Peru’s Market Share Decline and Jiahe Food Europe GmbH’s Strategic Adjustments
Peru has lost approximately 80% of its market share in the European ginger market this year due to decreased demand and quality issues. Jiahe Food Europe GmbH faces procurement challenges and is focusing on young ginger from China and organic sweet potatoes from Portugal. Despite difficulties, the company has seen growth across all product areas and acquired new customers.
This year, Peru has experienced a significant decline, losing approximately 80 percent of its market share in Europe. The decline is primarily attributed to a drop in demand for ginger, which typically sees stable sales shortly after Carnival. However, increasing warm weather may reduce demand, according to Ralf Settels, managing director of Jiahe Food Europe GmbH. Meanwhile, the procurement process faces challenges due to quality issues associated with early harvesting in China and delays at seaports, yielding a transit time of about 60 days.
Currently, the ginger supplied from China is known as young ginger, described as delicate due to its skin being harvested off. Settels notes that the pricing for the new crop was originally low, but adjustments were necessary due to lower-than-expected yields and processing costs, leading to more stable prices recently. Gutting for the ginger from Peru is nearing its end due to decreased quality and demand,
resulting in substantial market share losses as customers turn to larger Chinese tubers.
The outlook for alternative sourcing countries is limited, as Thai ginger does not meet European quality standards, and Brazilian supplies finish in December. Additionally, ginger from Nigeria and Ghana is smaller, while South Africa primarily cultivates for local consumption. Settels has explored Indian suppliers but has found no reliable partners yet. Despite these issues, European consumption rates of ginger and turmeric remain high, showing positive growth since the pandemic.
In addition to ginger and turmeric, Jiahe Food Europe GmbH focuses on distributing organic sweet potatoes, primarily from Portugal after discontinuing ties with Israel and Spain. Settels indicates that Portuguese products are expected to last until late May, followed by South African produce until the next harvest in August. The price of sweet potatoes is rising due to lower availability from the U.S., with additional increases noted as of March.
Overall, Jiahe Food Europe GmbH has reported positive sales growth across all product categories, successfully acquiring new clients in both industrial and fresh food markets. Such results reflect the company’s strategic adaptation in a challenging market environment.
In conclusion, Peru’s market share for ginger in Europe has dramatically declined amid fluctuating demand, primarily due to quality issues and competition from Chinese products. Additionally, the ginger supply chain faces substantial challenges. However, Jiahe Food Europe GmbH has successfully diversified their imports, particularly with sweet potatoes, and maintained stable growth in customer acquisition despite market difficulties. This evolving landscape highlights the importance of adaptive strategies in food distribution businesses.
Original Source: www.freshplaza.com
