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Spanish frozen food growth tops in EEC, but cold store occupancy falls to 70-75%.

Spanish Frozen Food Growth Tops in EEC, But Cold Store Occupancy Falls to 70-75%

Since entering the Common Market in 1986, Spain has experienced more than a 100% increase in the consumption of frozen foods. Per capita intake is now about 12 kgs. Although starting from a low base, this is the largest advance in Europe. But it is still well below the average European consumption figure of 20 kgs per capita.

With a population of 39 million, Spain consumes an estimated 460,000 tons of frozen products annually. The majority of these are in bulk form, consisting of the following groups: frozen fish, 54%; frozen vegetables, 27%; frozen meat, 9%; precooked and prepared dishes, 5%; processed fish, 4%.

In addition, Spaniards annually eat some 146.8 million liters of ice cream, which amounts to 3.2 liters per person. Again, this is one of the lowest consumption rates in Europe, as only in Greece and Portugal does the public eat less ice cream.

Frozen food consumption is likely to continue growing 12-15% a year since the Spanish market is still in a developmental phase. Major influences include the greater introduction of value-added products, changing socio-economic conditions (more working women, increased catering, growing sales of freezers and microwave ovens, etc.) and the massive influx of foreign capital into the food and distribution (point of sale areas) sectors. All of these are contributing to an increase in the supply and variety of frozen products.

The foregoing are having a marked effect upon the Spanish cold storage industry, which in large part is fragmented and regional in distribution, transportation and warehousing -- and is developing in certain respects in line with the French experience. This is based on influences of major hypermarket chains on distribution channels, and by imports and sales of frozen products with a higher degree of stock rotation.

Spain's present refrigerated warehouse volume exceeds 9.0 million [M.sup.3] (318 million cu. ft.) concentrated in Cataluna (26%), Valencia (15%), Andalucia (12%), Galicia (8%) and Madrid (7%), among the 17 autonomous regions.

In terms of temperature, the total capacity consists of:

* Above 0 [degree] C (32 [degrees] F), 4.1 million [M.sup.3] (144.9 MM cu. ft.)

* Between 0 [degree] C to -- 18 [degrees] C (32 [degrees] to 0 [degree] F), 2.6 million [M.sup.3] (91.8 MM cu. ft.)

* Below -- 18 [degrees] C (0 [degree] F), 2.3 million [M.sup.3] (81.2 MM cu. ft)

It must be noted that almost all of the 4.1 million [M.sup.3] space maintained at 0 [degree] C is dedicated to fruit and vegetable storage at controlled atmosphere temperatures. Also, of the above capacities, 40% are public cold stores, totalling some 3.6 million [M.sup.3] (127 million cu. ft.).

In Spain, public cold stores are associated with ANEFE (Asociacion Nacional de Explotaciones Frigorificas de Espana), which is made up of 125 company members commanding 2.4 million [M.sup.3] (84.8 million cu. ft.) in capacity volume, or about 70% of public refrigerated warehouses in Spain.

Through ANEFE, the Spanish cold storage sector is also represented in the European Association of Refrigerated Enterprises (AEEF), which includes EEC and EFTA member states.

In recent years, a number of improvements have been introduced, such as standardizing pallet sizes (with a 70% utilization of P.10 and 25% of P.8), installing racking systems and updating facilities in general.

While fundamental activities continue to be dominated by storage and conservation of perishable products and related duties, the trend is to offer new, higher value-added services including order preparation, stock management, customs documentation, computerized "on-time" information and intermodal systems, distribution and transportation.

Average occupation levels exceeded 95% in 1987 and '88, due largely to peak production of frozen and precooked foods and imports. As a result, 1.5 million [M.sup.3] (53 million cu. ft.) of additional capacity is under construction -- the majority of which will be utilized for accommodating fish and bulk frozen vegetables. As of now, the future is not particularly optimistic. Such is also the situation in other countries with excess cold storage space.

In the case of Spain, average cold storage occupation rates in 1989 declined to 70-75%. Other factors contributing to this downturn include:

* The total elimination of EEC surplus stocks and intervention purchases. Although meat and butter inventories peaked at only 44,000 tons in Spain, this is a fraction of that maintained in other EEC countries).

* A considerable increase in the output of agriculture processing industries, stimulated by Spanish and EEC subsidies, furthered construction of private in-house or factory-annexed coldstores. Inventories built up to the detriment of the public refrigerated warehouse sector, which did not have access to such financial assistance.

* A change in the production policy for some products that are consumed seasonally. High volume lines are increasingly turned out for rapid consumption, while lower volume ranges requiring prolonged stock maintenance are losing favor.

The Spanish public refrigerated warehouse industry is aware of its need to redefine strategies and policies. In addition to consolidating, operators are offering new and better services and incorporating controlled temperature transport and distribution into their strategies. In this manner, a more effective role in the cold chain will be assumed.

MANUEL CABRERA-KABANA is assistant general manager of Barcelona, Spain-headquartered Interfrisa Internacional Frigorifica, S.A. The group specializes in providing refrigerated warehousing, transportation and related services.
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Author:Cabrera-Kabana, Manuel
Publication:Quick Frozen Foods International
Date:Apr 1, 1990
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