eMarke t Se rv i c es makes i t ea s i e r f o r you to u se e lect ron ic marketp laces for in ternat iona l bus iness
FOOD AND BEVERAGE
Report By Letizia Gallacci (ICE), eMarket Services Italy
www.emarketservices.com August 2005
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Abstract The Food and Beverages sector is one of the most important industries in the world economy. It is worth approximately US 4.22 billion and employs about 4.4 million people working in Europe Union alone. The bipolar structure of the sector is composed of large multinationals on the one hand and a mass of small and medium companies on the other. The diffusion of ICT solutions and e-commerce is less pervasive than in other sectors, but this is expected to change in the near future as e-commerce provides producers of niche products a way to meet global requests and reach new foreign markets.
Contents 1. Industry definition and characteristics
1.1. Definition of the Food and Beverages industry
1.2. Industry characteristics and trends
2. Food and Beverages Industry e-business
2.1. Introduction. Diffusion of ICT in the industry
2.2. Statistical usage estimates for e-commerce tools and new technologies
2.3. Prospects and challenges of e-commerce tools adoption and usage within the industry
3. Food and Beverages industry e-marketplaces
3.1. Geographic distribution and focus
3.2. Product and client profiles
3.3. Industry e-marketplace directory
3.4. Significant electronic marketplaces in the industry
4. Sources and References
1. Industry definition and characteristics
1.1. Definition of the industry According to NACE, the classification of economic activities in the European Community, the food and beverages sector includes;
Manufacture of food products and beverages Manufacture of tobacco products
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Food and beverages are further subdivided into nine groups covering meat, fish, fruit and vegetables, fats, dairy products, grain mill, starch products and prepared animal feeds.
1.2. Industry characteristics and trends In 2004, the global Food and Beverage industry was valued at US 422 billion dollars.
The European Union is the world's largest producer of food and beverages with Food representing more than 75% of the value of the sector, beverages accounting for 15%, and Tobacco 8%.
The European food and beverage industry transforms more than 70% of the agricultural raw produce in the EU and employs 4.4 million people.
WORLD'S EXPORT OF GOODS
1997 1998 1999 2000 2001 2002 2003 2004
World's Exports of goods (billion $)
5.310 5.273 5.475 6.153 5.918 6.156 7.170 8.631
% change - -0,7 3,8 12,4 -3,8 4,0 16,5 20,4
FOOD, BEVERAGES AND TOBACCO INDUSTRY
1997 1998 1999 2000 2001 2002 2003 2004
World's Exports of the sector(million $)
314.358 308.336 298.376 291.832 302.532 320.097 376.406 421.783
% change n.d. -1,92 -3,23 -2,19 3,67 5,81 17,59 12,06
Sector's share in World's exports
5,9 5,8 5,5 4,7 5,1 5,2 5,2 4,9
Source: Italian Institute for Foreign Trade, 2005 After a crisis in 1999, the index of production for the manufacture of food products, beverages and tobacco rose by 0.9 % in the EU-25.
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The Food and Beverage sector is fragmented and characterised by a bipolar structure.
On the one hand there is a relatively small group of multinational companies that lead the industry and operate globally, and on the other there are a large number of small and medium-sized firms producing for local markets.
Despite the fact that multinationals such as Barilla (IT), Danone (FR) and Unilever (NL) play a lead role in the international performance of the industry, over 80% of the companies in the European Food and Beverages sector are small and employ less than 50 employees. This is most evident in Italy and Spain, where the percentage of small companies is 87.7% and 81.5% respectively.
2. Industry e-business
2.1. Introduction. Diffusion and use of ICT in the industry As a general rule the adoption of Information and Communication Technology (ICT) by companies has grown considerably over the past few years, with more and more firms connecting to the Internet. Firms use ICT to automate internal office and production processes, for customer relations and supply chain management, or for the management of distribution and logistics networks. Internet usage may mean a simple website presence or the complete integration of business functions. However, the usage of ICT is less widespread in the Food and Beverage sector than in other industries.
While small firms find it difficult to fully utilise ICT, large technologically advanced multinational companies have, and the result has been the creation of big industrial groups operating interconnected networks. The main factors that motivate companies in the food sector to use ICT solutions include greater efficiency in internal processes (productive, administrative, delivery of orders, etc.) and integration of internal processes with external organisations to improve logistics and reduce costs.
According to a survey by eBusiness Watch in March 2003, computers were used by 82% of companies who in turn provided 90% of employment. The most widely used network applications were the Internet (70%) and e-mail (55%). LAN networks (25%), Intranets (13%), EDI systems (8%), WAN networks (6%) and Extranets (3%) were used less often.
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Source: e-Business W@tch (2003)
The percentages rose for larger companies and dropped significantly in the case of smaller ones.
Food, beverages and tobacco: Availability of IT infrastructure (2003)
2.2. Statistical usage estimates for e-commerce tools and new technologies Until recently, companies in the Food and Beverages industry have used e-business mainly to improve their internal processes and procedures, but the growing complexity of the sector is pushing companies to adopt more effective solutions as they face new strategic challenges. Large companies use e-business solutions mainly to integrate their supply chains and improve relationships with partners in the retail and distribution network. By using e-procurement solutions, companies are driving down costs, improving logistics and gaining a competitive advantage in the sector.
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ed a sample of companies regarding their use of e-
tivity in the Food and Beverages sector is
rarely participate in e-commerce
t neatly
gards to the reliability of their
In
verage e-marketplaces in the e-market Services
Food and Beverages industry require a registration to join their platforms.
In 2003 e-Business W@tch interviewbusiness solutions. On the basis of the results online selling is less prevalent than e-procurement. Though in a number of countries (including France, Italy, Spain), more companies are enjoying online export sales for niche and specialty products.
Source: e-Business W@tch (2003)
2.3. Prospects and challenges of e-commerce tools adoption and usage within the industry Compared with other industries, e-business acquite low, except for the large international companies.
On the whole, the majority of companies from the sectorand B2B electronic marketplaces. The main factor restricting the development of e-commerce in the sector is a cultural one. 'Traditional' purchasing behaviours don’t fiinto e-procurement models as the need for personal interaction with suppliers is still strong. In addition, the number of suppliers who actually sell online is still limited due to the fact that not every product in this sector is suitable for online selling.
There is also a significant lack of trust between users with re‘partners’ and the security of transactions. For this reason, some e-marketplaces have developed a code of conduct with the intent of building confidence in online exchanges.other instances companies push their smaller suppliers and trading partners to use technology (don’t give them a choice) essentially driving SMEs to adopt e-business solutions.
3. Industry e-marketplaces Currently there are 51 active Food and Bedirectory (June 2005).
All the e-markets in the
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The majority of e-markets are located in Europe (52%), North and Central America (35%) the largest number of
stribution of e-marketplaces
3.1. Geographic distribution and focus
and Far and Middle East (13%). The USA is the country withheadquarters.
Geographical di
Headquarters N°
USA 15
Spain 7
Italy 6
France 5
Belgium 3
China 3
Denmark 2
Canada 2
Geographic Focus
The geographic focus of Food and Beverages e-marketplaces (in other words geographical reas where are located their buyers and sellers) is mainly worldwide (28%). In addition to eir global scope , many e-markets also focus on a particular country (23%).
ath
27
7
18
Europe Far and Middle East North and Central America
15
76
5
33 2 2 Usa
SpainItalyFranceBelgiumChinaDenmarkCanada
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roduct and client profiles ome e-markets specialize in a sub-sectors like fish and seafood, wine and spirits or dairy
ge of food and beverage asta, bakery products and beverages. A small
e-marketplaces from the e-market Services directory are listed ame of the e-market, headquarters
PSproducts. Others are more horizontal and trade in a wide ranproducts such as olive oil, meat , cheese, pnumber of e-markets concentrate on one product only such as sugar, eggs, and tomatoes.
The participants in Food and Beverages industry e-marketplaces are producers, wholesalers, retailers and distributors of food and beverages products. Among sellers thereare farmers, bakers, dairy farms, fishing companies and wineries. Buyers include hotels, restaurants and cafès.
3.3. Industry e-marketplace directory The Food and Beveragesbelow in alphabetical order. Information is presented on nlocation, URL and available languages.
Name Country HQ URL Languages available
Agrelma Italy www.agrelma.com English, French, German, Italian, Portuguese, Spanish
Agribuys USA www.agribuys.com English
Albaris Italy www.albaris.it Italian
Bakery Online USA www.bakeryonline.com English
BevAccess USA www.bevaccess.com English
Beverage Online USA www.beverageonline.com English
BrandXchanges.com Belgium www.brandxchanges.com English
Bravofood Italy www.bravofood.it English, French, German, Italian, Spanish
ChinaFeedOnline China www.chinafeedonline.com Chinese, English
CPGmarket.com Switzerland www.cpgmarket.com English, French, German
Dairy Network.com USA www.dairynetwork.com English
dairy.com USA www.dairy.com English
ecMarkets USA www.ecmarkets.com English
eFoods USA www.efoods.com English
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Enonet.it Italy www.enonet.it English, French, German, Italian, Russian, Spanish
EquipNet Direct USA www.equipnetdirect.com English
eSugarIndia Lmtd. India www.esugarindia.com English
Ex-trade Denmark www.ex-trade.com Danish,Dutch,English, French,German,Polish,Spanish
FishRound Korea www.fishround.com English, Japanese, Korean
Fishtel Italy www.fishtel.it Italian, Spanish
Food and Beverage Network
Canada www.foodandbeverage-network.com
English
Food Market Exchange Thailand www.FoodMarketExchange.com
English, Thai
FoodChina.com China www.foodchina.com Chinese, English, Japanese
FoodExnet Turkey www.foodexnet.com Arabic, Chinese, English, French, German, Italian Japanese, Korean, Portuguese, Russian, Spanish, Turkish
FoodIT Denmark www.foodit.net English
FoodOnline USA www.foodonline.com English
FoodPacific China www.foodpacific.com Chinese, English
Foodservice Central.com
USA www.foodservicecentral. com
English
Foodtrader USA www.foodtrader.com English
FrenchFoods France www.frenchfoods.com English, French
Global Wine & Spirits Canada www.globalwinespirits.com English, French, German, Italian, Spanish
Greekproducts.com Greece www.greekproducts.com English
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Greentrade France www.greentrade.net English, French, Spanish
Horeca-net.com Spain www.horeca-net.com Spanish
Il-vino Italy www.il-vino.com English,French,German,Italian,Spanish
JCommerceRetail.com Belgium www.jcommerceretail.com Dutch, English
Meat and Poultry Online
USA www.meatandpoultryonline.com
English
mundocatering Spain www.mundocatering.com Spanish
PEFA.com - Pan European Fish Auctions
Belgium www.pefa.com Danish, Dutch, English, French, German, Italian, Spanish
Pesca2.com Spain www.pesca2.com English, Spanish
Pescastocks.com Spain www.pescastocks.com English, Spanish
Pro-Wine France www.pro-wine.com English, French, Italian, Spanish
Quiminet Mexico www.quiminet.com English, Spanish
Seafood.com USA www.seafood.com English
soloalimentacion Spain www.soloalimentacion.com Spanish
SoloVending Spain www.solovending.com Spanish
Tomatoland France www.tomatoland.com English
Transora USA www.transora.com English
Uvine UK www.uvine.com English
verticalwine France www.verticalwine.com French
World Fish Site Spain www.fis.com English, Japanese, Spanish
ZDI Online Marktplatz Germany www.zdi.de German
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ficant e kets Food and B e-m ices as
TRANSORA
transora.com
3.4. Signi -mar in the industry To follow aresignificant.
everage arkets that are classified by e-market Serv
www. large multi com rs of Transora. These
a-Cola, Mars Procperatin ngua as interoperabilitys CPGm d GlobalNetXchange (GNX). Transo
GS1 Member Organizations, manufacturers, and retailers of all sizes. The e-market was ic s il, Mexico, France, nited
Kingdom. On May 13th 2005, Transora and UCCnet agreed to form a single organization to more effectively service companies seeking to realize the value of data and information.
A
www.agrelma.com
More than 50include Unilever, Kraft, Pe
national psi, Coc
panies are owners and use, Kelloggs, Danone, ter & Gamble, and
Bush Brothers. Owith the e-market
g in 7 laarket an
ges, Transora h projects underway ra customers include
launched in 2000 in Ch ago and ha offices in Braz and the U
AGRELM
n DG XIII and now has over ducts but also agricultural
ry services to their customers. In 2004 and 2005 Agrelma and the Italian Institute for Foreign Trade (ICE) worked together to promote olive oil producers from the
Italy on the e-marketplace.
Agrelma was established in 1999 by the European Commissio3500 registered users. The Agrelma site not only lists food promachinery and equipment. Agrelma provides logistic support and ratings of suppliers as a supplementa
various regions of
GLOBAL WINE AND SPIRITS
www.globalwinespirits.com Global Wine and Spirits, based in Canada, is one of the largest e-marketplaces for wine anspirits in the world. Created in 2000, the site counts hundreds of daily visitors and most of them have regular transactions. GWS has been Webtrust certified. In 2003 Global Wine aSpirits and the Italian Institute for Foreign Trade (ICE) signed a partnership agreement promote 100 wine producers from the various regions of Italy on the e-marketplace.
d
nd to
DAIRY.COM
www.dairy.com .com is a leading platform for the Dairy industry.
www.tomatoland.com
Created in 2000, DairyRepresenting over 80% of annual USA dairy sales, their member companies include industry leaders Dairy Farmers of America, the Dannon Company, Dean Foods, Dreyer's Grand Ice Cream, Kraft Foods, Land O'Lakes, Leprino Foods and Schreiber Foods.
TOMATOLAND
designed by industry leaders in Europe, Asia
and the USA. With more than 1000 active members from 75 countries, it covers ‘everything tomato products. The e-market is aimed at tomato growers
This B2B information and exchange site was
tomato’ from seeds to processedand processors, their suppliers and their retail and industrial customers.
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The European e-Business Market Watch (www.ebusiness-watch.org
4.Sources and References ). “E-Business
ges industry” Trade (www.ice.gov.it
in the Food and Bevera Italian Institute for Foreign )
d "European t
Eurostat, " Quarterly Panorama of European Business Statistics" anBusiness-facts and figueres 1998-2002" (www.europa.eu.int/comm/eurosta )
Confederation of EU Food and Drink Industry (www.ciaa.be) UNCTAD, "E-commerce and Development Report 2004" e-market Services. Directory of electronic marketplaces
services.com(www.e-market )
