing markets outside the EU is fundamental for the future of the Dutch food industry.

The Dutch food processing industry is mature, well organized and has access to any food ingredient imaginable. In order to be successful on the Dutch market, U.S. food ingredients must have a competitive advantage, for instance on:

  • Price
  • Quality
  • Volume
  • Variety
  • Size
  • (seasonal) availability
  • Packaging
  • Special certification (organic, sustainable), etc.

Best Product Prospects:

Post reports that food ingredients present in the market which have good sales potential include:

  • Nuts (almonds, peanuts, pistachios, walnuts, hazelnuts and pecans)
  • Highly processed ingredients (dextrins, peptones, enzymes, lecithins and protein concentrates)
  • Fish fillets (frozen fillets of Alaska Pollack, cod and hake)
  • (fresh and processed) fruit and vegetables (cranberries, sweet potatoes, grapefruit, asparagus and mangoes)

Food ingredients not present in significant quantities, but which have good sales potential include:

  • Ingredients for natural and healthy food stuffs
  • Bakery products
  • Dairy products (whey, milk powder)
  • Specialty grains (millet, spelt and meslin)
  • Pulses
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