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Prospects in European market for culinary herbs.

According to a new ITC market study, some possibilities exist for exporters of herbs in developing countries to increase their sales to Europe. Imports of dried herbs into four of Europe's largest markets total approximately 12,000 tons to 13,000 tons annually. Although traditional suppliers hold a strong position in this trade, exporters who can offer herbs of consistently high quality that have properties distinguishing them from those of their competitors in terms of flavour, colour and essential oil content should be able to obtain a firm foothold and possibly even command higher prices than current sources of supply.

Imports

Imports of dried herbs into the four markets reviewed (France, Germany, the Netherlands and the United Kingdom) are estimated to average almost 12,600 tons yearly, of which 37% goes to France; 30% to Germany; 21% to the United Kingdom; and 12% to the Netherlands (see table on page 9). (Official trade statistics do not show figures for imports of most specific types of herbs, and these figures are trade estimates only.) In addition, considerable volumes of dried herbs are transshipped through Hamburg and Rotterdam to other countries.

Over 77% of the imports of herbs into the four markets are of six types: sage, oregano, marjoram, mint, thyme and rosemary. Domestic production in these four countries consists mainly of parsley, sage, mint, thyme, dill, savory and tarragon, which covers demand for these herbs in fresh form and part of the requirements for the dried form.

According to trade estimates, overall demand for herbs in these markets is increasing by 1% to 2% annually in volume. Growth rates differ for the various types. Sales are expected to go up much faster in the industrial food and institutional catering sectors than in the retail trade. Demand for marjoram, oregano, sage, thyme and bay leaves is likely to grow faster than that for other herbs.

Outlook

Several factors are expected to stimulate import demand in Europe for dried herbs. Interest is growing in general in the cuisine of other regions of the world, which often calls for specific herb-and-spice mixtures. Furthermore, herbs are increasingly used in industrial food manufacture as natural preservatives and anti-oxidants (for instance, oregano and rosemary are used extensively as anti-oxidants in sausages and other meat products). In addition, the rising demand in Europe for foods low in sugar and salt has stimulated the development of herb mixes and spiced herb preparations as alternatives. The move away from artificial flavourings and colourings in food has also benefited herb sales. Still another factor is the boom in fast foods and microwave cooking, which has led to the use of more aromatic herbs to improve palatability.

Forms traded

Culinary herbs, both wild and cultivated, are exported primarily in dried form, as "crude," "unmanufactured" or "not ground," which means that they have been cleaned but not further processed. Processing beyond the drying stage is usually undertaken in the consuming country. This involves grinding, chopping or crushing, or further cleaning and packaging of whole leaves, stems or flower-heads. International trade in dehydrated herbs is rising. Although large quantities of herbs are traded in the fresh form within the producing countries, international trade in fresh herbs is limited and offers little prospect for new supplying countries.

Frozen herbs have developed a market as replacements for the dried form and as a complement to fresh herbs. Although demand is still low, sales of the frozen product are growing rapidly in France and also expanding in several other European markets.

Herb oleoresins are preferred to dried herbs by some food-manufacturing companies in the countries reviewed, particularly in the baking and processed meat industries. With the exception of those from sage and celery seed, however, herb oleoresins are not widely used.

Principal end-uses

The herbs covered by the study are marketed mainly as seasonings, flavourings and garnishing for food. They are used individually, as mixtures or in manufactured preparations such as seasonings (for instance barbecue seasoning), stuffing mixes (for example herbs and breadcrumbs), blends for use in microwave cooking, dips, herbs formulated for dietetic purposes (for instance to reduce salt intake) and innovative seasonings (such as herb pepper and dill pepper).

Demand for culinary herbs comes from three sectors:

* Food manufacturing, the meat industry in particular. This sector has increased its use of herbs.

* The institutional, or food service, sector. The rapid growth of this sector has contributed to the rise in consumption of fresh and dried herbs, seasonings and stuffings.

* The retail or household sector, which is the largest outlet for dried herbs. Demand in this sector is however more or less stagnant.

The relative shares of these sectors vary widely from country to country, as do the range and form of the herbs purchased.

Spice traders and packers estimate that end-use patterns for culinary herbs are the following in the countries surveyed: in France, 55% of total sales is accounted for by the retail trade, 25% by the food industry and 20% by institutional caterers; in Germany the comparable shares are 50%, 30% and 20%; in the Netherlands, 35%, 55% and 10%; and in the United Kingdom, 40%, 40% and 20%. Other applications:

Herbs are also widely used for their medicinal properties. The pharmaceutical industry purchases large quantities, and dried herbs are the basis for certain teas and other nonprescription preparations.

Herbs such as rosemary and mint are ingredients in perfumes and cosmetics. Some culinary herbs are likewise used in small quantities for other purposes, such as decoration, fabric dyeing and cleaning, insecticides, and masking agents for certain food and pharmaceutical products with undesirable odours and flavours.

Uses by type

The ITC survey covers the 12 best known and most widely traded herbs used mainly for culinary purposes: parsley, mint, sage, thyme, bay, marjoram, rosemary, basil, oregano, dill, savory and tarragon. Basil:

The two main varieties of basil traded are sweet or common basil and bush basil. Because of its larger leaves and richer fragrance, sweet basil is commonly used as a culinary herb, while bush basil is employed mainly for decorative purposes and as an insect repellent. Basil is used extensively in French, Greek and Italian cooking. it is also an ingredient in prepared meats, baked goods, sauces, vinegar and liqueurs (chartreuse in particular). Other applications are in medicinal preparations, in essential oils for compound fragrances and as a flavour modifier. Bay (laurel) leaves:

The leaves of the bay tree are used to flavour a wide range of homecooked dishes and also various types of commercially canned and preserved vegetables, meat and fish. Bay berries are pressed or distilled to give a thick greenish oil used in some liqueurs. Dill:

Two species of dill (which is a member of the parsley family) are traded internationally, the European and Indian varieties. The leaves of European dill and the fruit (seed) of indian dill are used mainly as a food flavouring. The flavours of dill seed and dill weed (the leaves) differ substantially from each other, so they are not used interchangeably. Dill seed and oils and, to a much more limited extent, oleoresins have many commercial applications in compound seasonings and flavourings for food products. They are also used in the perfume and soap industries. Dill seed oil is sold as a medicinal preparation. Marjoram:

Marjoram is a perennial herb of the mint family used widely in European cooking. The dried herb faces competition from the oleoresin in the production of some prepared meats and cheese. The essential oil is an ingredient in compound oils for flavouring sauces, canned meats and other food products. Both the dried herb and a tincture go into the manufacture of vermouth and bitters. Marjoram likewise has medicinal uses. Mint:

Peppermint and spearmint are cultivated commercially. Mint is probably the world's most important flavour after vanilla and citrus. The essential oils extracted from the plant meet a large part of world demand for mint flavouring. Mint leaves, however, remain among the world's leading herbs.

Mint leaves have both flavouring and medicinal applications. Spearmint is the variety in highest demand for culinary purposes. Peppermint is used mainly for medicinal applications. Mint tea is prepared from peppermint, the most extensively consumed of the herbal teas. Mint also goes into other beverages, including liqueurs (such as creme de menthe and chartreuse).

Mint oils and menthol are aromatic agents in toothpaste, mouthwashes and chewing gums. No mint oleoresin is commercially available. Oregano:

Oregano is particularly important in Italian and other European cooking. The herb is also used by industrial food processors as an anti-oxidant to curb rancidity in foods with high fat content, such as sausages.

The dried herb, tincture and essential oil have applications in food flavourings and certain liqueur formulations. Parsley:

Parsley is one of the best known and most extensively marketed cooking herbs. Although it is sold mainly as a fresh herb, it is also widely available in dehydrated and, more recently, frozen forms. The top part of the plant is used as a flavour and a garnish in cooking, while the stems in dried and powdered form serve as a food colour and a dye.

Three essential oils are produced, from the seed, the leaf and the whole plant. An oleoresin is also obtained from the seeds. The essential oils and oleoresin are used to flavour canned and cured meats and as condiments for compound aromas. Infusions of parsley leaves and roots have pharmaceutical applications. Rosemary:

Rosemary is a versatile herb used in cooked dishes. Because of its antioxidant properties it also goes into the manufacture of meat-based products.

The essential oil of the leaves is an ingredient in cosmetics, perfumes and insect repellents. Sage:

Dried sage prepared from the leaves has applications primarily in home cooking and in commercial meat processing and packing. It goes into herbal teas and medicinal preparations. Sage oils are used to flavour liqueurs, bitters, condiments and cured meats, and are an ingredient in perfumery formulations. Sage oleoresin, probably the second leading herb oleoresin after celery seed, is a substitute for the dry herb as a flavouring agent in industrial meat processing. Savory:

Only two species of savory are generally commercialized. The herb is used as a flavouring for home cooking in northern Europe in particular. The dried form and the tincture are also ingredients in vermouths and bitters. Very small quantities of the essential oil serve as a flavouring in the food industry and as a perfume ingredient. Tarragon:

The fragrant leaves of tarragon are used, fresh or dried, as a gourmet herb in France and as a popular herb in other European countries. It is an ingredient in commercial preparations including vinegar, mustard, liqueurs and perfumes.

The essential oil of tarragon goes into similar commercial products. Thyme:

Thyme is a common kitchen herb. The type traded internationally is derived mainly from the flowering tops of garden thyme and white thyme. Thyme has a wide range of culinary, medicinal and decorative uses. The essential oil goes primarily into medicinal and germicidal products. It likewise has applications in perfumes, bath preparations and other toiletries, as well as in food flavourings. The meat industry uses small quantities of thyme oleoresin as a flavouring.

Trade channels

Herbs and spices generally have the same trade structure and distribution channels. Very few dealers and brokers handle herbs exclusively. Direct trade between medium-size and large producers and exporters in developing countries and grinders and processors in consuming markets is rising.

Large processors continue to use the services of specialized traders to obtain small consignments of herbs or additional requirements at short notice and at competitive prices.

The number of brokers and dealers in herbs and spices in Western Europe has declined over the last two decades. Structural changes, partly as a result of increased direct trading, are blurring the functional distinctions between the specialized categories of traders (agents and brokers) and of importers and dealers. Dealers and importers usually act as intermediaries between exporters in producing countries, on the one hand, and spice grinders and processors in the consuming markets, on the other. In several countries brokers and agents act as intermediaries between exporters and importers or dealers, and between importers or dealers and grinders or processors. Large importers usually undertake cleansing and grinding. The largest food chains, however, carry out their own importing, grinding and packaging.

The figure on page 6 gives an overview of the trade structure and distribution channels for herbs in Western Europe. The solid lines indicate the marketing channels most often used by exporters in developing countries.

The leading brokers and importers or dealers are established in the major trading centres of the main importing countries: Amsterdam, Hamburg, London, Marseille and Rotterdam.

The herb trade is highly dependent on mutual trust and confidence between the supplier and the processor. The major herb grinders and processors, as well as the large trading companies, establish close relationships with their main suppliers through visits and provide technical assistance in such matters as production and harvesting.

Processing at the source

Producers and exporters in developing countries could add value to their products and increase their returns by processing the herbs locally. Certain factors should, however, first be considered. The initial outlay on equipment and technology may be sizable, and packaging materials, solvents and fuel may have to be imported. Keeping informed of the requirements in distant export markets and of individual end-users in them, and meeting those requirements, may pose problems for exporters in developing countries -- for instance, in Europe herbs and herb mixes cater to regional tastes. Furthermore, phytosanitary regulations are more stringent for processed herbs than for the unprocessed form. Several European importers hesitate to buy processed herbs because, if contaminated, these products are more difficult and more costly to clean than whole leaves. In addition, traditional herb processors are reluctant to handle imported ground herbs, especially retail packs, that compete with their own basic business of grinding and packing.

At the same time, however, the high cost of grinding herbs in Europe has led to an increase in the proportion of imports in ground form. For example, although small in actual tonnages, the share of imports of crushed and ground thyme in total thyme imports into the United Kingdom rose rapidly between 1985 and 1989, from 2% to 27%.

Demand is also expanding in Europe for herb and spice mixtures prepared in the supplying countries. These are usually sold through specialist outlets dealing in exotic foods and in shops serving ethnic communities.

A small company seeking entry into the European market should contact a European agent or importer rather than a processor. Agents and importers usually have considerable knowledge of market requirements and should be able to inform exporters of the precise needs of individual companies concerning price, quality, quantities and packaging. Medium-size and large export firms could contact grinders and processors, as direct trade may be possible.

As far as the European retail sector is concerned, it is almost impossible for herb exporters in developing countries to gain entry with their own brands, without setting up an extensive distribution network and making large capital outlays. The alternative is to manufacture on a contractual basis for established retail packers in Europe. This can be done if the supplier's quality standards are high enough to protect the brand name.

Trade practices

New suppliers are requested to provide trade references before being given an order. Most of the trade is concluded on the basis of samples (usually of 20 gr to 100 gr).

The major importing countries have developed standard contract forms. The contracts specify quality, price, shipment conditions, arbitration and payment terms. Arbitration proceedings may be initiated if shipments fail to meet the standards of the sample. (For example, if the sample was harvested before the plant had matured, or drying was inadequate.) Disputes are most often settled amicably, but they generally harm a supplier's reputation.

Most traders prefer to receive CIF or C&F port of destination quotations in the major trading currencies. New producers and exporters are usually paid only after receipt and acceptance of the shipment, while established suppliers tend to be paid cash against documents.

Quality requirements

Quality considerations are of primary importance in the trade of herbs. Cleanliness, flavour, colour and aroma are the most important factors considered by importers and buyers, but no standardized grading system is used. Quality criteria vary from one country to another and from herb to herb and are usually imposed by the large importing and processing companies. Requirements concerning cleanliness and admitted levels of pesticides and herbicides are becoming more strict.

Standards have been issued by the International Organization for Standardization (ISO) only for dried spearmint, peppermint, laurel leaves, whole thyme and dried oregano leaves. Major buyers usually draw up their own quality specifications.

Most purchases are made on the basis of an analysis of the samples supplied by the exporter in a laboratory selected by the buyer.

The standards institutions in the countries reviewed are currently working with industry representatives to draw up national standards for herbs. A proposed European Community (EC) directive might prohibit the current practice of fumigating and cleaning herbs with ethylene oxide gas before further processing. Another proposed EC directive would allow a number of food items, including herbs and spices, to be irradiated in member countries. Leading herb processors and packers are of the opinion, however, that consumers would be hostile to irradiated herbs.

Selected major markets

Four principal import markets were covered in the ITC study: France, Germany, the Netherlands and the United Kingdom.

Prospects for exporting culinary herbs to these markets are discussed below. France:

France is the largest European market for these herbs and is also a major exporter. According to trade estimates, overall French demand for dry culinary herbs, both domestically produced and imported, amounts to between 5,780 tons and 6,880 tons annually, with approximately three-fourths supplied by imports.

Among the range of herbs in demand, all or a large part of the mint, thyme, oregano, basil, rosemary, bay leaves, sage, marjoram, savory and dill purchased is imported.

The main suppliers to this market are Morocco, Turkey, Egypt, Chile and some east European countries. Mint is imported primarily from North African countries; thyme from several countries around the Mediterranean basin; parsley mainly from Israel; tarragon from a number of countries including several in northern and eastern Europe; marjoram from Egypt in particular; sage mainly from Turkey; oregano primarily from Albania, Turkey, Chile and Morocco; rosemary from Mediterranean basin suppliers; basil from Albania and Egypt; bay leaves mainly from Turkey; savory from Albania, Yugoslavia and Hungary; chervil and chives from northern European countries; and dill primarily from Egypt.

The two leading end-users and retail distributors of herbs in France purchase a major part of their requirements direct from foreign suppliers. A limited number of brokers and traders handle the import and export trade. Germany:

Germany is the second largest consumer of culinary herbs in Europe after France. The market is currently estimated at 5,320 tons of herbs, of which 71% is supplied by imports and 29% by local production.

German importers and herb processors have long-established links with exporters of herbs in east European countries, Hungary and Poland in particular. Morocco is also a supplier.

The main foreign suppliers by type of herb are the following: parsley, Hungary; sage, Albania, Greece and Turkey; oregano, Turkey; thyme, Spain, Morocco and Poland; marjoram, Egypt; rosemary, Spain; mint, Morocco; bay leaves, Turkey; basil, Egypt; dill, France and Hungary; savory, Hungary; and tarragon, France. Netherlands:

Although by itself a small consumer of herbs and spices in comparison with its neighbours, the Netherlands is an important intermediary in the European trade for these products.

Rotterdam has developed into the world's largest transshipment port for spices and herbs. Its re-export trade in these items reaches 15,000 tons yearly.

With the exception of parsley and dill, which are supplied partially by domestic growers and driers, demand for dried herbs is met by imports. According to trade sources, current imports of dried herbs amount to about 1,550 tons annually.

The sources for these items are: parsley, from Germany, France, Hungary and Israel; marjoram, from Egypt, Israel, France and Chile; oregano, from Chile, Turkey and Greece; thyme, from Spain, France, Germany and Morocco; rosemary, Spain; basil, Chile and Egypt; bay leaves, Turkey, Egypt and Israel; mint, Morroco; savory, Germany and Spain; dill, Germany, France and Morocco; and tarragon, France and Hungary. United Kingdom:

The use of herbs in the United Kingdom for culinary and medicinal purposes has increased steadily since the 1970s. According to trade estimates, the current size of the U.K. market for herbs amounts to about 4,000 tons annually. Around 65% is supplied by imports.

The herbs in highest demand are parsley (accounting for 25% of the herb market, with about 90% supplied domestically); sage (17% and 25% respectively); mint (16% and 39%); and oregano (13%, supplied almost entirely by imports).

About 40% of the herbs sold on the market (an estimated 1,500 to 1,600 tons) are used by food manufacturers. Another 40% goes through the retail trade, and the rest to the food catering sector.

Only about 10% of the demand for parsley is supplied by imports, mainly from Germany and the Netherlands. Three-fourths of the supplies of sage come from imports (from Turkey, Greece, Albania, Italy, Yugoslavia and Israel). Over 60% of the mint on the market is imported (from Egypt and Morocco). Oregano is supplied by Chile, Portugal and Turkey, among foreign sources. Egypt is the main supplier of marjoram and basil, while Spain is the leading source of thyme and rosemary, and Turkey of bay leaves. European countries sell dill, tarragon and savory to this market.

Michaela Maftei is an ITC Market Development Officer. This article is based on a recent ITC study that she wrote, Dry Culinary Herbs: An Overview of Selected Western European Markets.
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Author:Maftei, Michaela
Publication:International Trade Forum
Date:Jan 1, 1992
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