Selling Food to the French, not so Crazy After All
Historically, the French palate has been happy to accept new tastes and good culinary innovations have easily been incorporated into ‘la cuisine francaise’. More pertinent for today’s markets, the French consumer is undergoing the same sociological and economic changes as elsewhere in Europe.
With more women in the workforce, more foreign travel, more health consciousness, French consumer trends are similar to those of Britain, Germany, etc., namely increased demand for good-quality convenience food, more variety and healthier foods. So if your business successfully sells food in Britain, there should be no reason why it would not sell as well in France. It is also a particularly good time to look at the French market as retail laws are being simplified. The ‘Loi Galland’ (a law which penalises loss leaders but also makes minimum price thresholds more opaque) could well be abolished by the end of 2004.
The French food industry is the country’s single largest economic sector, contributing €136Bn in 2003. France is the second largest food producer in the world, and the largest exporter of processed food. Meat accounts for a quarter of the value of the food produced, seconded by dairy products (14.6% in 2003) and beverages (14.1%). Food exports (21% of total food produced in 2003), are the largest consistent earner for French external trade. While overall the French food industry is growing at about 3% per annum, certain segments, like healthy snack foods and convenience foods are growing at double this rate and organic products are growing at near 20% a year.
Of interest to the smaller companies looking to export to France, the French food industry is dominated by small and medium-sized companies (SMEs). France has some 10,841 registered food companies of which 90% have below 250 employees and over a third have less than 20 employees. So while France counts several multi-national giants, notably Danone, the majority of the domestic competition is still made up of small companies.
The table below gives the market share of some of the largest hyper/supermarkets. The important factors to note are the dominance of the hyper/supermarkets who, combined, control about 75% of food retailing. Hard discounters account for 12.7% and have gained 300 basis points in market share over the last 3 years, according to TNS-Secodip.
Source: TNS Secodip June 2004
Market share (June 2003)
Market share (June 2004)
Change year on year in basis points
E. Leclerc
17.1%
17.7%
+60
Intermarché
11.7%
11.2%
-50
Système U
7.7%
8.1%
+40
Géant Casino
4.2%
4.2%
0
Carrefour
13.9%
13.3%
-60
Hard Discount
11.9%
12.7%
+80
Finally, Rungis should not be ignored: Rungis is the largest wholesale food market in the world, located just outside Paris and boasting over 600 wholesalers and 500 service companies (buyers, agents and importers).
Address: IBT Partners - 17 rue du Colisée - 75008 Paris - France
Historically, the French palate has been happy to accept new tastes and good culinary innovations have easily been incorporated into ‘la cuisine francaise’. More pertinent for today’s markets, the French consumer is undergoing the same sociological and economic changes as elsewhere in Europe.